Our members, as significant institutional investors and customers of the asset management industry welcome the regulatory focus on the use of the dealing commission regime and we share the conclusions reached by the FCA and set out within this discussion paper.

It is our view that the current arrangements contain inherent conflicts of interest that are not likely to be sufficiently overcome by continued regulatory scrutiny or enhanced transparency to clients. Additionally, we suggest that the current arrangements lead to a number of market inefficiencies, such as the limited coverage of the SME sector and the narrow universe from which a majority of investment research is procured. In turn we consider that a move to full unbundling of research from execution at (initially) a European level is desirable and in the interests of the millions of savers who are reliant upon the investment industry for managing their pension savings

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