Platforms slam FSA £1 cash rebate plans

 

Platforms have criticised FSA proposals to allow cash rebates of up to £1 saying it will create further confusion in the market.

In June, the regulator confirmed its intention to ban both cash rebates and payments between fund managers and platforms.   However it now appears it is ready to allow cash rebates of up to £1 per month to clients from individual funds after discussions with the platform industry.

Transact chief executive Ian Taylor says: “Fund managers will not be able to tell what money should be paid back in units and what is in cash because they hold the investments in bulk. To avoid this kind of issue cash rebates should be allowed to continue in their current form.”

The FSA is also set to permit certain payments between fund managers and platforms for things such as fund error corrections and corporate actions.  The FSA is due to publish its final rules in the coming months.

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