FSA considers ‘layered regime’ for retail Ucis sales
FSA considers tiered approach to assessing retail customers’ suitability for unregulated funds.
The FSA is considering treating different types of retail clients in different ways when considering whether they are suited to unregulated collective investment schemes (Ucis).
The FSA had previously branded one type of Ucis, those that invested in traded life policies, “toxic” and broadly unsuitable for retail investors.
However, according to the minutes of the regulator’s February board meeting published yesterday (May 3), the approach was suggested to allow some investors for whom Ucis may be considered appropriate to continue to put money into such investments.
The minutes said: “A multiple layer regime was being suggested to allow sales to continue to customers for whom Ucis were more likely to be suitable but to restrict sales to other customers.”
The regulator’s board said categorisation of retail consumers would be a “specific focus” of the consultation on sales restrictions, planned for later this year.
Last month the regulator issued guidance restricting the sales of traded life policy investments (TLPIs) - such as those which backed Keydata and the stricken ARM Asset Backed Securities fund. Advisers and providers have warned that the FSA’s stance may be too draconian as well-run TLPI funds may be suitable for “sophisticated” retail investors.
In addition, the FSA board considered the implications of retail clients having indirect exposure to Ucis through pension fund investments.