Thursday 18 October 2012
IMA: CLIENTS SHOULD BE AT CENTRE OF FSA’S CLIENT MONEY REGIME PROPOSALS
Responding to the Financial Services Authority’s (FSA) consultation on changes to the client money rules, which relate to the introduction of central clearing of OTC derivatives, the Investment Management Association (IMA) welcomes the consultation, but puts forward recommendations on the technical provisions.
In its response the IMA suggests that the FSA should measure its proposals against specific client-focused objectives, since the purpose of the client money regime is to keep clients’ money safe when undertaking financial market transactions.
Jane Lowe, IMA Director of Markets, said:
“IMA members have a strong interest in the proposals for change to the client money regime as, on behalf of their clients, they place substantial reliance on the regulatory underpinnings for financial market transactions. It is important that the FSA should put clients’ interests at the heart of their regime, whether proposing short-term measures to implement European legislation, on this occasion EMIR, or long-term measures to restructure the wider client money regime.
“With this in mind, we have proposed that the FSA spell out the specific objectives which they seek to achieve in implementing changes to the client money regime.
“We provide detailed comments on the measures to implement EMIR. In particular we suggest that greater clarity is needed to establish all the circumstances in which cash margin posted to support derivatives trades will be client money; we flag concerns about the introduction of a two-tier regime – EMIR and non-EMIR; and we ask relevant questions about the interaction of the client money regime with the statutory insolvency regime for clearing houses* and with the bank resolution regime.”
*The statutory insolvency regime for clearing houses is set out in Part VII of the Companies Act 1989, providing an effective carve out for cleared trades from general insolvency law.
For further information please contact:
Mona Patel, Head of Communications
020 7831 0898 or 07834 089332
About the Investment Management Association
- The IMA is the trade body for the UK's £4.2 trillion asset management industry (retail and institutional) which is one of the world's leading investment management centres.
- Our role is to represent the interests of the asset management industry to government and regulators both in the UK and internationally.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.