For immediate release: 4 February 2009
IMA CALLS UPON FSA TO REGULATE STRUCTURED DEPOSITS
Responding to the FSA's consultation paper, Regulating retail banking conduct of business, IMA supports a new framework to regulate the way that banks treat their customers. However, IMA is concerned that the draft rules do not consider more complex products such as structured deposits and how they are distributed, posing a risk to consumers.
Commenting, Richard Saunders, Chief Executive at IMA said:
"Products such as structured deposits are marketed as equivalent to investment funds; therefore there should be a level playing field, both from a consumer protection and a competition viewpoint. This is not to say that there should be identical rules for their distribution, but the level of protection should certainly be comparable in relation to product features, costs and risks.
What's more, these products are actively marketed by banks as offering many of the benefits of investment products but with limited down-sides. But in terms of security, they are no more secure than any other bank deposit, and some structured deposits currently being marketed by major retail banks in the UK are in fact deposited with their offshore subsidiaries."
IMA's response can be viewed here.
About Investment Management Association (IMA)
IMA is the trade body for the UK's £3.4 trillion asset management industry. The money its members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs. Its role is to represent the industry and promote high standards.
For further information, please contact:
Noreen Shah, Press Officer, IMA, 0207 831 0898
Mona Patel, Head of Communications, IMA, 07834 089332