The story in Money Marketing last week, headlined, FSA looks at scrapping PI, may have given your readers a misleading impression of our intentions.
As CP 97 made clear, the FSA is proposing in the Integrated Prudential Source-book that PI would be manda-tory for financial advice firms with capital resources below £50m. PI provides protection for investors by increasing the funds available to meet investor claims in the event of problems arising within a firm.
This helps to meet the FSA's statutory objective of protecting consumers. The CP did say that the arguments for or against PI are not clear cut and that we welcomed comm-ents on our proposals but it is important for firms to be clear that the specific proposal is to retain it. While the consultation process continues, the existing PIA rules remain in force. Firms must renew their PI policies as and when they fall due.
Director, investment firms,