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Providers call for FSA to clear up RDR issues over deposits

Dickie: ‘Structured deposits need to be tidied up’
Dickie: ‘Structured deposits need to be tidied up’

Product providers have urged the FSA to address issues relating to structured deposits which have fallen outside the remit of the retail distribution review.

At a Money Marketing structured products round table, Investec head of intermediary sales for derivatives and structured products Gary Dale said the issue of commission for structured deposits need to be considered.

He said: “Structured investments are included in the RDR and structured deposits are not. The majority of products delivered through retail branch networks are deposit-based and the FSA has specifically stated that deposits are not included in their review, commission can still be paid. That is an issue which has to be addressed.”

Barclays Wealth managing director Colin Dickie said: “Structured deposits were out of the scope for the FSA review and that needs to be tidied up.”

He said the biggest impact of the RDR and the FSA review in terms of manufacturing will be on product design. “As things stand, structured products are deemed to be complex but a structured deposit and structured product in an Oeic is non-complex. I suspect that the standard delivery mechanism will be the Ucits III fund with charges outside.”

Morgan Stanley executive director of UK structured pro ducts Marc Chamberlain said: “This year, we will definitely see a lot of that and counterparty risk will be spread.”


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