FCA publishes final report on corporate and investment banking

The FCA has published the final findings from its thematic review into corporate and investment banking. The study was designed to foster competition in the industry and has concluded that whilst many clients are well served by the sector, there are some areas where improvements could be made, especially for smaller clients.

The report outlines a package of remedies, including banning banks from using contractual clauses that seek to limit clients’ choice on future transactions.

Its specific proposals are:

  • to ban restrictive contractual clauses that prevent clients’ choices in future transactions. FCA thinks a ban is necessary, although respondents to its survey, while agreeing with the principle of the ban, said the practice was not prevalent anyway;
  • to stop banks presenting league tables to clients in a way that inflates their own position;
  • to remove incentives for banks to carry out loss-making trades for the purpose of improving their position in league tables;
  • to address how some banks currently skew their allocation practices to favour the buy side; and
  • how to address the problems caused by the current blackout period in the IPO process between syndicate banks publishing connected research and the availability of the pathfinder prospectus.

FCA has asked for comment on its proposals by 16 December.

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