FSA to crack down on use of investor cash for CEO access - FT

Tue Mar 5, 2013 12:37am GMT

A man is seen behind the entrance door of the offices of the Financial Services Authority (FSA) in Canary Wharf, London, November 19, 2010. REUTERS/Simon Newman

A man is seen behind the entrance door of the offices of the Financial Services Authority (FSA) in Canary Wharf, London, November 19, 2010.

Credit: Reuters/Simon Newman

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(Reuters) - Britain's Financial Services Authority is set to go after asset managers using investors' money to pay for access to chief executives, the Financial Times reported on Monday.

The FSA's head of asset management, Ed Harley, raised the possibility that asset managers found to be in breach of its rules would have to pay multimillion-pound fines, the Financial Times said on its website.

Harley said an analysis by the FSA of the use of client commissions by 15 asset managers revealed large payments that were hard to justify, with the bulk of them going towards corporate access, the financial daily said.

Harley said the rules were clear that client commissions could only be used for trade execution and research, the FT reported.

Harley's comments follow a Financial Times report on Sunday that said investment banks are charging asset managers up to $20,000 an hour to meet the CEOs of their corporate clients.

An FSA spokesman said he could not immediately add to Harley's comments to the FT.

(Reporting by Abhishek Takle in Bangalore)

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