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FCA says four fund firm may have breached competition law
November 29, 2017 / 10:24 AM / 12 days ago

FCA says four fund firm may have breached competition law

LONDON (Reuters) - Britain’s markets regulator said four asset management companies might have broken competition law during share sales in the first case that uses its antitrust enforcement powers.

The logo of the new Financial Conduct Authority (FCA) is seen at the agency's headquarters in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren

The Financial Conduct Authority (FCA) alleges that Artemis Investment Management, Hargreave Hale, Newton Investment Management and River & Mercantile Asset Management shared information about how much they planned to pay for stock deals shortly before prices were officially set.

Newton said it was cooperating with the FCA, that there had been no loss to any clients or investors as a result of the activity and that it did not anticipate any loss in the future.

“We take compliance matters seriously and are committed to ensuring that our business is managed with the highest commitment to legal and ethical standards,” it said in a statement on Wednesday.

Artemis and River & Mercantile also said they were cooperating with the FCA. Hargreave Hale did not immediately respond to requests for comment.

The FCA, whose main allegations centre on one or more of two listings and a share placing in 2014 and 2015, has issued its first so-called “statement of objections”.

These are provisional findings that the FCA thinks firms have infringed competition law that also give them the opportunity to respond. The FCA has had the power to bring such competition enforcement cases since April 2015.

The FCA alleges Newton, Hargreave Hale and River & Mercantile Asset Management disclosed and accepted information about the price they intended to pay for shares in one initial public offering (IPO) and one placing in 2015.

Artemis Investment Management and Newton also shared information about the price they intended or were willing to pay for shares in relation to another IPO in 2014, the FCA said. It did not give further details.

“The FCA will carefully consider any representations from the firms before deciding whether the law has been broken,” it said.

The firms can now make written and oral representations, which will be considered by the FCA before any final decision is taken.

The final decision is taken by a three-member Competition Decision Committee group, which is separate from the case investigation team and is not involved in the decision to issue the statement of objections.

Firms that breach competition rules could face a fine of up to 10 percent of annual worldwide group turnover, the FCA said.

Reporting by Simon Jessop and Kirstin Ridley; Editing by Keith Weir

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