Wholesale sector competition review

Published: 09/07/2014   Last Modified : 09/07/2014
Wholesale sector competition review
We have launched a review of competition in the Wholesale sector to identify any areas that might merit further investigation through an in-depth market study. We are asking for comments on this Call for inputs by 9 October 2014.

Wholesale financial markets play a crucial role in our economy and it is important that competition works effectively within them. That is why we have launched a review of competition in the wholesale sector to identify any areas that might merit further investigation through an in-depth market study. This review is an exploratory exercise that aims to highlight where competition may be weak or not be working properly in these markets.

The review will focus primarily on competition in wholesale securities and investment markets, and related activities such as corporate banking. We have started a three-month consultation exercise with the publication of a call for inputs document, to gather views and evidence from stakeholders.  To aid discussion, the document includes some examples of potential competition issues that have been raised by stakeholders previously, or drawn from our internal research and existing supervisory and thematic work. We seek views on the likelihood of these being borne out, as well as suggestions for other issues that we should explore.

What will we look at?

The review will focus primarily on competition in wholesale securities and investment markets, and activities that are related to these, including:

  • markets and market infrastructure
  • investment banking
  • asset management
  • corporate banking

What are the issues to be explored?

  • we are interested in features of a market or behaviour that could inhibit or distort competition in the market
  • to aid discussion, we have provided examples of the types of competition issue which might warrant further investigation. These include examples of potential barriers to entry or expansion, information asymmetries, conflicts of interest, and cross-selling or bundling of services
  • we are seeking views on these and any other potential competition issues in the sector to explore

Why are we publishing this call for inputs?

  • we have considerable experience of dealing with wholesale markets and their participants but we have not previously approached them from a competition perspective
  • we are therefore conducting a review of competition in the wholesale sector to identify any areas that might merit further investigation through an in-depth market study
  • the review is an exploratory exercise that aims to highlight areas from the relevant markets where competition may be weak or not be working properly
  • this document provides an opportunity for stakeholders to engage in the discussion and bring relevant issues to our attention. We will take into account stakeholder responses when deciding which, if any, topics would benefit from closer inspection through an in-depth market study

Wholesale sector competition review- Call for inputs

What are the next steps?

We welcome responses to our call for inputs by 9 October 2014.

We intend to publish a feedback statement later this year, and we would expect any market study to be launched in early 2015.

We will engage with stakeholders through a series of round tables during the consultation period, if you would like to attend a round table, please send an email to wholesalecompetition@fca.org.uk letting us know your name, firm, job title and which topics you are interested in discussing with us. Please note that attendance at the round tables is subject to availability.  

How to submit views and evidence

We are asking for your views or evidence on the matters covered by the call for inputs. We are interested in responses on the potential competition issues discussed in the document and any other wholesale areas within the scope of the review where you feel that competition is not working effectively.

You can send your response by electronic submission using the form on our website or by emailing us at wholesalecompetition@fca.org.uk. The deadline for responses is Thursday 9 October 2014.

Alternatively, please send your response in writing to:

Becky Young
Competition Department
Policy, Risk and Research Division
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

 

 

 

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