As you are aware, Sapphire is the FCA authorised manufacturer (co-manufacturer) of SEIS, EIS as well as LP/GP funds.  Our funds bear the names of our fund advisers / mentors, who spearhead the fund's thematic approach by providing the industry specialism / expertise.

We recently sent an email to all the funds' distributors/IFAs with an attachment titled “Letter to Distributors” on the 29th of April, to meet the FCA's required PS22/9 deadline of the 30th of April, where we shared our workings on the target market value assessment. 

This means that distributors, by the end of July 2023, should have a distribution strategy appropriate for the needs, characteristics, and objectives of the target market in order to adhere to regulatory policy.

IFAs/distributors hold a responsibility to support manufacturers’ reviews of products and services by providing information when requested, such as fees, and distribution arrangements.

Now, here comes the prickly part: if a firm does not comply with Consumer Duty, there is a requirement to notify the FCA.

Per FCA PS 22/9 page 17, the policy states :

”We have introduced a rule requiring firms to notify us if they become aware that another firm in the distribution chain is not complying with the Duty. We have also introduced a rule requiring a firm to notify other firms in the distribution chain if it thinks they have caused, or contributed to, harm to retail customers.”

I can appreciate that this notification may be creating friction in stakeholder relationships across the entire sector.

However, we must remember our collective obligation under Consumer Duty to ensure good outcomes for our retail investors. In my prior blog FCA PS22/9: What Consumer Duty Means to Sapphire,  explains why we as a firm support this policy. 

Doing the right thing is not always easy.  We appreciate our fund advisers and the IFAs/distributors support and stand beside us in solidarity for our continuing efforts to ensure that we uphold our duty to our investors. #Financiallivesmatter.

If you have any questions or concerns regarding this matter, please don't hesitate to reach out to us or contact me directly on 07590043699. 

Sapphire Capital Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN: 565716).  The content is for information purposes only and does not constitute investment advice or a recommendation to invest. SEIS and EIS tax reliefs depend on individual circumstances and may change. The value of investments may go down as well as up, and investors may not get back the full amount invested. Past performance is not a reliable indicator of future performance.  Investment outcomes can differ substantially, potentially resulting in the loss of all your capital invested. Shares in early-stage companies are illiquid: you may be unable to sell your holding for several years, if at all. Investors should not rely on this article as a basis for investment decisions and must consider the illiquid and high-risk nature of early-stage investing. No warranty as to future outcome is implied nor should one be inferred. Tax treatment depends on individual circumstances and may be subject to change. Investments of this type are generally not covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service if the underlying companies fail.