de | cn | ru

Market News

UK Financial Watchdog Sets Order in Platform Payment Rules

At the start of the month, the UK's Financial Services Authority (FSA) was divided into the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), two watchdogs that set ambitious aims for beefing up controls in the sector. It soon became clear that the new regulators were not kidding, as on April 24, the FCA slapped a GBP 4.2 million ($6.6m) fine on EFG Private Bank for problems in its anti-money laundering procedures. 


And just a couple of days ago, on April 26, the FCA unveiled a set of new rules for the platforms industry, this time aiming to set in order the way the platforms are paid.

UK Platforms

Platforms are a form of online services that allow retail intermediaries and retail clients to monitor and administer investments. In the UK, they are also used for the safeguarding and administration of financial instruments for the account of clients. Putting it bluntly, platforms allow clients to purchase different retail investment products, like exchange traded funds (ETFs), and to take part in different investment schemes.
Sometimes platforms use advisors as intermediaries (advised-based platforms) and sometimes they provide their services directly to clients (D2C). The new rules will apply to both advised- and non-advised platforms.
One of the reasons that the platforms industry has fallen under the watch of the FCA is that it has been rapidly expanding over the past few years. According to research by Deloitte, 16% of all of the assets in the UK, or GBP 229 billion ($357bn) are held on platforms. And by the way, the UK platforms market is the leader in Europe in respect to assets under administration (AuA).

The Problem

The FCA has spotted a problem in the way the platforms are financed: it turns out that many of the platforms are funded through payments, or rebates, from product providers. The rebates allow such platforms to offer services for “free” to retail investors, while allowing product providers to influence what products and services the platform offers. A platform may simply stop offering services for which it does not get rebates.
The regulator has concluded that such practices are rotten, as they damage competition and do not allow customers to make an informed choice about the price paid to use a platform.

The Solution

The FCA bans any rebates or funding sources of a platform, apart from customer charges. In other words, platforms will be banned from getting any remuneration other than platform charges payable by the retail client for its platform service. It cannot be simpler than this – you pay what you get and you get what you've paid for!
The rules are set to come into effect on April 6, 2014 – and that's less than a year from now, while the companies affected will have to move all of their clients (and their legacy assets) to the new structure until April 6, 2016. That's a two-year period of transition and we hope that's enough for affected parties to re-adjust!
TAGS: uk  fca  financial conduct authority  platforms  forex trading  investment  retail investors  rebates  platform charges 

Related forex news

Broker Country Regulation Platform Min Deposit Review
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Australia ASIC MT4, MT5,
$100 Review Website
Cyprus, Australia CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia, South Africa FCA, ASIC, FSCA MT4, Trading
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
UK FCA MT5 $5 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
$200 Review Website
UK, Cyprus, Dubai FCA, CySEC, DFSA MT4, MT5, Web,
$100 Review Website

More Forex Market News

Arsenal will partner with Global Kapital Group

Sep 20 2019 17:16:28

English Premier League football club Arsenal will partner with Global Kapital Group, which owns several forex and CFD brokers including GK Pro (formerly known as GKFX), GKFX Prime and GK Invest. Read more

SEC accused Mediatrix Capital of $125 mln Ponzi scheme

Sep 19 2019 16:46:45

Mediatrix Capital, which claimed that its clients profited for 5 consecutive years without a single monthly loss, and which also was awarded as the Best Family Office Asset Manager in Monaco, is now been accused by U.S. Securities and Exchange Commission (SEC) of running a Ponzi scheme. Read more

Germany will block Facebook's Libra

Sep 18 2019 17:13:56

This time it was the German government, who delivered yet another blow to Libra, the Facebook backed stable coin, that is planned to be launched in 2020. Read more

Facebook assures central banks not to fear Libra

Sep 17 2019 17:23:34

Facebook reassured world central banks that Libra, the new stable coin the social media giant plans to launch in 2020, will not replace sovereign currencies like the U.S. dollar or the Euro, and will not threaten the central banks’ control over money creation. Read more

Philippine police arrests 277 employees in connection to a forex scam

Sep 16 2019 17:33:44

Acting on a tip from the Chinese intelligence agency the Philippine police has arrested 277 Chinese nationals working for online forex and crypto scammers. Read more

FCA prepares for a no deal Brexit

Sep 12 2019 17:05:09

The Financial Conduct Authority (FCA) in the UK has opened an emergency phone line (+44 800 048 4255), as well as a series of specialized information websites that are intended to help the financial sector cope with the possible consequences of a no deal Brexit. Read more

Police in Taiwan warns of forex scams on dating websites

Sep 11 2019 14:08:40

The Criminal Investigation Bureau (CIB) in Taiwan warns of a new wave of investment scams on dating and chat websites, featuring a case of a man who lost over 4 million Taiwanese Dollars (128 000 USD). Read more

The Marshall Islands launches a sovereign crypto coin

Sep 04 2019 16:57:05

The Marshall Islands, the small Pacific nation that is also a favorite offshore destination for many brokers that prefer to avoid the strict regulations in Europe, the U.S. Read more

Dutch authorities to regulate all crypto dealing firms

Sep 03 2019 13:43:03

The Dutch Central Bank announced new rules for all companies dealing with crypto currencies that will take effect from January 2020. Read more

Ex-BinaryBook employee sentenced to a year in prison in the US

Sep 02 2019 14:26:10

  Israeli binary options operative Lissa Mel pled guilty to her role in $145 million scam scheme, and was sentenced to a year in prison and $288 024 in restitution to victims by a US federal court previous week. Read more

de | cn | ru