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FSA sets out plans for regulation of soft commission

The FSA has published consultation rules addressing the issue of soft commission and bundled brokerage arrangements.

The rules, combined with proposals developed by industry, aim to tackle the lack of transparency associated with soft commission and promote improved management of conflicts of interest. They confirm the FSA’s position that fund managers’ use of commission should be limited to the purchase of execution and research”services.

Under the proposed rules, investment managers will have restricted use of dealing commission for the purchase of execution and research services.

Investment managers will have to disclose details of how these commission payments have been spent and what services have been acquired with them to their customers.

Managing director of the FSA’s wholesale business unit Hector Sants says, the proposals would make the market for execution and broker services more efficient and in-crease the incentive to provide better value for money to investors.

The IMA which helped develop the proposals, says it will be looking closely at the detail, in particular the ways in which the views expressed by the FSA in its November policy statement on the issue (PS04/ 23) are incorporated in the rules, and if there have been any changes in the FSA’s thinking since November.

IMA head of communications Mona Patel says: “This next stage, consideration of the FSA’s proposed rule changes, is an important one which we must get right if we are to avoid unintended consequences.”


SII appoints lawyer as new adviser on compliance

Securities & Investment Institute announces the appointment of Christopher Bond as SII adviser on compliance, with effect from April 19. Bond has specialist knowledge in financial services regulation and compliance, and was general counsel and assistant company secretary of Reuters for four years. Most recently, Bond has been a solicitor with City law firm Field […]

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Advisers split as appeal deal is turned down

The FSA and the Financial Ombudsman Service have ruled out setting up an independent appeals tribunal to allow IFAs to challenge ombudsman decisions, which some advisers argue breaches their human rights.


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