The Financial Conduct Authority has applied its competition enforcement powers for the first time by alleging that four asset management companies may have broken competition law.
In a statement yesterday, the FCA said 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 before prices had been officially set. The provisional findings centre on one or more of two initial public offerings and one placing in 2014 and 2015.
‘The sharing generally occurred on a bilateral basis and allowed firms to know the other’s plans during the IPO or placing process when they should have been competing for shares,’ the FCA said.
The main allegations are;
- In 2015, Newton, Hargreave Hale and River & Mercantile Asset Management disclosed and/or accepted information about the price they intended to pay for shares in relation to one Initial Public Offering and a placing;
- In 2014 Artemis Investment Management and Newton shared information about the price they intended or were willing to pay for shares in relation to another IPO.
The FCA has had the power to bring competition enforcement cases since April 2015. The statement marks the first time the FCA has issued a ‘statement of objections’ - a notice that warns firm that they may have infringed competition law. Firms are allowed to respond to the notice by making written and oral representations.
Artemis said it noted the provisional findings and would continue to cooperate with the FCA’s investigation.
Newton said it had been cooperating fully with the FCA and will continue to do so until this matter reaches its conclusion and that to date there had been no loss to any clients or investors. 'We take compliance matters seriously and are committed to ensuring that our business is managed with the highest commitment to legal and ethical standards,’ a spokesperson added.
River & Mercantile and Hargreave Hale are yet to respond to a request fro comment.
‘The FCA will carefully consider any representations from the firms before deciding whether the law has been broken,’ the FCA said.
The allegation surrounding Hargreave Hale dates back to before it was bought by Canaccord Genuity Wealth Management.
A spokesperson for Canaccord said it was disclosed during its due diligence process. ‘Hargreave Hale has fully cooperated with the FCA and will be making further representations to the FCA for its review and consideration, with respect to the two transactions in question,’ they added.