FSA to act over fund managers' conflicts of interest The regulator said it uncovered a series of rule breaches during visits to 15 unnamed London firms between June 2011 and February 2012. It had already taken enforcement action against one firm "which traded for one fund to ease the liquidity problems faced by another fund," and was considering action against other firms. It had asked chief executives to make declarations of their firms" abilities to manage conflicts of interest. Many firms had no "adequate framework" for managing conflicts of interests and had broken rules over the use of commission payments. "Most of the firms visited could not demonstrate that customers avoid inappropriate costs and have fair access to all suitable investment opportunities," the FSA said. Some did "not allocate trades between different clients in an equitable manner," with one firm allowing senior fund managers to delay allocating trades for several hours after execution, which meant they could favour some customers over others. Some firms could "not show that cross trading between customers was always in the interests of both customers." Firms also lacked adequate policies on the acceptance of gifts and entertainment that "would give rise to actual or perceived conflicts of interest." The FSA found examples of staff accepting entertainment that "if fully disclosed to the firms" customers, might have caused concern about the objectivity of decisions taken on their behalf." Daniel Godfrey, chief executive-designate of the Investment Management Association said: "The FSA has clearly identified important issues of concern."