Trade bodies unite against FSA proposals
The Investment Management Association (IMA) and the Association of Private Client Investment Managers and Stockbrokers (APCIMS) have both voiced their strong opposition to the FSA’s proposed changes to the Financial Services Compensation Scheme (FSCS) sourcebook.
The trade bodies have argued that a much wider review is necessary if the central issues are going to be tackled simultaneously.
Guy Sears, IMA director of wholesale, says: “We’re disappointed to see that the bulk of the proposal concentrates on improving administrative processes within the FSCS at a time when the scheme rules need a complete overhaul. These areas should be suitably addressed under one extensive review to ensure the rules operate to provide protection, that the scheme secures appropriate funding and that consumers understand the nature and extent of any protection.”
The proposals currently being considered fail to consider the impact of cross-subsidy, says the IMA and the APCIMS. The bodies cite a previous occasion when asset managers had to find £233 million to contribute to the £333 million needed in 2011 for intermediary defaults.
Ian Cornwall, APCIMS director of regulation, says: “The proposals appear to address a limited number of ad hoc issues associated with the FSCS and it is unclear why it has been published now given a further consultation paper on the FSCS is due to be published shortly. Certain issues, such as the definitions of eligible claimants, addressed in the current consultation paper may also need to be revisited in the further consultation.”
The Financial Services Authority is due to provide feedback on all the responses to the consultation at the end of September 2012.
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