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This week in Regulation

Money Marketing this week revealed a high court victory over the Financial Ombudsman Service by IFA firm Garrison Investment Analysis which rakes up arguments over the way redress is calculated.

The Royal Courts of Justice overturned a FOS award for the alleged missale of NDF products saying its standard formula of calculating redress was ‘irrational’ for such high risk investors.

Regulation consultant Adam Samuel says this judgement should make the FOS consider whether it can continue to use its ‘short-hand’ method of calculating what the customer should be advised to do.

The FSA continued its tidying-up exercise of the approved persons regime by proposing the merger of customer functions in response to last year’s consultation.

The regulator says the cutting back of paperwork will save firms 1m a year – a point its press office helpfully highlighted again in a separate email to journalists to ensure good coverage to balance against the usual snipes of an overbearing leviathan.

Money Marketing would never dream of being anything other than balanced in its coverage of the regulator and is happy to point out the impressive example of deregulatory work currently being conducted at Canary Wharf.

The consultation paper also sets out proposed Mifid influenced changes to the approved persons regime – which the FSA says will just be a case of superseding current rules.

The regulator also published a paper on implementing Mifid Client Categorisation requirements in a sign that Mifid junkies can look forward to an increase in activity ahead of the consultation paper on refining COB regulation scheduled for this October.

In the political arena the Treasury was quick to slap down Blair ‘outrider’ Stephen Byer’s call for an end to inheritance tax as well as the Tory proposal to cut or scrap stamp duty on shares.

The Chancellor and his right hand man Ed Balls used the radio and national newspapers to ridicule what they see as short-term uncosted points scoring.

But with Byers and fellow leading Blairite Alan Milburn both rumoured to be preparing speeches in the next couple of weeks designed to tread on the toes of the Chancellor’s 2007 comprehensive spending review more fireworks can be expected.

Balls also needs to worry about where he will be after the next election with no sign that Labour backbenchers are prepared to make way for him when his Yorkshire constituency disappears in boundary changes next time around.

The Tories showed they are listening to the IFA community this week with John Redwood- in charge of the party’s Economic Competitiveness Group- sampling the delightful coffee to be had at Money Marketing’s offices and listening to the concerns of the IFA Defence Union.

He said the Tories were looking at radical ways to remove some of the regulatory burden placed on IFAs by the FSA and was looking for specific barriers that could be lifted.

Redwood said the Tory Economic Competitiveness Group had been deluged by grievances from advisers about the FSA but these needed to be better communicated if the Party is to produce polices that can help advisers by next July’s deadline.


IHT still has important role, says leading professor

Inheritance tax may be unpopular but it has an important role to play in the tax system and is unlikely to be scrapped, according to a leading economist.Speaking at the Institute for Fiscal Studies annual lecture, professor of economics and law at the University of California Alan Auerbach said slashing IHT is not particularly desirable.He […]

Nationwide reports slight house price increase

House prices increased by increased by 0.8 per cent in August, according to Nationwide.The building society says that the annual rate of growth accelerated to 6.6 per cent but adds that the recent interest rate rise from 4.5 per cent to 4.75 per cent will signal caution but is unlikely to lead to a repeat […]

Twice as nice

For those of you who remember the lord of the black dogs and former MM investment hack, you might be interested to know that Matt Davis is now officially married. Again. Having parted our shores for the rolling hills of Portland, Oregon and the lovely Sue, and having had the civil ceremony earlier this year, […]

FSA eases 1m burden

The FSA is proposing measures to simplify the approved person regime, which it hopes will save firms around £1m a year.It is consulting on merging the customer functions in the regime which it says will lessen the burden of paperwork on firms in the wholesale and retail markets.Managing director of regulatory services David Kenmir says […]


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