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Banks' IT is not ready for FSA rules

Nick Huber

Nine in 10 UK investment banks will fail to comply with new conflict of interest regulations because their IT systems cannot capture the required information, according to new research.

Financial Services Authority regulations due to come into force next month require banks to have a policy to govern conflicts of interest in investment research, and ensure that their IT systems can identify any conflicts which may occur. An audit trail of activities related to investment research must also be kept.

However, only 11% of more than 300 London-based investment banks surveyed in May by supplier Blue Curve said they would be able to comply with the regulations by July.

Some 79% of banks were complacent about compliance, saying they had no interest in putting a strategy in place. A further 9% were not yet compliant, but were interested in becoming so.

"Our research shows that the majority of banks will fail to meet the deadline, or are unaware of the true implications of the new rules. The complacency we have detected is caused by firms not appreciating the full impact of the new regulations, and so not giving them the priority they require. Banks face being perilously exposed," said Mark Robertson, managing director of Blue Curve.

More information about FSA rules

www.fsa.gov.uk/regulatory_reporting


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