View more on these topics

Government proposes client asset regulator

The Government has proposed the creation of the Client Asset Agency, a regulator to take responsibility for clients’ monies within FSA regulated firms.

In its latest consultation paper looking at potential resolution arrangements for investment banks, the Treasury proposes the creation of the CAA to take over some responsibility from the FSA for the regulation and ongoing supervision of systems and controls relating to client money and assets within FSA authorised firms.

An asset regulator would also play a role post-insolvency to improve mechanisms that would make the compensation process more efficient.

The Treasury says those firms that hold client money would pay for the agency. It says an independent ‘client money and assets levy’ could even be added to the FSA fee block structure.

The paper also proposes that all investment firms introduce of an explicit requirement that counter parties offer facilities for their members to segregate client business into separate, ring-fenced accounts. It says clients could be made aware of the net margining benefits of unsegregated accounts, but the banks would also have to highlight the risks of placing money within the bank without a ringfence.

The paper says this would cost investment firms between £3m and £6m to implement, with additional costs of £3m a year.

The paper also proposes the creation of Business Information Packs, or ‘living wills’, which would help administrators glean the relevant information that would support and orderly wind-down of the failed firm. It says a BIP would also allow the authorities to better understand the risks to client funds and to be better prepared in communicating with the market when an investment firm fails.

Financial Services Secretary Lord Myners says: “The collapse of Lehman Brothers last October had a major impact on financial centres across the world. It is important that the Government acts to ensure that any future failure of an investment bank does not cause the same degree of damage to markets or investors.

“Today’s proposals are about enhancing the UK’s reputation as the world’s premier destination for investment banking services.”



New buyer may sell off James Hay wrap

IPS Partnership owner IFG Group could sell the James Hay wrap after it takes over the firm in February in a deal worth £35m. The Sipp specialist revealed last week that it is set to buy the firm from Santander. IFG is proposing to raise £45.3m from shareholders. IPS, which has 8,000 Sipp clients and […]

RDR put squeeze on learning and earning

For IFAs, the dominant issue of 2009 was the retail distribution review. June saw the publication of the FSA’s updated version of the future of regulation post-2012. A central concern was the labelling of the different avenues of advice and sales of financial products. The RDR outlined plans for independent, restricted and simplified advisers but […]

Life cover for life

When someone mentions whole of life plans, most people will think of a niche product that serves as an inheritance tax planning tool for high-net-worth clients. And it’s really not surprising they’ve been pigeonholed in that waybecause before the arrival of RDR in 2013, that’s more or less exactly what they were. For advisers thinking […]


News and expert analysis straight to your inbox

Sign up


    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