Platforms playing down rebate rules
Platforms have been accused of playing down the fact that they are already required to disclose full details of rebates under Mifid rules.
The Mifid rule on inducements states that a firm must not accept any fee or commission in relation to designated investment business unless it is “clearly disclosed to the client in a manner that is comprehensive, accurate and understandable, before the provision of the service.”
Platforms have to comply with this rule and disclose the rebates they receive but only on request. But Novia says, in reality, platforms are not doing enough to let clients know that rebate information is available.
CEO Bill Vasilieff says: “My impression is that although the regulations say that rebates have to be provided if reques-ted, people are not aware of this and, for their own reasons, some platforms play it down and do not make clients aware.”
He says the same platforms that are trying to hide rebates are also guilty of blocking re-registration between platforms.
He adds: “Some platforms still try to hide the rebates when they are legally obliged to disclose them. This behaviour is nothing to do with benefiting the inv-estor - it is all about their own commercial interests and it flies in the face of transparency.”
But a spokesman for Skandia says: “We know what the Mifid requirements are and we conform to those by disclosing rebate information to customers that ask. I do not see how that is playing it down. The reality is that we have had very few requests for the information from customers which is indicative of how unimportant it is to them.”