| FSA confirms proposals to tackle softing and unbundling |
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| 16/05/2004 | |
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In keeping with its review of soft commission arrangements and bundled broker services that began in July 2001, the Financial Services Authority will limit the scope for softing and bundling to execution services and investment research. The FSA calls upon the industry to complement regulatory action through the development of a transparent mechanism for identifying the price of investment research included in commissions. The Investment Management Association (IMA) will lead work with brokers, fund managers and pension fund trustees to develop this improved system of research charge disclosure. Richard Saunders, Chief Executive of the IMA commented: "We have a full work programme with these initiatives, but are delighted that the FSA have given us the opportunity to demonstrate what can be achieved through market-led solutions." If successful, this system should be enough to prevent further regulatory action by the FSA. The FSA will assess in December whether the industry's work on enhanced transparency and disclosure is on track to achieve the desired outcomes. Accountability Christina Sinclair, Head of Institutional Business Policy at the FSA, said: "These measures will together help strengthen fund managers' accountability to their clients. If the industry fails to deliver a high quality and workable solution, we will reconsider the need for stronger regulatory intervention, which might include the rebating proposal set out in our consultation paper last year." These measures will allow investors to make more informed decisions about services charged to fund assets by fund managers, and help to ensure that investment research and execution services are sourced in the interests of fund investors. According to the FSA, unbundling regulation will not act as a scarecrow for fund managers. Deloitte and Touche carried out research showing that fears of a mass exodus of fund management business off shore following implementation of the full CP176 package were unsubstantiated. This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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