The Bank of New York has responded positively to proposals from the Financial Services Authority (FSA), the UK regulator, to tackle softing and unbundling (in its discussion paper, CP176) by limiting the scope for softing and bundling to execution services and investment research. The response is not surprising, given that Bank of New York is both an execution-only broker and a re-packager of independent research.
“We have always believed that soft commissions are the ideal mechanism for the payment of independent research, the use of which leads to a more transparent investment process,” says Gareth Jones, managing director, BNY Securities Group, The Bank of New York. “We are encouraged that the FSA is looking to the industry to develop a transparent mechanism for identifying the actual price of investment research. We welcome the FSA’s proposals and believe that our model, which offers execution-only brokerage and best-of-breed independent research, will become the industry blueprint between now and December.”