1. Investment Funds, Markets Liquidity and the Investor Financial Risks International Forum Paris Europlace Institute of Finance 21 March 2016 David Lawton, Director of Markets Policy & International, FCA 1

2. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 2

3. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 3

4. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 4

5. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 5

6. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 6

7. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 7

8. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 8

9. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 9

10. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 10

11. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 11

12. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 12

13. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 13

14. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 14

15. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 15

16. Investment Funds, Markets Liquidity and the Investor Introduction Background on the debate History A focus on asset managers Funds or fund managers? Potential sources of risk What work is being done to consider these risks? Fund liquidity Market liquidity FCA economists’ research The investor angle – expectations, behaviour and disclosure Investor behaviour Disclosure Outcomes Conclusion 16