Association of Professional Compliance Consultants

The body for compliance consultants who advise firms regulated in the UK.

The APCC is active in enhancing the professional standards of compliance consultants and is recognised as a trade body by the FCA and other regulators. This provides our members with significant benefits in terms of direct access to the Regulators as well as business leads.  The APCC often works in conjunction with the FCA to pilot or test new initiatives, and we also provide with valuable feedback on specific subjects as requested by them.

AIFMS and Fee Block A009

Members have raised the issue of AIFMs having to complete the A009 Fee Block for the first time. The tariff data for this is based upon annual income. A number of AIFMs who previously paid fees predominantly through the fee block A007 (which is based upon FUM) are having to provide data, in addition to the FUM data, on the income derived from risk management and the administration of AIFs. A significant number of AIFMs do not charge separately for risk management and administration services provided to AIFs.

The FCA’s advice to date is that AIFMs should provide an estimate of the proportion of firms’ annual charges that cover AIF risk management and administration costs.  Effectively the FCA is applying a double fee block approach to the single permission of managing an AIF. This would appear to potentially discriminate against investment management firms that manage AIFs over investment management firms that manage segregated accounts only. In the latter case although the firms may have permissions that would bring them into the A013 fee block they are permitted to leave out income derived from discretionary investment management activities. So effectively they only contribute fees based on their funds under management. Those managing AIFs will have to contribute to both fee blocks.

The issue is compounded by the fact that the tariff data for A009 is based upon an income metric and that for A007 is based upon a FUM metric. So Firms cannot calculate an effective income split between portfolio management and risk management/AIF administration.

We would like to seek greater clarity from the FCA on this issue so if you are encountering similar issues please let us know.