The UK’s Financial Services Authority is proposing that retail investors should have a representative to assess money managers’ disclosures about their use of soft dollars and bundled brokerage commissions.
The enhanced disclosure regime for bundled brokerage and soft commissions is being introduced January 1 2006. The objective of the FSA’s new regime is to ensure that investment managers achieve value for any expenditure that is charged through to their customer’s portfolios. It aims to encourage this through increased transparency and accountability by disclosing this expenditure to clients, thereby subjecting the manager to competitive pressure to ensure clients receive best value, the FSA reports.
In a consultation paper published today, the FSA is proposing that an individual or body should act as a representative of retail investors who will consider the new disclosures on investors’ behalf and interact with the manager where necessary.
It says it is proposing this as a means of dealing with the fact that the majority of retail investors will have little interest in receiving detailed information about soft dollars as it would be largely meaningless to them or they have limited means of influencing the investment manager’s behaviour if they are unhappy with it.
The closing date for submissions to the consultation paper is Jan. 6, 2006.
UK regulator proposes enhanced disclosure for soft dollar commission
Retail investors should have a representative, FSA says
- By: James Langton
- September 30, 2005 September 30, 2005
- 09:10