The Investment Management Association says it does not believe UK equities analysts have been compro...
The Investment Management Association says it does not believe UK equities analysts have been compromised to the same extent as their US peers on the issue of stock recommendations in part because of a more sophisticated audience.
Record fines are currently being handed out by US regulators to major investment banks whose analysts wrote falsely positive notes on companies in order to win investment banking business for their employers.
The FSA is proposing to look into changing rules in the UK too, given the close links between Wall Street and the City.
However, the IMA says new rules are not needed here because as far as its members are concerned analysts' notes are important but "rarely the deciding factor in fund managers' investment decisions."
The association also says that the US "star analyst" culture did not develop here and that the main audience of fund managers is "better placed to judge the nature and extent of any potential conflicts of interest".
The FSA is likely to hear somewhat different answers to its Discussion Paper 15 from other associations and organisations.
The fines being handed out on Wall Street are largely being driven political reaction to retail investor anger.
This anger was first unleashed by the infamous smoking gun email from former internet stock star analyst Henry Blodget of Merrill Lynch, showing he was pumping up stock with 'buy' recommendations, while in private denigrating that same stock as junk.
Other emails indicated similar actions by other analysts.
Various accounting scandals then compounded the hurt felt by retail investors, who accounted for well over 40% of all Nasdaq trades at the peak of the dot.com bubble.
The FSA is already under fire by MPs in the Treasury Select Committee over its handling of the split capital investment trust issue and is likely to proceed with caution on this issue, which also involved potential losses by retail investors.
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