24th July 2008
One size fits all approaches are costly and damaging APCIMS tells the FSA
The Association of Private Client Investment Managers and Stockbrokers is using the FSA’s AGM to raise fundamental questions on the regulation of their industry.
APCIMS intends to pose questions to the FSA about post trade data, data security and the implementation of MiFID in Europe.
Market fragmentation and the aggregation of data
Since the UK has implemented MiFID, a number of alternative trading platforms and trade reporting venues have developed resulting in fragmentation of liquidity. Post trade data is a significant revenue stream for these venues and without a consolidated tape for the market as a whole, there is no easy or cost-effective way to enable brokers to guarantee best execution for their clients.
David Bennett CEO of APCIMS said: “We want to know how the FSA intends to tackle the issues of aggregating data coming from the many trading platforms through which investors are now trading. There is currently no requirement for the information to be aggregated. The result of this is potentially misleading data from information providers not covered by the provisions of the Financial Services and Markets Act.”
Data Security
New and additional changes to existing and adequate data security measures may be expensive, erode client relationships and produce outcomes which are not wanted either by firms, clients or regulators.
David Bennett said: “If the FSA impose a regime on firms whereby they are required to ask intrusive questions rather than use voice recognition to identify often long standing clients, the FSA risks undermining the foundations of a well functioning industry. Identifications such as a password, birth date and mother’s maiden name are inappropriate for the stockbroking industry and will undermine valuable client relationships and trust.
“If the FSA wants best advice and best execution from our sector, it needs to trust our business model which is built on personal relationships, often over several generations. If our members were not giving best advice and best execution they would not retain their client base. We want to say to the FSA ‘if it ain’t broke, don’t fix it’.”
APCIMS will ask the FSA to acknowledge the different business models run by personal investment firms and avoid telling them how to run their businesses by imposing costly one-size-fits-all approaches.
MiFID in Europe
The rigorous implementation of MiFID in the UK has been enormously expensive for UK brokers. Our members find themselves at a competitive disadvantage to European brokers where the local regulator is more relaxed.
“In order to maintain the stockbroking and investment management community in the UK, which manages £400 billion a year, we must ensure that there is a level playing field across Europe. We will be challenging the FSA to ensure we do not lose business because the UK has been more rigorous than some of its European counter parts in implementing MiFID”
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Notes to editors:
APCIMS is the trade association of more than 220 firms who, on more than 400 sites across the UK and Ireland, deal in stocks and shares for private investors. Together our aim is to ensure that the regulatory, tax and other changes across Europe bring real benefits to the investment community.
More than 12 million people in the UK currently invest directly in stocks and shares to secure their financial futures.
APCIMS members can guide clients through the world of finance and work to give them the very best return on their investments.
All APCIMS members are fully regulated by the Financial Services Authority.
As of the 1st of December 2001, all UK APCIMS members have been regulated by the Financial Services Authority (FSA).
The FSA succeeds IMRO (the Investment Managers Regulatory Organisation) and the SFA (Securities and Futures Authority) as the regulatory body for private client stockbroking and investment management.
Non-UK APCIMS members are regulated by the relevant authorities in their own country.
For further information please call:
Dirk Paterson,, Head of Communications,
APCIMS Office:
020 7247 7080
Mobile: 07507 855 428
Email: dirkp@apcims.co.uk
David Bennett, Chief Executive,
APCIMS Office: 020 7247 7080
Mobile: 077689 50041;
Email: davidb@apcims.co.uk