The Financial Services Authority (FSA) has today published rules on platforms regulation. This follows a review of the regulation of platforms in the context of the objectives of the Retail Distribution Review (RDR).
The rules published today extend the consumer protection elements of the RDR into a rapidly developing area of investment services. These new rules have two key aims; firstly, to ensure that consumers receive a better service and, secondly, for the market to be more transparent and operate more efficiently.
The key rules designed to provide better service for consumers:
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require platforms and other nominee companies to transfer, within a reasonable time and in an efficient manner, assets held on behalf of customers to another person, when requested; and
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require platforms and other nominees to pass on fund information to the end investor.
To enable greater transparency and efficiency in the market, the rules:
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require investment adviser firms using a platform service for the purposes of making a personal recommendation, or arranging the purchase of retail investment products for retail clients, to take reasonable steps to ensure that they use platforms services that present their retail investment products without bias;
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require platforms to disclose to professional and retail clients any fees or commission they arrange to accept from third parties in relation to retail investment products. These should be disclosed in advance of the platform providing services to those clients;
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extend the application of the RDR rules on facilitating payment of adviser charges to facilitation through platforms - for instance, if a platform has client cash accounts, it could enable payments of adviser charges out of such accounts; and
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require nominees to respond to information requests by authorised fund managers for liquidity purposes.
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Policy Statement 11/09
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