SEC Watches U.K. Regulator's Unbundling Efforts

Wall Street awaits as fund managers in the United Kingdom prepare for a deadline that will require them to disclose what portion of fees go to research, and which portion goes to trading costs, according to Dow Jones.

The Financial Services Authority, the U.K.'s regulatory agency, adopted disclosure rules calling for British fund managers to comply by June 30. 

Stateside, the Securities and Exchange Commission has been mulling over how to handle soft dollars. How the rules pan out across the pond may affect how U.S. regulators proceed.

"It's going to affect our market because U.S. clients of U.K. investors who are getting this disclosure may ask their U.S. advisors for similar disclosure," said Robert Plaze, associate director of the investment management division for the SEC. "We're interested to see how that develops."

This so-called "unbundling" of research fees paid and trading costs that come from shareholder commission fees has been a hotly contested issue in recent years, both in the U.S. and the U.K., although it is not mandated in either place.

Meanwhile, some institutional investors have come to separate agreements to pay for research from their own reserves, thereby lowering fees to their shareholders. For example, Fidelity struck such agreements last year with Lehman Brothers and Deutche Bank Securities. 

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.