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Rights and wrongs

There is no doubt that the Financial Services and Markets Act gives the FSA strong powers. Whether those powers are so Draconian that the European Court decides they breach the IFA&#39s human rights can only be tested by legal challenge.

If FSMA is overturned, the way that the IFA works would be changed for ever -no more retrospective reviews, no longer the threat of criminal proceedings without due process, no charges for spurious complaints. Intermediaries&#39 support for Jon Maguire&#39s challenge to the FSMA, under the banner Justice for IFAs, is born of years of regulatory pressure that has left professional indemnity insurance problems threatening IFAs&#39 businesses.

Maguire&#39s strategy raises many questions. Will he raise the £1m fighting fund? How long will it take to get any real benefit?Will a reduction in the FSA&#39s ability to act unhindered lead to an increase in day to day regulation to compensate? Will the press portray the sector as whingeing? Would a new business environment be more litigious and ultimately more costly to the IFA?

Aifa believes that its measured approach has achieved concessions on both depolarisation and professional indemnity insurance. Maguire&#39s tactics are a straightforward confrontation through the courts. But should challenging a perceived abuse of human rights be seen as confrontational?

The FSMA is undergoing a triennial review and, while some IFAs will want to limit their activities to responding to that consultation, others see the Act itself as fundamentally unfair. These are debates that the industry must have. That IFAs have legitimate grievances with their position in the regulatory framework is without question – the New Year must start with vigorous debate as to how best to address these issues.


Ban on companies using insurance to cover fines

The FSA has confirmed that it will ban firms and individuals from using insurance to pay regulatory fines under new rules approved late last month.The changes, which came into effect on January 1, are intended to ensure that companies and individuals pay the fines themselves rather than claiming it against insurance.The regulator has been contemplating […]

Analyst plays down question over Standard solvency

The FSA&#39s statement on talks with Standard Life over the calculation of its balance sheet should not be interpreted as indicating the life office faces insolvency, says Commerzbank insurance analyst Roman Cizdyn. Cizdyn says the matter relates to a dispute between the FSA and Standard over the interpretation of accounting rules which are yet to […]

NDF Administration – Secure UK Options Plan

Type: Capital-protected bond Aim: Growth linked to investors&#39 choice of the FTSE 100 index and Halifax House Prices index Minimum-maximum investment: £10,000-no maximum, Isa £7,000 Return: Up to 100% growth in indices at end of term Guarantee: Original capital returned in full regardless of performance of indices Closing date: January 16, 2003 Commission: Initial 4% […]

Abbey offers early release bond

Abbey has established a second issue of the protected growth plan, a guaranteed equity bond that will return investors&#39 original capital regardless of the performance of the FTSE 100 index. The bond has a term of five years and six months, but will mature in the third year if the index has risen by at […]


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