FCA Investigating Competition in Wholesale Banking, Investment Sector

UK watchdog the Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) announced today that it is launching its first wholesale market study into investment and corporate banking to determine whether competition in the sector is working properly.

The FCA has determined it worthwhile following the publication of its review into competition in the sector. Their review covered markets, their infrastructures, asset managements and corporate and investment banking.

It found that limited clarity over price and quality of services may make it difficult for clients to assess whether they are getting value for their money. The review also pointed out that the bundling and cross-selling of services could make it difficult for new entrants or smaller, already established firms to challenge large established players in the wholesale market.

Director of Strategy and Competition Christopher Woolard said, “We have chosen this particular area because the benefits of effective competition in the market could be significant. The UK is a global Hub Hub A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method Read this Term for investment banking, and this sector plays a crucial role in our economy, helping companies raise capital for investment, expansion and funding ongoing operations.”

He goes on to say, “What was clear from the discussions we had with stakeholders and firms was that there are unanswered questions about potential conflicts of interest and value for money in this market. This will form part of our wider work in the wholesale markets, alongside the Fair and Effective Markets Review.”

Feedback it has received to date includes concerns around transparency, conflicts of interest and bundled services’ impact on competition. During the wholesale sector review the FCA met with roughly 70 organizations and individuals via round-table discussions and one-on-one meetings.

The FCA will also consider undertaking a market study into asset management and related services later this year. For other potential competition issues, there are no immediate plans to conduct further studies into these areas as forthcoming regulations are expected to change the way competition works.

The FCA has had its hands full lately, trying to contain the blowback from the Swiss franc turmoil. The FCA was set up as part of Britain’s post-financial crisis restructuring efforts to better supervise and protect consumers and to increase market competition.