The FCA has confirmed platform cash rebates on legacy business can continue indefinitely.
The move was confirmed in the regulator’s quarterly consultation paper. Money Marketing revealed in July the FCA was consulting on draft guidance regarding the treatment of cash rebates for legacy business following industry queries in the wake of the platform policy statement.
A note sent to trade bodies at the time confirmed the FCA had a number of industry queries regarding legacy cash rebates.
The FCA has now set out circumstances where cash rebates will be allowed to continue and given specific examples.
The examples include where a client’s investment or regular contributions to an investment are reduced and where a product is re-registered between platforms but not otherwise changed.
The regulator’s platform policy statement, published in April, confirmed a ban on cash rebates above £1 on new business from April 2014 while unit rebates were allowed to continue but with a tax charge applied.
It also banned all legacy payments between fund managers and platforms from April 2016 but did not stipulate whether it would ban cash rebates to clients on legacy business.
Today’s consultation provides a table of cases where legacy cash rebates are allowed to continue. Responses are due by 6 November.
Where legacy cash rebates can continue: Click on table to view larger image