Transact says the regulator’s decision to allow de minimis cash rebates of £1 could be an acknowledgement that the cash rebate ban is a mistake.
Speaking in reaction to the Financial Conduct Authority’s platform policy statement, published today, Transact chief executive Ian Taylor says the ban on cash rebates is a step backwards.
Taylor says: “Cash rebates are essential for quick and flexible pricing and for fluid re-registration.
“Not all funds will have clean share classes, clean share classes will not all be cheaper and there are billions of “dirty” units in issue that will have to be converted if they are to be priced correctly. It is all about the operational detail.”
Taylor says the FCA has missed a chance to come up with alternative solutions to a cash rebate ban.
He says: “The fact that the FCA has proposed unit rebates and de minimis cash rebates could be interpreted as tacit acknowledgement that the banning of cash rebates is fundamentally flawed.
“The FCA had an opportunity to come up with some fresh thinking on this matter and it is a great shame that it did not seize that chance.”