Articles - FSA publishes new rules for platforms

The Financial Services Authority (FSA) has today published rules on platforms regulation.

 This follows a review of the regulation of platforms in the context of the objectives of the Retail Distribution Review (RDR).

 The rules published today extend the consumer protection elements of the RDR into a rapidly developing area of investment services. These new rules have two key aims; firstly, to ensure that consumers receive a better service and, secondly, for the market to be more transparent and operate more efficiently.

 The key rules designed to provide better service for consumers:

  •   require platforms and other nominee companies to transfer, within a reasonable time and in an efficient manner, assets held on behalf of customers to another person, when requested; and
  •   require platforms and other nominees to pass on fund information to the end investor.

 To enable greater transparency and efficiency in the market, the rules:

  •   require investment adviser firms using a platform service for the purposes of making a personal recommendation, or arranging the purchase of retail investment products for retail clients, to take reasonable steps to ensure that they use platforms services that present their retail investment products without bias;
  •   require platforms to disclose to professional and retail clients any fees or commission they arrange to accept from third parties in relation to retail investment products. These should be disclosed in advance of the platform providing services to those clients;
  •   extend the application of the RDR rules on facilitating payment of adviser charges to facilitation through platforms - for instance, if a platform has client cash accounts, it could enable payments of adviser charges out of such accounts; and
  •   require nominees to respond to information requests by authorised fund managers for liquidity purposes.

 In respect of incentives, the FSA has decided that it would be desirable, in principle, to ban both cash rebates from product providers to investors and product provider payments to platforms. However, given the potential impact of these changes on the business models of platform service providers, the FSA has concluded that further research is needed to ensure that the implications for consumers are fully understood before proposing new rules.

 Sheila Nicoll, the FSA's director of conduct policy, said:

 "The rules published today are designed to enable consumers to understand the services they are being offered by investment firms, and what they are paying for.

 "With more and more business being conducted through platforms, it is important that customers are clear who is charging for what, and for what service. It is also important that customers and their advisers can move their investments quickly and easily, particularly if they are dissatisfied with the service they receive.

 "We also believe that it is likely to be in the best interests of consumers that product providers' payments to platforms and cash rebates from product providers to investors should be banned. But we need to analyse the impact on consumers and on firms' business models before we propose any new rules."

Back to Index

Similar News to this Story

COP28 may be do or die for one point five degree aspirations
With the UN’s annual climate conference kicking off today in Dubai, Ritchie Thomson, senior responsible investment associate at Aegon Asset Management
Oblivian Coalmine on pension funds fossil fuel industry ties
This new film from Make My Money Matter, starring the Academy Award winner Olivia Colman, highlights that £88 billion of UK pension savers money is in
Hopes and fears for pensions in 2024
Aon has set out its “hopes and fears” for pensions in 2024. After a year in which UK pension schemes digested the events of 2022 and adjusted themselv

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS


Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.