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FCA Consultation Paper, CP 19/12 closes with Policy Statement to follow in Q3, 2019

Background

  • On 14th March 2019, the FCA issued their Consultation Paper, CP 19/12 proposing changes to the regulation of platform service providers from the findings of the Investment Platforms Market Study (IPMS).
  • The final IPMS report was also published on 14th March 2019.
  • The CP also includes a discussion chapter on Exit Fees.

Impact

  • The CP proposes changes to make it easier for the consumer to move from one platform to the next, their objective to make transfers simpler and includes the following proposals:
    • a requirement for platforms to offer consumers the choice to move units in investment funds that are common to both platforms via an ‘in-specie1’ transfer
    • a requirement for platforms to request a conversion of unit classes, where this is necessary to enable an ‘in-specie’ transfer to take place
    • a requirement for platforms to ensure that consumers moving onto a new platform are given an option to convert to discounted units, where they are available for investment by the consumer
  • Within the IPMS, the FCA state their view that a ban on platform exit fees is likely to be appropriate as a measure to limit harm.
  • The FCA have noted that in order to introduce such a proposal, the input of the industry is required given that these platforms compete in a wider retail distribution market. 
  • The CP includes proposals on Exit Fees covering, 1) their definition, 2) the scope of the intervention, the types of firms that the intervention should apply to and 3) whether the intervention should be a ban or a cap on such fees.

Timeline

  • This Consultation closes on 14th June 2019 with a Policy Statement to follow in Q3, 2019.