News Details

29 Apr, 2008

Prudential Regulation of Personal Investment Firms

The FSA has today published a feedback paper regarding Personal Investment Firms; Capital and PII requirements.

 A copy may be found at   (only about 45 pages)

 No decisions have been taken by the FSA yet.

 Possibilities :


  1. Increasing the level and quality of capital within a business.   Maybe restricting the amount of capital in the form of Subordinated Loans.
  2. Requiring Firms to take out Run-off cover when they cease to trade
  3. Retaining current PII requirements.

There is also a debate about risk based capital requirements – something that is unlikely to happen as the implementation costs will outweigh the benefits.

 One key measure that the FSA are interested in is the “turnover” of advisers within a Firm. If advisers keep leaving then this may be a signal that something isn’t working.


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