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'A critical period': Martin Wheatley's speech on fund charge conflicts
on Oct 30, 2013 at 11:25
Therefore, the second strand starts here at home. Alongside the longer-term EU debate, we will be applying our new judgement-based supervisory model and consulting on changes to clarify aspects of the 2006 regime in the short term.
As part of opening this debate, we want to make sure we are predictable and provide you with a clear flight-path to how we are going to engage with you over the coming months. The first significant step will be a thematic review following up on our conflicts of interest findings from last year, using dealing commission as an example of how firms have responded to our concerns. We will look at both buy-side and sell-side practices in this area as part of our examination of bundled brokerage arrangements.
This will be followed by a Consultation Paper in November which will seek your views on how to improve the current regime. Specifically we will focus on providing clarity around how we define ‘research’ and what we consider is eligible and non-eligible when purchasing goods and services from clients’ dealing commissions.
I think it’s obvious from what I’ve said, that I believe we must work together; we need your engagement and input. We need industry feedback so that we provide clear regulatory expectations that help firms make the right judgements in the shorter term.
I am confident that we will work collectively to find a solution. Since releasing our findings on conflicts of interest last year, practices have improved in this area and senior executives really got engaged to improve the sector.
There were very few complaints or evidence of foot dragging, but rather a real determination to fix this to benefit the sector. The industry has proven its willingness to tackle challenging issues in the past; this whole debate is about becoming an industry fit for the future, and I’m sure you would share my expectation that you are part of the constructive solution.
I have confidence that we can find a collective solution and that is why I am delighted to invite the chief executive of the Investment Management Association, Daniel Godfrey to the stage.
We consider the IMA’s own review of this market valuable and welcome both the collaborative approach and the consumer orientated position that the IMA has taken. We understand that their review has led to interesting conclusions, and we look forward to hearing what these are from Daniel in a few moments.
But most importantly, I consider there to be a common interest in tackling the challenges before us, not just in Europe, but in the short-term here domestically, so we can continue to trade on our reputation of being reliable and transparent.
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