FCA fine asset managers for breaking competition rules

22 Feb 2019

FCA fines asset managers for breaking competition rules

UK’s markets watchdog, the Financial Conduct Authority (FCA) has found three asset management firms breaching competition law by swapping information ahead of a share listing.

Hargreave Hale Ltd, Newton Investment Management Limited and River and Mercantile Asset Management LLP (RAMAM) are the three companies who have been found by the FCA as having breached competition law.

In a statement made by the FCA, they said:

“The infringements consisted of the sharing of strategic information, on a bilateral basis, between competing asset management firms during one initial public offering and one placing, shortly before the share prices were set.

“The firms disclosed and/or accepted otherwise confidential bidding intentions, in the form of the price they were willing to pay and sometimes the volume they wished to acquire.”

This resulted in one firm knowing the plans of the other firm during the Initial Public Offering or placing process, when they should have been competing for shares instead.

Currently, only two of them have been fined in the first such use of the regulator’s competition powers. Hargreave Hale Ltd has received a £306,300 fine, whereas RAMAM has been fined £108,600.

Under the competition leniency programme, Newton Investment Management Limited has not been fined yet.

Christopher Woolard, director of strategy and competition at the FCA, said:

“Asset management firms must take care to avoid undermining how prices are properly set for shares in both IPOs and placings. Failure to do so risks them acting illegally.”

Earlier this year, a former fund manager at Newton, Paul Stephany was fined £30,000 for attempting to influence competitors during share sales, which the FCA has investigated and commented that it related to “some of the facts” being looked at under competition rules.


By Lyba Nasir