Choice, transparency and M&A: FCA outlines terms for investment banking probe

Emma Haslett
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The investigation will build on a wholesale sector review published in February (Source: Getty)

The Financial Conduct Authority (FCA) says it will focus on wide-ranging subjects when it launches a study into the investment and corporate banking market.

In a statement today, the FCA said its investigation, which will build on a wholesale sector competition review published in February, will look at "choice, transparency, bundling and cross-subsidisation in debt and equity capital markets", as well as mergers and acquisitions and acquisition financing.

It will also look at the links between those primary market services and related activities, such as corporate lending and broking, and ancillary services.

Of those, four areas will be of particular interest: firstly, transparency, with a look at "the transparency of the process in debt and equity issues and the impact of established market practice and regulation on transparency in the IPO process".

The study will also assess client choice and behaviour and the impact of syndication, whether and how bundling and cross-subsidisation affects the competition; and finally the potential benefits of reducing regulatory barriers to firms entering or expanding into primary markets.

"We want to see a sector that benefits the real economy by helping businesses of all sizes access capital," said Christopher Woolard, the FCA's director of strategy and competition.

"That means offering real choice, transparency and good service at every level. It is also essential that the regulatory framework encourages competition, and we will engage with banks, advisers, clients and investors throughout the review to assess which aspects of the market work well, and identify areas for improvement."

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