The Investment Management Association responded to the FSA’s discussion paper about transparency Friday, counseling that the benefits of more disclosure must be weighed carefully.
An IMA release warned against “publishing for publishing’s sake,” and said transparency measures aimed at providing clients with better and more accurate information could have unintended consequences.
“In principle, transparency can serve a purpose; certainly IMA will support measures that better inform clients. But publishing large amounts of data is not the same as informing clients about the choices they need to make,” said Guy Sears, wholesale director at IMA. “We would urge the FSA to undertake further analysis as the research in the Discussion Paper itself highlights that disclosure rarely achieves what is intended.”
The Financial Services Authority released “Transparency as a Regulatory Tool” in May, and invited interested parties to submit reactions by the end of August. FSA officials described the paper as the beginning of an “open debate” about what information could or should be made public.
“The discussion paper seeks to initiate debate on how we can better utilise transparency to achieve our regulatory aims, and in particular proposes a code of practice,” said Hector Sants, FSA chief executive.
Among the information proposed to be public are firm-specific complaints data and details on the use of firm’s supervisory powers.
Read the full reaction by IMA <a here. Check out the FSA paper here.