11th November 2008
Treating Customers Fairly (TCF)
APCIMS welcomes the FSA's decision to embed ‘Treating Customers Fairly’ (TCF) initiative into their core supervisory activity but there are key lessons to be learned going forward.
David Bennett CEO of APCIMS said:
“We whole heartedly welcome the constructive decision by the FSA to put the TCF initiative to bed. We note the FSA's acknowledgement of the efforts of firms and trade associations to address the issues but have always pointed out that the initiative failed to take account of our very client focused model.
“We believe there are key lessons for the FSA to take on board from this episode: to regulate an industry effectively the regulator must fully understand how it works and a cost benefit analysis must be carried out.
“The FSA initially took a ‘one size fits all’ approach without outlining any analysis of their concerns within our sector. Until recently no case studies were produced that were relevant for our firms. However in recent months we have enjoyed a constructive dialogue with the FSA and we look forward to working closely with the FSA to ensure better understanding of our sector in the future.
“TCF has been one of the largest regulatory initiatives undertaken by the FSA and we have argued from the outset that disconnecting this process from the better regulation principles of full formal consultation and cost benefit analysis was wrong.
“Our membership’s business model has always depended on treating customers fairly. That is why some of our members have been looking after clients for over three generations. So we fully applaud the principle behind the initiative, but have always questioned the execution. This is a great opportunity for the FSA to have a fresh approach to regulating our sector through careful analysis of our businesses and we have every confidence that they are moving in this direction.”
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For more information please contact:
Dirk Paterson, Head of Communications, APCIMS
on 020 7448 7100
Mobile: 07507 855 428
Email: dirkp@apcims.co.uk
Notes to editors:
APCIMS
- More than 12 million people in the UK currently invest directly in stocks and shares and other financial instruments to secure their financial futures
- APCIMS represents over 140 firms all over the UK who deal primarily in stocks and shares on behalf of individuals and the institutions in which we have our money
- Around £400 billion of the country’s wealth is under the management of our members
- Our aim is to ensure that the regulatory, tax and other changes across Europe minimize impact on the investment community
- We want to lead the debate on regulation in Europe, with UK regulators and with British parliamentarians to make sure consumers are protected while at the same time our industry flourishes in the UK
Treating Customers Fairly Legal obligations
Under the Financial Services and Markets Act (2001) the FSA did not have any legal requirement to consult on TFC initiatives because TCF has not technically been a rule change. However, given the scale of the project and the ethos under pinning better regulation, APCIMS argues that the FSA still should have undertaken both a consultation and cost benefit analysis.
APCIMS have supported our firms to prepare for TCF in a number of ways including seminars for firms, the APCIMS Best Execution Guide and the APCIMS Risk Booklet.