Vanguard accused of breaching UK asset concentration limits - reports
The group’s £40bn LifeStrategy range seems to have breached the Financial Conduct Authority’s asset concentration limits, which allow UCITS funds to own up to 25% of the units of another vehicle that is registered as a collective investment scheme.
According to reports by Bloomberg, the group's £40bn LifeStrategy range appears to have breached the Financial Conduct Authority's asset concentration limits, which set out that UCITS funds can own up to 25% of the units of another vehicle that is registered as a collective investment scheme — the rules are also referred to as COLL.
The LifeStrategy range — comprising five UK-domiciled funds — invests in other funds, also managed by Vanguard and, in aggregate, they own around 40% of a single other vehicle, namely the Vanguard FTSE UK All Share index fund — which has around £12bn in assets and is registered as a collective investment scheme.
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The ownership percentage appears to be above the 25% allowed under the FCA rules, leading several to criticise both Vanguard and the FCA — especially as the company does not appear in the regulator's latest waiver and modification list, which shows firms that have been granted special permissions to act outside the FCA's rulebook.
A spokesperson for Vanguard Group said: «Through our engagement with the FCA, we are satisfied that our LifeStrategy funds meet applicable diversification/concentration requirements.
»We have sought clarity on the matter with the FCA and legal representatives several times. As part of those engagements, there was acknowledgment that the COLL rules have been a source of confusion within the industry, given the requirements in the
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