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FSA publishes latest Capital Markets Bulletin
The FSA has published issue 3 of its Capital Markets Bulletin which focuses on the thematic review of the management of conflicts of interest within private equity firms. The main objective of the thematic review is to analyse the key conflicts of interest arising between private equity firms and the underlying investors in the funds that they operate, manage and provide investment advice to.
• Good practice – the bulletin includes some non-exhaustive examples of good practice identified, such as regular formal compliance reviews, proactive disclosure on a deal-by-deal basis of actual conflicts issues to all fund investors, and the use of “Chinese wall” letters on specific deals to remind staff of personal responsibilities and information confidentiality.
• Further steps by firms - the FSA has indicated that private equity firms may wish to undertake a benchmarking exercise against the findings of the review. This would enable them to identify the gaps between their current practice and good practice within the industry.
• Next steps - The FSA’s supervisory team will continue to focus on conflict management as part of the FSA’s formal risk assessment process and ongoing interaction with private equity firms.
View A copy of the bulletin 17-Jul-2008
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