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CMA Order: don't forget to self-certify


There is an approaching deadline (7 January 2022) for trustees again to self-certify their compliance with the Competition and Markets Authority (CMA) Order regarding investment consultants' objectives and tenders for fiduciary management services.


In 2019 the CMA issued an Order which introduced new requirements in relation to investment governance, affecting most occupational pension schemes. Further details of the CMA Order can be found in our August 2019 client briefing but in summary the two key trustee requirements were:

  • Investment consultancy: By 10 December 2019, trustees were required set strategic objectives for their investment consultants. This applies both when engaging new consultants and for appointments already in place.

  • Fiduciary management: Trustees who wish to delegate investment decisions for 20% or more of their scheme assets to a fiduciary manager must, from 10 December 2019 onwards, run a competitive tender with at least three unrelated firms. Trustees who had appointed such a fiduciary manager without a tender on or before 10 June 2019 had to put the service out to tender, generally within five years from the commencement date of the existing arrangement (with a longstop in June 2021).

In 2019 the government consulted on draft regulations with similar effect to the CMA Order so that compliance could be policed by the Pensions Regulator rather than the CMA. The publication of the finalised regulations has been delayed, so the CMA Order still remains in force. Alongside the CMA Order, the Pensions Regulator has published guidance for trustees on the above requirements.

What is required now?

The CMA Order requires trustees to self-certify their compliance to the CMA by 7 January each year. The certification process is intended to enable the CMA to carry out its statutory duty to monitor compliance with the CMA Order. The first annual certification deadline was 7 January 2021 and the second is 7 January 2022.

There have been no changes to the requirements since last year, so once again self-certification involves trustees submitting two confirmatory statements to the CMA.

  1. Compliance Statement. This is a statement in the prescribed form set out in the CMA Order confirming the trustees' compliance with their obligations to set strategic objectives for their investment consultants and in relation to fiduciary management tendering, in both cases for the period 10 December 2020 to 10 December 2021. For the purposes of completing this statement, the investment consultancy requirements are in Part 7 of the CMA Order and the fiduciary management requirements are in Part 3.

    It has been clarified that the statement needs to cover the fiduciary management requirements even if the scheme has no such arrangements (i.e. the trustees would in that case be confirming that they are compliant with the CMA Order because there are no steps that they needed to take).

  2. Signed Certificate. The compliance statement must be accompanied by a certificate signed by the chair of trustees (or, if there is a sole corporate trustee, any director of the trustee) stating that:

    1. The relevant compliance statement has been prepared in accordance with the requirements of the CMA Order; and

    2. for the period to which the compliance statement relates, the trustees have complied in all material respects with the requirements of the CMA Order and reasonably expect to continue to do so.

    Importantly, this signed certificate includes a forward-looking confirmation that the trustees reasonably expect to continue to comply with the CMA Order. Trustees may wish to take advice from their investment consultants or other advisers in relation to this point, especially if investment consultant objectives are due to be revised or a fiduciary manager competitive tender is to be carried out.

Next Steps

In many cases, trustees may feel comfortable to issue their compliance statements and certificates. However, trustee boards, or the relevant sub-committee to whom this topic has been delegated, should work with their advisers to double-check their compliance with the CMA Order before doing so.

Trustees should also make a plan to submit both the compliance statement and signed certificate to the CMA by email to "with the name of the business in the subject box" (we presume this should refer to the name of the scheme) in advance of 7 January 2022. An automated response will confirm receipt.

Sufficient time should be allowed for the signing of the certificate where trustees and scheme administrators are working remotely. Electronic signatures are acceptable.

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