FCA rules on fund dealing commissions

Michael Bow
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THE CITY watchdog yesterday moved to stamp out the practice of fund managers paying dealing commissions to brokers for access to corporate executives.

The Financial Conduct Authority (FCA) issued a new policy stipulating that commissions, which are worth about £3bn every year, should only be spent on corporate research from brokers rather than for setting up meetings with executives.

“Investors should be confident that dealing commission is only used to buy execution or research services that deliver real value,” FCA boss Martin Wheatley said.

Some had argued it would be hard to pinpoint the cash spent on research as opposed to access, given brokers often bundle the services.