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Post subject: FSA capital reserves CP published
 Posted: Sep 27, 2008 - 02:44 PM
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Joined: Apr 05, 2005
Posts: 2987
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FSA publishes proposed changes to Personal Investment Firms' prudential requirements
The Financial Services Authority (FSA) has today published a consultation paper (CP) setting out proposed improvements to prudential requirements for Personal investment firms (PIFs) designed to help reduce the impact of market failures in the sector.
Richard Thorpe, Head of FSA Capital Adequacy Policy, said:
"Feedback from the industry supports our view that the current prudential regime for PIFs needs to be improved. Our reforms, which will mean PIFs holding more capital resources where necessary, are designed to mitigate the impact of such firms on the Financial Services Compensation Scheme (FSCS) and to reduce the complexity of the capital resources rules.”
The proposed new regime, which builds on Discussion Paper 07/4 published in July last year and Feedback Statement 08/2 published in April 2008, includes:
simplifying the calculation of capital resources and making it consistent for all firms;
extending the Expenditure Based Requirement to all firms based on three months of annual fixed expenditure and raising the minimum capital resources level from £10,000 to £20,000 for all firms;
mandating a sliding scale of additional capital resources that firms should hold as a provision against potential liabilities for any business or activity excluded from their professional indemnity insurance policies.
The prudential proposals are closely linked to the wider issues covered in the Retail Distribution Review (RDR) published earlier this week and, subject to consultation, will be fully implemented by December 2012 in line with the RDR timetable.
NOTES FOR EDITORS
Consultation Paper 08/20 Review of prudential rules for personal invested t firms is available on the FSA website.
http://www.fsa.gov.uk/pages/Library/Policy/CP/2008/08_20.shtml
2. DP07/4: Review of the Prudential Rules for Personal Investment Firms http://www.fsa.gov.uk/pages/Library/Policy/DP/2007/07_04.shtml
and FS 08/2 Review of the Prudential Rules for Personal Investment Firms - Feedback on DP07/4 are available on the FSA website
http://www.fsa.gov.uk/pages/Library/Policy/DP/2008/fs08_02.shtml |
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Post subject: FSA CAPITAL ADEQUACY PROPOSALS = less IFAs
Posted: Sep 28, 2008 - 09:23 AM
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Joined: Apr 05, 2005
Posts: 2987
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MAY SEE IFAs LEAVING THE INDUSTRY WARNS BDO STOY HAYWARD
If you are writing on today’s consultation paper by the FSA on the Review of the Prudential Rules for Personal Investment Firms, please consider the following comment from accountants and business advisers BDO Stoy Hayward LLP.
Paul Gough, Head of Retail Financial Services, at BDO Stoy Hayward says:
“Whilst the FSA's proposals to simplify and clarify the existing capital resources and requirements are welcome, the FSA may have underestimated the financial effect on smaller firms.
“A number of small IFAs, who have historically only been required to have capital resources of £10,000, will now be subject to the expenditure based requirement. This could well be significantly greater than the new proposed £20,000 minimum level,” he continues.
“They could also face higher funding requirements if they wish to leave the industry due to the "Leaving Resources Behind" proposals,” points out Gough.
“This combined with other changes proposed in the Retail Distribution Review (including the FSA's refusal to put a limitation on the time period for claims and additional costs of funding the Financial Standards Board) is likely to lead to large numbers of small IFAs either joining larger organisations or leaving the industry," concludes Gough. |
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Post subject: Mansell: RDR = Mugabe's Land Reform Act
Posted: Sep 28, 2008 - 09:28 AM
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Joined: Apr 05, 2005
Posts: 2987
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"The FSA says the trusts may run for six years after the adviser leaves
the industry and that it is “exploring” whether after this period has
expired any funds left over would be passed back to the
individual."
Thus advisers, after a lifetime of service to their clients may be
forced out of business by a retrospective qualification imposed by RDR.
But before they go they are given a golden good-bye by the FSA! They are
obliged to leave funds in trust so that the FSA can raid the pot with
their retrospective redefinition of regulatory requirements, hindsight
reviews and inverted burdens of proof. After six years "IFf" there is
anything left the FSA would "explore" the need to give our own money
back to us!
...and all this at at a time when the banks have done for UK plc with
the FSA asleep at their watch! I think I'm getting the hint and the real
laugh is they think this is an industry fit for graduates! Well let me
say, anyone with half a brain will see the FSA for what it is: an
unelected, unaccountable monster and anyone that would volunteer to
subject themselves to this regulator might also have a career opening in
Zimbabwe! RDR is the equivalent to the Zimbabwean government's Land
Reform Act and we now have a hint of how a white farmer in Zimbabwe felt
after eviction from his land in the knowledge that famine would follow!
Like those same farmers many IFA's are asking should I get out now or is
there any hope Gordon Mugabe Browns FSA will come to reason?
Regards
SIMON MANSELL
TEMPLE BAR IFA LTD |
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