UK - The Alternative Investment Management Association (AIMA) has asked the Financial Services Authority (FSA) for clarification on part of its proposed rules on bundled brokerage and soft commission arrangements in the UK.
In a second submission to the FSA, AIMA asks for guidance on whether pricing data and systems may come within the permitted parameters for “execution and research”, as essential and core services for managers.
The FSA is not allowing the exemption of hedge fund managers from the general disclosure obligation. The global hedge fund and alternative investment industry association supports the FSA’s intention to allow flexibility on disclosure requirements but asks for guidance on the areas of market pricing and price feeds.
AIMA also argues that goods and services should be viewed as a whole when assessing whether they are permitted, so that managers are not required to divide the elements and costs within a “package”.
“The consultation currently states that investment managers should determine whether market pricing services and price feeds are permitted within the principles proposed to determine whether they may be classified as research or execution,” Mary Richardson, associate director, regulatory and legal, wrote in the submission.
“Our members would appreciate additional clarity regarding: whether there is scope for assessment of these systems against COB 7.18.4E (“execution”), where the information assists managers in achieving best execution requirements and; whether there may be certain systems that could potentially be assessed and concluded as reaching meaningful conclusions such that they may be permitted under COB 7.18.5E (“research”).”
In March the FSA issued further consultation on the proposed rules, which come into effect on January 1, 2006 with a six month transition period.
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