UK

The FSA’s Proposed Response to Conflicts of Interest in Relation to Investment Research and Issues of Securities

David Capps, Wilmer, Cutler & Pickering. david.capps@wilmer.com

Background and Executive Summary

Following the high profile investigations and corporate failures in the United States, the UK’s Financial Services Authority (the “FSA”) issued a discussion paper in July 2002 in which they discussed the nature of investment research, the conflicts of interest that could undermine its objectivity and how that might be addressed. The FSA invited responses from the industry. Separately, the FSA has also examined whether “laddering” and “spinning” in connection with the issue of securities are a feature of the UK market. The FSA has now issued its Consultation Paper 171, Conflicts of Interest: Investment Research and Issues of Securities, in which they set out their detailed proposals on both of those issues.