The Financial Services Authority in an effort to glean as many views as possible for its review of s...
The Financial Services Authority in an effort to glean as many views as possible for its review of soft commissions and bundling is to extend the consultation period until the end of October. The invitation to make comments forms part of the authority's Best Execution paper to be published early next year.
The reassessment forms part of the Myners review of institutional investment as well as within the framework of the Financial Services and Market Act.
FSA Conduct of Business Standards director Michael Folger said: "The authority will be looking carefully at the regulatory aspects of soft commissions as foreshadowed earlier this year, within the framework of the Financial Services and Markets Act.
"The Myners review pointed to some important issues on soft commissions and, in the light of that, we are bringing forward our planned study of market practices."
As part of the ongoing reassessment the FSA is to extend the work on best execution to include a full review of its rules on soft commission as well as bundling. Soft commission, also known as 'softing', is the practice where services or products are exchanged between businesses without payment.
The Association of British Insurers Head of Investment Affairs Peter Montagnon said: "We welcome the Treasury's tough, but practical, approach to the issue of "soft" commissions. There may be some market imperfections, and it is right to suggest they should be dealt with if they are discovered.
"The great advantage is that we shall now have a much better picture of what is really going on, and an opportunity to develop and implement improved structures to ensure the availability of clearer information about transaction costs."
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