IMA is consulting on the use of dealing commission to pay for corporate access. FSA pointed out in its November 2012 Dear CEO letter on “Conflicts of interest between asset managers and their customers” that firms subject to thematic review had been unable to show how corporate access constituted research or execution services, which can be paid for with brokers’ dealing commission. IMA stresses that achieving good outcomes from equity over the long run requires direct corporate engagement, of the sort brokers facilitate. It explains the industry feels FSA is taking a new, narrower approach, as supervisory reviews so far had not challenged bundling corporate access with the dealing commission. It asks for clarity on whether the fact that information provided in an arranged meeting enabled a portfolio manager to reach meaningful conclusions for itself would be sufficient for the meeting to qualify as research. IMA suggests a way to comply with FSA’s new approach. Asset managers should enquire about the capacity in which the broker is acting and negotiate as competitive commission rates as possible. Only where the asset manager asks the broker to provide a more bespoke service and input would this engagement be a permitted research service. During 2013 IMA will also propose changes to address the broader issue of barriers to engagement put up by issuers and their corporate advisers. (Source: Use of Dealing Commission: Corporate Access/Research Services)