Managing Conflicts of Interest

In its Policy Statement 04/6 (published on 22 March 2004), the FSA has set out the regulatory provisions by which it intends to ensure that senior managers within regulated firms will manage conflicts of interest arising as a result of the production of investment research. The provisions will come into force on 1 July 2004, but firms will need to take preparatory steps before that date in order to ensure that their systems, controls and procedures are compliant.

The provisions which are to be introduced remain largely unchanged since they were first published in draft form as an annexure to the FSA's consultation paper CP205 in October 2003. They are contained in a new conduct of business rule (COB 7.16) and include at their core new COB 7.16.5R whereby a firm which publishes or distributes investment research (which research is held out and/or relied upon as an impartial assessment of the value or prospects of its subject matter) must establish, implement and make