2015年-FCA英国金融行为监管局_ms15_1_1_24页_602kb

Investment and Corporate Banking Market Study Summary

Core Content

The Financial Conduct Authority (FCA) launched an investment and corporate banking market study in May 2015, following a wholesale sector competition review conducted in February 2015. The study aims to evaluate whether competition in these sectors is functioning effectively and to identify potential issues that may affect smaller clients more than larger ones.

The study will examine three key topics:

• Choice of banks and advisers
• Limited transparency
• Bundling and cross-subsidisation

These topics are chosen based on concerns raised by stakeholders, including limited client choice, lack of transparency in service provision, and practices that may restrict competition.

Main Topics and Key Points

1. Choice of banks and advisers

• The FCA will assess the competitive landscape for investment and corporate banking services, particularly whether smaller clients are less well served.
• It will examine clients' purchasing behavior, especially the role of syndication in limiting choice and how this affects market dynamics.
• Entry and expansion for new entrants, including potential barriers from regulation and existing practices, will be analyzed.

2. Limited transparency

• The adequacy of information for clients to evaluate service value will be explored, with a focus on smaller clients who may have less internal expertise.
• Transparency in the allocation process will be considered, including whether banks favor certain investors.
• The impact of existing practices and regulations on transparency in the IPO process, particularly the timing of connected research, will be reviewed.

3. Bundling and cross-subsidisation

• The FCA will investigate whether bundling of services and cross-subsidisation between primary and related activities are occurring.
• It will assess the adverse effects of these practices on competition and clients, including potential barriers to entry and the risk of clients being "locked in."

Wider Context

The market study is conducted in parallel with other initiatives:

• Fair and Effective Markets Review (FEMR): Aimed at restoring confidence in FICC markets and influencing international trading practices.
• Capital Markets Union (CMU): Aims to create a more integrated and efficient capital market in the EU, which could impact UK markets.
• MiFID II: A European regulation that will apply from 3 January 2017 and may address some of the concerns raised in this study.

Benefits of Effective Competition

• Direct benefits include cost reductions and better service quality for corporate issuers and investors.
• Indirect benefits may include lower costs for retail customers and improved capital flow, which supports economic growth.
• Investment and corporate banks play a key role in facilitating capital flow, so improvements in their efficiency can benefit the entire economy.

Powers and Procedures

• The FCA will use its FSMA powers to conduct the study, rather than the Enterprise Act 2002.
• It will focus on regulated activities and related non-regulated activities, as well as how they interact.
• The procedures include:
  • Gathering data and views from stakeholders
  • Hosting roundtable and bilateral meetings
  • Publishing an interim report around the turn of the year
  • Publishing a final report in spring 2016

The FCA may take market-wide or firm-specific actions if competition is found to be ineffective, including rule changes, guidance, self-regulation, penalties, or referrals to the Competition and Markets Authority (CMA).

Scope of the Study

Activities in Focus

• Primary market activities include:

  • Equity Capital Markets (ECM) and Debt Capital Markets (DCM)
  • Mergers and Acquisitions (M&A) services
  • Capital raising advisory and underwriting
  • Corporate advisory for M&A and capital raising

• Related activities include:

  • Corporate broking and lending
  • Ancillary services such as foreign exchange contracts and interest rate hedging

Geographic Scope

• The study will cover investment and corporate banking services provided in the UK, regardless of the client's location or the legal entity in which the activity is booked.
• It includes services from the UK to both UK and non-UK clients or for UK and non-UK transactions.

Key Information

• The study is not a formal consultation, but the FCA welcomes comments by 22 June 2015.
• The final report is expected in spring 2016, with an interim report published around the turn of the year.
• The FCA will consider the impact of regulatory changes, such as MiFID II, on competition and may investigate secondary market activities if they are found to affect primary market competition.

Conclusion

The market study is designed to assess the effectiveness of competition in the investment and corporate banking sector, with a particular focus on primary market activities and their related services. It aims to identify potential issues that may hinder competition and to explore ways to promote it, while taking into account ongoing regulatory and market developments. The FCA will use a range of tools, including rule-making, guidance, and enforcement actions, to address any identified concerns.