Fund groups found to have used commissions to pay for access to corporate executives will not face financial penalties, the FCA has said.
The regulator does not intend to fine fund groups which acted outside investors' best interests by using client commissions to pay brokers to secure meetings with senior company executives.
Ed Harley, head of the regulator's asset management division, told the FT that firms were not focusing enough on getting value for money, but said the FCA will not treat such breaches as a "blatant disregard for the rules" and will not take "strong action" against them.
In March this year, Harley told the paper fund groups could face large fines if found to have broken the rules.
His comments came after a Dear CEO letter issued by the regulator last November warned fund managers over conflicts of interest relating to the use of commission payments and demanded assurance from fund group heads.
Last week at the FCA's Asset Management Conference, chief executive Martin Wheatley announced a thematic review into fund managers' use of dealing commission to pay for broker research and corporate access.
Ahead of the release of Wheatley's speech, it was revealed the regulator found up to £500m may have been spent by asset managers to access company bosses last year.
Wheatley said the regulator will publish a consultation paper on corporate access next month.
The thematic review will look at how sell-side brokerage services are translated into fund manager costs, and what the latter do to limit these expenses.The consultation paper, meanwhile, will clarify the FCA's existing rules on corporate access.
Wheatley (pictured) said the FCA had increasingly come across evidence the current regime does not sufficiently enhance transparency and accountability.
As a result, he said it is time for a "domestic debate" about how to reform the dealing regime, and in particular the use of dealing commissions.
"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," he said.
"We will look at both buy-side and sell-side practices in this area as part of our examination of bundled brokerage arrangements."
Wheatley said this body of work will be accompanied by the November consultation paper, specifically focusing on how "research" for which asset managers pay third party firms is defined, and what is acceptable to purchase with clients' dealing commissions.
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