Britain’s banks face a ban on restrictive contract clauses and misuse of league tables in pitches to clients, in an attempt by the U.K.’s financial regulator to shake-up competition in investment and corporate banking.
Bloomberg News reports that in a final report published by the U.K. Financial Conduct Authority Tuesday, the agency said improvements must be made by banks in primary capital market services to better serve smaller clients. The regulator proposed banning contract clauses that restrict clients’ choices over what firms they can use and removing incentives for banks to leverage loss-making trades to climb league tables that are then used to win clients.
The FCA started a review of competition in investment and corporate banking in February 2015 following a wider look at competition in the wholesale financial sector. The regulator was concerned a lack of transparency was making it difficult for clients to know if they were getting good value and was also preventing smaller firms from competing for services. Many of the watchdog’s conclusions Tuesday are similar to those published in its interim report in April.
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