The Financial Services Authority is now considering making a major concession in its proposed ban on cash rebates by allowing cash rebates of £1 or less following industry lobbying, FTAdviser understands.
The re-consideration is the product of a dialogue between the regulator and members of the platform industry as well as the Tax Incentivised Savings Association.
According to a source close to the situation, this concession could save providers a great deal of costs in administration, as it would mean huge numbers of small transactions could go through rather than be processed for refunds.
Last year, the FSA said it was standing by its plans to ban cash rebates to consumers from product providers in a long-awaited consultation paper, although it said it will allow rebates made through additional investment into the product, known as unit rebates.
Although the cash rebate ban will still take effect with the advent of the Retail Distribution Review in January 2013, platforms will have until 31 December 2013 to introduce the systems required for unit rebating because these are likely to be more complex.
The regulator is consulting on preventing platforms in both the advised and non-advised market from being funded by product providers through cash rebates. Platforms would only be remunerated through a platform charge agreed and paid by the consumer.
The regulator is also consulting on banning cash rebates from product providers to consumers using platforms on a non-advised basis.
The FSA said it would not comment until the publication of the long-awaited platform paper.
