Following a thematic review (the Review) conducted in the second half of 2011, the FSA has now published a Paper on conflicts of interest between asset managers and their customers.

The finding of the Review revealed that many firms had not established adequate frameworks for identifying and managing conflicts of interest and that, consequently a number of the FSA's rules governing the use of customers' commissions and fair allocation of trades between customers had been breached.

The Paper summarises the key findings of the Review and discusses how firms should identify and control conflicts of interest that may arise. It also deals with how firms should manage a number of other matters, including: gifts and entertainment; ensuring that customers have equal access to all suitable investment opportunities; and managing the purchase of research and trade execution services on behalf of customers.

Owing to the serious nature of the issues identified in the Review, the FSA will now require the CEO of each asset management firm to complete and return an attestation. This will confirm that the board has considered the FSA's Paper and resolved that the firm's arrangements are sufficient to ensure that the firm manages conflicts of interest effectively and in accordance with the FSA's rules. The text of the attestation is attached to the Paper. It must be completed and return to the FSA by 28 February 2013.