JEROME LUSSAN, CEO OF LAVEN PARTNERS, INTERVIEWED IN ADI NOVEMBER 2013 ISSUE, COMMENTS ON THE CITY OF LONDON LAW SOCIETY LETTER TO THE FCA ON 22 JANUARY DEADLINE
The CLLS’s letter to the FCA is ‘hurtful for our industry’ – Published in ADI November 2013 edition .
“The CLLS, which represents 15,000 City lawyers, challenged the FCA’s view that the UK’s alternative fund managers will either need to be authorised by July 22, 2014 or cease business until this occurs. It accused the FCA of misinterpreting the required implementation of the AIFM Directive writing that, “In our view Article 61(1) of the AIFMD clearly states that AIFMs performing activities under the AIFMD shall ‘submit an application for authorisation’ within one year of July 22 2013. This appears unambiguous, it does not require a firm to be authorised by that date.” And it charges the FCA with “gold plating” the directive provision adding that it also has “serious concerns” about the resources available to the FCA to deal with AIFMD applications. It adds that “it is not realistic to suggest that a firm which is not authorised by July 22, 2014 will simply have to cease business.”
Jerome Lussan writes in response to the CLLS’s letter:
1. The charge of gold plating AIFMD is hardly true. The FCA has fought hard to lessen its impact. As for the timing of its implementation this is smart and should be commended. The UK understands the lack of trust from the public for financial professionals and realises the gain that can be achieved if they can keep the UK financial industry ahead of negative public perception, which weakens the development of the financial industry.
2. The UK should act ahead of other countries, given the number of alternative managers in the country. Timing is vital and the industry should see and support this rather than react in the way the CLLS’s letter reads.
3. Of course resources are a concern particularly when you consider the need to approve custodians first! However the FCA is aware of this and must be trusted to remain commercial. This lack of support from the industry, especially my legal peers, leaves me in disbelief. Are the lawyers living behind goodplated meeting rooms unaware of the financial and political crisis finance has faced since 2008? Or are lawyers so dependent on their clients that they are unable to offer leadership and just repeat what their AIFM clients have been moaning about? The truth is that there is a political will to put an end to uncontrolled finance and this is not the time to have this sort of spoiled princess approach. It will give ammunition to populist politicians.
4. We can complain about the deadline but the reality is that the FCA seeks to have the industry come together sooner rather than later. Leadership by the UK on this is crucial for its and European credibility. For the FCA to exert some pressure on the industry that has until now had too much influence on the regulator is fine. The FCA can’t be seen as weak and must stand its ground. It will act reasonably. There is little reason to doubt that with the right approach and some common sense UK financial businesses can’t meet these deadlines. The CLLS’s letter sends the opposite signal. It is incongruous and hurtful for our industry.”
