Understanding and navigating the intricacies of industry sector limits can be challenging. At Funds-Axis, we leverage our expertise to handle this for you, providing real-time monitoring of critical industry sector limits. This enables you to focus on your core business activities. Our comprehensive coverage includes:
Introduction
- The UK Investment Association (IA) sector requirements, ensuring adherence to guidelines for fund investment in the UK.
- The European Fund and Asset Management Association (EFAMA) sector requirements, maintaining compliance with European fund classification standards.
Our unique approach combines comprehensive coverage, accuracy, and promptness, distinguishing us in the RegTech landscape. By partnering with Funds-Axis, you gain a strategic advantage, mitigating risk while promoting business growth.
EFAMA – European Fund Classification System
The European Fund Classification (EFC) system, overseen by the European Fund and Asset Management Association (EFAMA), is a vital regulatory framework for the industry. It standardises fund categories across Europe, enabling more accurate comparisons and analysis.
Key resources related to the EFC include:
- EFAMA’s Official Documentation: The complete classification framework can be viewed on the EFAMA website. Visit the European Fund Classification page on EFAMA for more details.
- Recent Presentation Playback: Gain deeper insights into the EFC through a recent presentation available for playback. You can watch the video here.
The EFC is administered by FE Fundinfo, with the classification undergoing a comprehensive review each quarter to ensure its ongoing relevance and accuracy.
Importantly, access to the EFC is freely available to the industry, making it an invaluable resource for fund management and compliance.
UK - IA Sectors
The Investment Association (IA) sectors are a cornerstone of UK fund management, offering a framework for comparison and compliance across approximately 4,500 funds spanning a broad spectrum of assets, strategies, and styles. Currently, there are 57 distinct IA sectors, each with its own set of rules that funds must adhere to in order to maintain their sector classification.
You can access a complete list of these sectors and their respective definitions on the IA’s official website.
ESG/Sustainability Considerations
As of now, the IA does not have sectors specifically dedicated to ESG or sustainability factors. However, the IA recognises Responsible Investment as a crucial area of focus. The Financial Conduct Authority (FCA) is in the process of finalising their Sustainable Disclosure Requirements (SDR) labelling regime. It is anticipated that the IA will adapt its sector classifications in line with the outcomes of the FCA’s initiative.
Oversight and Compliance
The IA has appointed Morningstar to oversee fund compliance with sector requirements. Morningstar’s role includes collecting data from fund managers, identifying potential breaches of sector requirements, and reporting these to the IA. This process occurs on a monthly basis.
If a fund is found to not meet the requirements of its sector, the IA will take action, which may include removing the fund from the sector. Please note that due to the inherent delays in the reporting process, this oversight is not conducted in real-time
Resources
