On April 13, 2016, the Financial Conduct Authority published its interim report on the investment and corporate banking market study, which includes proposed remedies to the deficiencies identified. The FCA proposals include removing the practice of banks using contractual clauses to restrict client choice, reducing barriers to entry for nonuniversal banks without undermining the efficiency benefits of cross-selling and improving the credibility of league tables for investment and corporate banking. The FCA also intends to investigate further whether individual banks whether there are any issues in conflicts management in the allocation of Initial Public Offerings.
The FCA also published a discussion paper on the availability of information in the Initial Public Offer process for UK equities. The FCA’s view is that diverse and independent information is not available early enough in the IPO process. To address this issue, the FCA is proposing to amend the order in which the approved prospectus and connected research is made available to investors and to ensure that analysts from firms not supporting the IPO are provided with access to the issuer’s management.
The FCA requests views on the interim report and proposed remedies by May 25, 2016. The final report is expected in Q2 or Q3 this year, and will be accompanied by a consultation on any further steps the FCA proposes to take. Responses to the discussion paper are due by July 13, 2016. The FCA will publish feedback once it has analyzed responses and consult further if it decides that policy action is required.
The interim report is available at: http://www.fca.org.uk/news/investment-and-corporate-banking-market-study
The discussion paper is available at: http://www.fca.org.uk/static/documents/discussion-papers/dp16-3.pdf.