The word 'expect' or 'expectation' surfaces 17 times in a letter that the UK's Financial Conduct Authority sent to asset managers recently.

Part of the rulebook that deals with product governance (PROD) is also invoked. In the UK, AFMs are responsible for ensuring compliance with it. At 1.1.2G it states: "Product oversight and governance refers to the systems and controls firms have in place to design, approve, market and manage products throughout the products’ lifecycle to ensure they meet legal and regulatory requirements."

Another aspirational passage that seems to be unrelated to any rule states: "We wish to see products designed with the best interests of a specified target market in mind. Such products should not include...funds tracking an undisclosed index or where fees exceed target returns." It is reviewing product governance in the sector now and is nearly finished. 'Host' Authorised Corporate Directors or ADCs, which sometimes manage funds, are an especial concern.

The Senior Managers and Certification Regime, which the FCA extended to asset managers last year, represents another obvious part of governance. When mentioning it, the FCA makes the extraordinary claim, with no reference to the rules, that the SMCR should "not be treated as a discrete compliance project."

The Asset Management Market Study

The regulator published its Asset Management Market Report in June 2017 and changed some rules in line with its findings. It tells CEOs in the recent letter to obey them and adds: "We will seek evidence of meaningful challenge at AFM boards on proposals made by the executive–including on costs, fees and product design."

Saying goodbye to Libor

The FCA has already made it clear that firms should make plans for LIBOR ceasing at the start of 2022. The regulator appears to be worried that Britain's financial market will fail to 'transition away' from it. Its only expectation in this area is for firms to re-read a 'Dear CEO' letter on the subject that it sent out in September 2018.

Operational resilience

Here the FCA calls the reader's attention to CP19/32, its consultative document that it published in December. The period for comment closes on 4 April. Expectations come thick and fast here, with the FCA at one point hazarding an private opinion about how a firm ought to obey one of its principles: "Where your firm suffers material technological failures or cyber-attacks, we expect you to contact us promptly as part of your responsibilities under Principle 11. We expect to undertake further proactive work on this theme in the coming months." 'Proactive work' presumably means spot visits.

At the end of the document the FCA exhorts firms to think about Brexit - an unnecessary reminder in all likelihood.