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FCA steps up crackdown on dealing commission
by Max Skjönsberg on Nov 25, 2013 at 12:44
The Financial Conduct Authority (FCA) has set out plans to crack down on fund managers’ use of dealing commission, proposing on a ban on the payments being used to buy corporate access.
The regulator as launched a consultation on dealing commission having identified shortcomings and inherent flaws in the current system.
The FCA said the consultation aimed to make the use of charges paid by consumers for executing trades and related services fairer and more transparent.
It has proposed a ban on using dealing commission to pay for corporate access and stricter rules on which type of research the commission can be used to pay for.
It said fund managers could still pay for corporate access, but that this should not be paid for out of dealing commission.
The regulator said it would engage with investors and asset managers for a three-month consultation period, and expected to finalise the new rules in the second quarter of next year.
FCA chief executive Martin Wheatley (pictured) said: ‘We need to be confident that managers are putting their clients’ value for money, good returns, and transparency at the heart of how they do business. So today’s consultation is part of a wider debate on the need to reform the use of the dealing regime, particularly the use of dealing commissions, and how industry practice can be improved now to the benefit of all.’
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