Sponsors play a very important role in maintaining the integrity and high standards of governance associated with the UK market. In order that the trust and confidence of investors is maintained the competence of the sponsor is vital; furthermore however, it is equally important that any conflicts of interest – real or perceived – faced by sponsors are transparently disclosed and appropriately managed.

In reaching a view as to what is a pertinent conflict, it is crucial that the FCA defines clearly to whom sponsors owe their primary interest. It is the view of our members, that despite the (often opaque) commercial relationship being between issuer and sponsor, the ultimate consumer of the service provided in this case is demonstrably the investor and to a lesser extent also the regulator itself.

In looking at the sponsor regime through the lens of the investor consumer, we would encourage the FCA to give consideration to whether the ultimate consumers are currently being appropriately served by the present arrangements.

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