Regulator planning action on compulsory commission disclosure
The FSA is set to do a U-turn over disclosure of commission.
Certain forms of commission arrangements, such as volume overriders will also be under the microscope.
The FSA backed off last year from compulsory commisssion disclosure.
But following Spitzer, the FSA will publish a fresh consutation on the issue, said a source close to the regulator.
The FSA first consulted on the issue of commission disclosure in CP160 in December 2002, but ruled that mandatory disclosure was not necessary.
But earlier this year, FSA director of retail firms David Strachan wrote to chief executives warning about the use of inducement payments to intermediaries.
An FSA spokesman said: "We cannot rule out a consultation. We will be looking at how the regime works."
But Biba regulation and compliance manager Steve White played down the possibility of a further consultation.
He said: "The FSA is keen not to be prescriptive as to what the market can and cannot do. Provided the market plays by the rules there is no reason for the FSA to re-visit the issue."
Towergate Partnership group chief executive Andy Homer predicted that volume overriders would "not survive" next year.
He said: "It looks like brokers could be feeding business to a carrier for volume reasons, not because it is in the best interests of the client."
Biba is researching the extent to which volume and profit-share deals are being used by its membership and how they manage them.
Under the FSA's rules brokers must disclose received commission only upon the request of a commercial client. No such rights are extended to retail customers.
Unfair inducements are also banned under the FSA's conduct of business rules, although the regulator does not describe the types of commission arrangement that are to be deemed unfair.