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PosSol presses for FSA to crack down on stock firms

Positive Solutions has called for the FSA to crack down on stockbrokers’ business models to avoid further defaults amid rising Financial Services Compensation Scheme levies for investment advisers.

Investment advisers are facing a total FSCS levy of up to £96m this year following the collapse of stockbrokers Pacific Continental Securities and Square Mile Securities.

The FSCS has announced an indicative levy of £58m in 2009/10. It will initially levy firms for £30m, with the additional £28m applied later in the year.

Advisers also face an interim levy of £38m for costs in 2008/09 relating to Pacific Continental and Square Mile Securities.

Overall, financial services firms will pay a general levy of £156m in 2009/10.

Positive Solutions chief executive Jim Reeve says the FSA has to do more to regulate stockbrokers’ business models.

He says: “The FSA must get tough on anyone that is developing products for advisers to sell to clients to ensure that they are much better regulated.”

An FSCS spokeswoman says there is a possibility that further stockbroking firms will fall into default during the year but the cost of those failures has been factored into the figures.

She says: “We do not expect any further costs as a result of further defaults at this stage.”


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Positive aspects

Spring is my favourite season. The first warm rays of sunshine and the profusion of colour from the spring flowers lift my spirits – and people smile more. So, while in a springtime mood, I want to take a more optimistic view of the world of financial services and talk about something positive.


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