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FCA warnings continue but advisers remain positive

The third warning of the week was published this morning by the FCA. The regulator has been issuing warnings for unauthorised firms regularly since its inception on 1 April of this year.

Investors are this time being warned against James Eden, White Plains International Securities and Waterhouse Baker, who are not authorised under the Financial Services and Markets Act 2000 to carry out regulated activities such as advising and managing investments or arranging deals in the UK.

These warnings are not the first of their kind. In its first month alone, the FCA issued more than 20 such notices.

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The new regulator has been hot on the heels of unauthorised companies and industry individuals who have been manipulating the market. Yesterday, US-based high frequency trader, Michael Coscia, was fined almost £600,000 ($903,176) for deliberate manipulation of the commodity markets.

Advisers on the whole remain positive on how the FCA is working so far. Anna Sofat, managing director of London-based Addidi Wealth, said the FCA is “on the whole” positive on what the FCA has done so far, although she admitted there are still some areas to sort out.

Ms Sofat says, for example, the cost of regulation needs to be a focus for the regulator as it continues to increase for advisers. She said capital requirements for firms should also be reviewed. “A firm needs two to three months of expenditure or capital base and there is so much room for manipulation. [The FCA] needs to ask what it is looking to achieve,” she said.

For Pete Matthew, managing director of Penzance-based Jacksons Wealth, the FCA warnings should only come as a concern for those who have reason to be worried. He said, “Regulation is there to do a job. So far the FCA has been good, with a good statement of intent. It has good communications, too. Overall it looks promising.”

He added, “I’m pleased the light touch of the FSA has been rescinded.”