Daily Insurance Industry News
Daily Insurance Industry News
Wednesday 22nd of May 2019
August 1, 2011

FSA announces new rules on platforms

by Gill Montia

Story link: FSA announces new rules on platforms

The Financial Services Authority (FSA) has published rules on platforms regulation in the light of Retail Distribution Review (RDR) objectives.

In brief, the rules 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.

Platforms and other nominees to pass on fund information to the end investor.

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.

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.

Nominees to respond to information requests by authorised fund managers for liquidity purposes.

The new regime also extends the application of 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.

Finally, 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 regulator has concluded that further research is needed.


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