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Platforms push FSA for fund manager payment exemptions

Cofunds and Fidelity FundsNetwork are urging the FSA to allow some payments between fund managers and platforms to continue for specific work wraps carry out on behalf of fund groups.

The FSA’s latest consultation paper, published in June, proposed the banning of all payments between fund managers and platforms from the end of December 2013.

Martin Davis
Martin Davis

Cofunds chief executive Martin Davis says platforms carry out duties for which they deserve to be paid by fund managers.

Davis says: “Things such as client notifications and corporate actions are now carried out by platforms because they have the economies of scale. If we carry out roles that save fund managers time and money then we should be able to be paid for that. It is a point we are making to the FSA and have been doing for over a year.”

Ed-Dymott.jpg
Ed Dymott

Fidelity Worldwide Investment head of business development Ed Dymott says: “We feel that payments for corporate actions, fund listing, manual processing, charges for dealing errors and marketing activity should be allowed.

“We have been in dialogue already with the FSA and I think it recognises the point that is being made.”

Skandia declined to comment on whether it supports Cofunds and FundsNetwork’s stance.

In their responses to the FSA’s latest consultation, the Tax Incentivised Savings Association and AJ Bell said certain payments between fund groups and platforms should be allowed.

The FSA refused to comment on whether it will alter the proposed rules in its policy statement, due to be published by the end of the year.

Nucleus, Standard Life and Transact say they understand the argument but have not raised the issue with the regulator.

Ascentric managing director Hugo Thorman says: “I think the FSA will object to this because it will view it as a way of getting round the current rules.”

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