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PIMS: Firms say FSA is unsure over role of platforms

Axa and Seven Investment Management say the FSA is confused over whether platforms are service providers or product providers.

Speaking at the PIMS conference yesterday, Axa managing director of UK distributors David Thompson said the regulator seems to be undecided about what kind of businesses platforms operate.

Thompson said: “It seems like the FSA cannot quite get its head round whether platforms are providing a service or if they are actually products, which may be slowing down the process of producing final rules for the way platforms should work.”

The FSA has yet to publish its consultation paper into platforms. Last August, it published its platform policy statement which stated it was “desirable” to ban both cash rebates and payments between product providers and platforms. It delayed implementing any new rules to consult again on any changes and will publish a further consultation paper.

Also speaking at PIMS, Seven Investment Management chief executive Tom Sheridan said: “I think the regulator is still trying to understand exactly what it is that platforms provide.”

Money Marketing revealed last week that the FSA’s investment policy team will recommend to the regulator’s board in July that any implementation of client fund information rules be delayed by 12 months. The rules were initially planned to come into force on January 1.



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

  1. One assumes that all platforms have been, and are authorised by the FSA. One further assumes that the FSA know what the platforms are authorised for. Surely it does not take rocket science for them to figure this out or are we hearding for another Keydata fiasco where it al goes horribly wrong and we all find out that the platforms had, for years been performing activities for which they were not authorised so to do. Interesting concept.

  2. The spot light is pointing at the wrong target. The problem is that the FSA regulates PRODUCT advise. This is a foundation piece of the legislation since 1987. The world has changed, the product is now service and this is what platforms provide, the old product (tax wrapper) is now a commodity in most cases and therefore choice at the individual client level between providers is now almost irrelevant. However, the FSA still regulates tax wrapper product choice advise alone because that is all it is allowed to do. To change the legislation will require a whole new Financial Services Act and until that happens, the FSA will continue to be forced to make fudges and compromises trying to squeeze square pegs into round holes.

  3. What do platforms provide?

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