The FSA has delayed the implementation of rule changes for platforms amid concerns over the tax treatment of rebates.
In June, the FSA confirmed its intention to ban cash rebates and payments between fund managers and platforms but said unit rebates will be allowed to continue.
Responses to the consultation from the platform industry have raised queries about the tax treatment of unit rebates which have now been passed to HMRC for closer scrutiny.
In its response to the last consultation paper, Transact managing director Ian Taylor said allowing unit rebates would create a tax problem because the acquisition of units is classed as an investment and therefore a tax event, whereas the receipt of a cash rebate is not.
Taylor said as a result clients would have many small tax events within their account, creating more complexity and more work for HMRC.
Transact head of marketing Malcolm Murray says: “We welcome the fact that the FSA has decided to put back publishing the rules to consider the issues raised.”
The regulator had intended to publish final rules by the end of the year but now says the changes will not be confirmed until 2013. It will give platforms 12 months to make the required changes.
An FSA spokeswoman says: “Consultation paper responses raised a variety of questions, including the tax treatment of rebates and payments to platforms. We are taking the points raised into account and we understand that HMRC is working on clarifying the tax position.”
International Financial Data Services group executive David Moffatt says: “The FSA probably has a few other platform issues which are still causing some concern, for example, whether some payments between fund managers and platforms should be allowed and whether to allow a ‘de minimis’ level of cash rebate.”