We are consulting on proposed changes to our use of dealing commission rules in our Conduct of Business Sourcebook (COBS). The changes are designed to ensure investment managers make appropriate judgements and control costs on behalf of clients when using dealing commission to pay for goods and services.
We want to clarify our rules that allow investment managers to use dealing commissions – paid from their customers’ funds – to acquire execution-related and research goods and services.
These changes will help us to ensure that wholesale markets work well and in the best interests of consumers. We want to encourage investment managers to control costs on behalf of their customers with the same rigour as they pursue investment returns.
This CP forms part of a broader discussion launched by Martin Wheatley at the FCA Asset Management Conference in October 2013, to consider whether wider reforms are needed in the longer-term to address shortcomings in the use of dealing commission regime.
We will continue this discussion on wider reform options alongside this CP, and in light of our supervisory findings, potential EU reform in this area and an increasing industry view that existing practices should be improved.
This CP will interest:
It will also interest relevant trade associations, brokers (including investment banks) and providers of services such as market data services and independent research.
Please send us your comments by 25 February 2014. We intend to publish a Policy Statement in spring 2014.
For more information:
Copyright © 2014 FCA. All Rights Reserved.