The FSA, the UK’s equivalent of the SEC, wants to stop asset managers from using commissions to compensate brokerage firms for scheduling meetings with corporate management. Below are links to recent articles highlighting this news, including in the FT, IR Magazine and other UK media.
This debate started in November when the FSA wrote to all asset management firms about conflicts of interest and stated that commissions should only be paid for execution or research and not for corporate access. The result is that the sell-side can no longer be paid by commissions for corporate access, thus threatening their “cash for access” business model. Although it is still too early to tell how this debate will play out, some institutions have already stated they will not pay brokers for corporate access. Others are questioning whether compensated access is fair as some investors end up being excluded.
Phoenix-IR’s position is very clear. As an independent provider of corporate access, free from conflicts of interest, we are not directly affected by this regulatory debate. Quite the contrary, our Reg FD friendly approach means we are able to offer issuers unencumbered access to 100% of the European investor marketplace and investors are able to benefit from this open and fair access, free of charge.
Given the huge sums of money involved in corporate access, it’s not surprising that many interested parties, including the Investment Management Association, have weighed into the debate. We will keep you posted as it evolves.
FSA shakes up corporate access – IR Magazine March 11
Crackdown on cash for access begins – FT March 10
http://www.ft.com/intl/cms/s/0/4ec20e16-87f5-11e2-8e3c-00144feabdc0.html#axzz2NWNYeH10
Fund managers silent over cash for access – FT March 10
http://www.ft.com/intl/cms/s/0/6095c6f8-8743-11e2-9dd7-00144feabdc0.html#axzz2NWNYeH10
UK regulator to crack down on corporate access payments – IR Magazine March 5
Pimp my chief executive – BBC March 5th
http://www.bbc.co.uk/news/business-21668378
FSA to crack down on cash for CEO access – Telegraph March 5
Hedge funds pay $20,000 in ‘cash’ for CEO access – IR Magazine March 4
Fund managers under FSA spotlight over corporate access fees – Guardian March 4
FSA crackdown on cash for CEO access – FT March 4
http://www.ft.com/intl/cms/s/0/084a4bdc-84db-11e2-891d-00144feabdc0.html#axzz2NWNYeH10
Cash for access – Financial regulator should tighten rules on commissions – FT March 4
http://www.ft.com/intl/cms/s/0/ffbf67ce-84c4-11e2-891d-00144feabdc0.html#axzz2NWNYeH10
Why CEO shock at ‘cash for access’ is overstated
http://blogs.ft.com/businessblog/2013/03/why-ceo-shock-at-cash-for-access-is-overstated/
Fears rise over cash for access – FT March 3
http://www.ft.com/intl/cms/s/0/afa48800-81bd-11e2-ae78-00144feabdc0.html#axzz2NWNYeH10
Guy Sears, IMA Director, Institutional, talks to the FT about what the IMA are doing to address conflicts of interest in fund management – FT February 25
http://video.ft.com/v/2187405863001/Confusion-over-dealing-commissions