FCA uses competition enforcement powers for the first time against four top firms

The Financial Conduct Authority (FCA) is using its competition enforcement powers for the first time as it accuses four asset management firms of breaking the competition law.

It has issued a statement of objections to Artemis Investment Management LLP, Hargreave Hale Ltd, Newton Investment Management Limited and River & Mercantile Asset Management LLP.

The FCA alleges that the four firms shared information by disclosing the price they intended to pay, or accepting such information, or both, in relation to one or more of two Initial Public Offerings (IPOs) and one placing, shortly before the share prices were set.

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.

Main allegations

The FCA’s main allegations against the four firms are that separately:

• In 2015, Newton Investment Management, Hargreave Hale and River & Mercantile Asset Management LLP disclosed and/or accepted information about the price they intended to pay for shares in relation to one IPO and a placing
• In 2014 Artemis Investment Management LLP and Newton shared information about the price they intended or were willing to pay for shares in relation to another IPO.

Statement of objections

A statement of objections gives firms notice that the FCA thinks that they have infringed competition law and the opportunity to respond by making written and oral representations.

These are provisional findings and may not necessarily lead to an infringement decision. The FCA will carefully consider any representations from the firms before deciding whether the law has been broken. The statement of objections will not be made public, however any final decision taken will be published providing more detail about the case.

The Competition Act 1998 prohibits agreements, practices and conduct that may damage competition in the UK.