British watchdog says will probe investment bank sector
The Office of Fair Trading, the British watchdog, on Thursday said it would investigate fees and services in the investment banking sector after users expressed their "dissatisfaction" with them.
The regulator plans to probe the equity underwriting market, where companies seek to raise funds through the sale of new shares.
"The OFT today announced plans to undertake a market study into equity underwriting and associated services, and sought views on its scope," it said in a statement.
Companies raised about 70 billion pounds (102 billion dollars, 85 billion euros) equity capital in Britain last year and paid an estimated 2.0 billion pounds in fees for underwriting and other services, according to the watchdog.
"Initial discussions have confirmed that there is some dissatisfaction with these services among corporate users of the market," the OFT added.
"The OFT proposes that the market study should take a focused look at rights issues and other types of equity-raising by the 350 largest UK public companies, to consider whether users' concerns are justified."
The investigation, which will start in the summer, will focus on the level of competition for underwriting work and how the process is carried out.
© 2010 AFP