The FSA is preparing to clamp down on assets managers who use clients’ money to pay for access to chief executives, according to the FT.
According to the paper, FSA head of asset management supervision Ed Harley raised the prospect of multi-million pound fines for fund managers who have breached the rules.
Harley said analysis by the regulator of the use of client commissions by 15 asset managers found large payments that were “hard to justify”. He said most of these covered payments for corporate access.
Harley said: “There is an awful lot of clients’ money being used here and it has to be used properly.
“When we challenged firms as to how they can justify [payments for corporate access] they couldn’t give us a coherent answer that met [the FSA’s] criteria.”
The threat of fines follows a warning from the FSA in November that some firms are failing to properly manage conflicts of interest that could impact on their clients.