The FSA has today published a feedback paper regarding Personal Investment Firms; Capital and PII requirements.
A copy may be found at http://www.fsa.gov.uk/pages/Library/Policy/DP/2008/fs08_02.shtml (only about 45 pages)
No decisions have been taken by the FSA yet.
Possibilities :
- Increasing the level and quality of capital within a business. Maybe restricting the amount of capital in the form of Subordinated Loans.
- Requiring Firms to take out Run-off cover when they cease to trade
- Retaining current PII requirements.
There is also a debate about risk based capital requirements – something that is unlikely to happen as the implementation costs will outweigh the benefits.
One key measure that the FSA are interested in is the “turnover” of advisers within a Firm. If advisers keep leaving then this may be a signal that something isn’t working.
