View more on these topics

FCA consults on allowing legacy cash rebates to continue


The FCA is to consult on draft guidance regarding the treatment of cash rebates for legacy business following industry queries in the wake of the regulator’s platform policy statement.

A note sent to trade bodies today confirms the draft guidance, due in September, will set out the regulator’s intention to allow cash rebates to continue on legacy business “indefinitely” where there is no change made to the investment after the ban on cash rebates for new business comes into force in April 2014.

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.

The note says: “In view of the queries we have received, we have concluded that it would be helpful to add guidance on the treatment of legacy business in relation to cash rebates to retail clients, and intend to consult on draft guidance in the September Quarterly Consultation Paper (which will be published in early September).

“The new guidance will set out in more detail our policy intention, which is that cash rebates to retail clients on legacy business can continue indefinitely, unless a change to the legacy investment on or after 6 April 2014  (such as a fund switch involving the sale of all or part of the investment and purchase of different funds) requires the investment or part of the investment to be placed in funds which do not allow for cash rebates (other than those permitted by COBS 6.1E.10R(2) and COBS 6.1E.11G).”


News and expert analysis straight to your inbox

Sign up


There are 3 comments at the moment, we would love to hear your opinion too.

  1. Makes sense and keeps things nice and simple without having lots of different regimes and the need for multiple systems operating different criteria for different clients and their different holdings. Should be easy to track and maintain compliance.

    Intelligent, top quality regulation at its best.

  2. @Grey Area


  3. Oh but if only the regulators would run their business as efficiently as we do ours then at least we would know if we were batting and bowling!

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm