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FSA expects sharp drop in Ucis distributors

FSA Financial Services Authority 480

The FSA says up to 3,000 firms are involved in the promotion of Ucis to retail customers, a figure it expects will fall to as low as 250 firms as a result of its latest proposals.

The FSA today published its review of Ucis rules, which calls for a ban on the promotion of Ucis and similar products to the vast majority of retail investors in the UK, as revealed by Money Marketing. The FSA is consulting on the ban.

The regulator estimates that between 1,000 and 3,000 distributors are involved in the promotion of all types of non-mainstream pooled investments to retail customers.

It expects its proposals will reduce the number of distributors promoting these investments to between 250 and 750 firms.

Distributor firms are likely to bear the majority of costs for the new regulations, which could cost up to £33m, through increased compliance costs, amendments to product literature and client categorisation.

The FSA estimates client categorisation will result in one-off costs of between £3m and £9m, with ongoing costs of between £130,000 and £170,000 per year.

Amending product literature will cost £10m, while additional training will cost between £4.5m and £13.5m.

Ongoing annual costs for compliance are expected to be between £480,000 and £795,000.

The regulator says it will need to further increase its resources in the short-to-medium term, as the scope of supervision widens to all non-mainstream pooled investments.

Currently, the FSA spends £400,000 on “addressing problems” in the Ucis market.


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  1. They also said that there was round about 20 million sophisticated clients in UCIS since 2011 on their consultation paper 3 months before RDR comes into place nothing like rushing things through hey? if you ask me them figures are completely wrong, as I’m sure there’s more than that alone in the Connaught Income Fund not to mention all the sophisticated clients in EEA and I’m sure between both product there’s about over 50 million who have been signed off as sophisticated clients.

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