This paper reports on the main issues arising from Discussion Paper DP14/3: Discussion on the use of dealing commission regime, and sets out next steps.
Why are we publishing this paper?
Dealing commission – the charges paid by consumers when investment managers execute trades and acquire external research on their behalf – is worth around £3 billion a year. In July 2014 we published a discussion paper as part of our work looking at the way investment firms use dealing commission, and examining the wider market for research. This feedback statement:
- Forms part of our broader focus on wholesale conduct.
- Summarises responses received to our competition and policy analysis of potential reforms to our current dealing commission regime linked to proposals under MiFID II.
- Sets out our views on further developments in EU discussions and next steps.
Who should read this paper?
- Investment managers, including UCITS management companies when carrying on scheme management activity and alternative investment fund managers (AIFMs) carrying out AIFM investment management functions respectively.
- Customers of investment managers, including:
- institutional investors, for example retail fund and pension fund trustees
- retail investors who have investments in retail funds (which may be through a wrapper such as an Individual Savings Account), or who have a direct relationship with an investment manager, for example individuals with discretionary-managed investment portfolios
- Brokers (including investment banks), and third-party providers of independent research and other ancillary services supplied to investment managers
- Corporate issuers
- Relevant trade associations and representative bodies for the above groups
What are the next steps?
We will publish further information, including a consultation on our overall implementation of MiFID II, by late Q4 2015.
Find out more:
- DP14/3 Discussion on the use of dealing commission regime (July 2014)
- CP13/17 Consultation on the use of dealing commission rules (November 2013)
- PS14/7 Changes to the use of dealing commission rules: feedback to CP13/17 and final rules (May 2014)
- FSA Report: Conflicts of interest between asset managers and their customers: identifying and mitigating the risks (November 2012)
- Martin Wheatley speech, ‘Shaping the Future in Asset Management’, FCA Asset Management Conference (October 2013)