UK Investment Banks Likely To Miss FSA Deadline On Preventing Conflicts Of Interest

by Robin Pilgrim, LawAndTax-News.com, London

21 June 2004

According to the results of a recent survey, the majority of investment banks in the UK are likely to miss a deadline set by the Financial Services Authority (FSA) for compliance with new conflict of interest rules.

From July 1st, the FSA has stipulated that the banks must put in place policies to prevent conflicts of interest in investment research, and must ensure that their systems and procedures are able to efficiently identify such conflicts if they occur.

In order to ensure compliance with the new rules, reporting and tracking software will need to be put in place by the institutions, and it is this element which is likely to prevent the majority of them from meeting the FSA-imposed deadline, according to Blue Curve.

The software and services provider revealed last week that of the banks questioned, only 11% had a strategy in place and were confident of meeting the deadline. A further 9% revealed that they were not compliant, but said that they were interested in becoming so.

79% of the survey respondents appeared complacent about complying with the new rules and had no intention of putting new procedures in place.

Speaking with regard to the results of the survey, Blue Curve's managing director, Mark Robertson suggested that:

"The complacency we have detected is caused by firms not appreciating the full impact of the new regulations, and so not giving them the priority they require. But the banks face being perilously exposed."

Recommended