FCA imposes first fines on anti-competitive behavior


FCA warning

The UK’s Financial Conduct Authority (FCA) today made a decision using its powers to enforce competition laws by ruling that three asset management companies violated competition law.

The ruling as made against the following firms:

  • River and Mercantile Asset Management LLP (RAMAM)
  • Newton Investment Management Limited
  • Hargreave Hale Ltd

The FCA imposed a £306,300 fine on Hargreave Hale, and a £108,600 fine on RAMAM, while Newton was not fined due to the competition leniency initiative, which allowed the FCA to grant it immunity.

The firms’ major transgression was the sharing of proprietary information in a reciprocal manner between investment management firms that compete against each other, which is not allowed by law. This occurred during a placement and an IPO where the firms shared confidential information regarding the prices they were willing to pay and the number of shares they wanted to purchase before the IPO stock prices were determined.

This compromised the bidding process at the IPO as well as the process of arriving at the IPO share price.

Christopher Woolard FCA
Christopher Woolard, FCA

The FCA’s Executive Director of Strategy and Competition, Christopher Woolard, stated that:

This is our first case using our competition law powers and demonstrates our commitment to taking enforcement action to protect competition. 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. The FCA will act when markets that play a vital role in helping companies raise capital in the UK’s financial markets are put at risk. We can also take regulatory action against an individual and did so here with respect to some of the same facts.

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FCA imposes first fines on anti-competitive behavior

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