First outing for FCA's competition enforcement powers in suspected information exchange breach by four asset management firms

On 29 November 2017, the Financial Conduct Authority (FCA) issued a 'statement of objections to four asset management firms alleging they breached UK/EU competition law by sharing sensitive pricing information on 'Initial Public Offerings' (IPOs). This is the FCA's first use of its 'concurrent' competition law enforcement powers since obtaining them on 1 April 2015 and follows its recent 'market investigation reference' in the related investment consultancy sector (discussed here).The FCA issued its statement of objections to:

  • Artemis Investment Management LLP (Artemis);
  • Hargreave Hale Ltd (Hargreave);
  • Newton Investment Management Limited and its ultimate parent, The Bank of New York Mellon Corporation (Newton); and
  • River and Mercantile Asset Management LLP and its ultimate parent, River and Mercantile Group PLC (River).

These asset management firms allegedly disclosed the price they intended to pay (and/or accepted such sensitive pricing information) concerning up to two IPOs and one placing, shortly before the share prices were set. The alleged breach divulged firms’ plans during the IPO or placing process, when they should in fact have been competing for shares.The FCA's main allegations against the firms are set out in the statement of objections, namely:

  • In 2015, Newton, Hargreave and River disclosed and/or accepted information about the price they intended to pay for shares in relation to an IPO and a placing.
  • In 2014, Artemis and Newton shared information about the price they intended, or were willing, to pay for shares in relation to another IPO.

These findings are provisional and may not necessarily lead to an infringement decision. The statement of objections sets out the action the FCA is proposing to take, and its reasons for this. The recipients will have the opportunity to make written and oral representations and the FCA will consider these before deciding whether the firms have breached competition law. Any final infringement decision will be made by an FCA decision group that is separate from the case investigation team and is not involved with the decision to issue the statement of objections.Regulated firms are required to bring their own actual and possible 'significant' contraventions of UK/EU competition law to the FCA’s attention under FCA Handbook Principle 11 (Principles for Businesses - Relations with Regulators).

For further information on competition enforcement powers in relation to financial sector activities, please contact Andrew Maxwell (Head of Competition) or Adam Edwards (Head of Financial Services).


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