The Investment Management Association (IMA) is calling on the FSA to investigate what it calls weaknesses with default arrangements in cash equity markets "as a matter of urgency".
According to the association, problems were exposed by the "chaos" surrounding the September collapse of Lehman Brothers and the subsequent number of failed trades which had been placed with its brokers by investment managers. It says reforms are needed to ensure defaults within the UK equity market can be dealt with "swiftly and authoritatively", and that investors can obtain "early certainty" about their trades and associated market risk. "The Lehman default has resulted in a state of chaos for managers - operationally, legally and from a risk perspective," IMA chief executive Richa...
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