The FSA has identified regulatory failings at Transact during a wider investigation into how the platform industry protects client money.
It fined Transact’s holding company, Integrated Financial Arrangements, £3.5m for failings in protection of client funds following an FSA visit in May 2010.
Money Marketing, Fundweb.co.uk’s sister publication, understands the regulator has also visited other platforms to inspect how they protect client funds.
Nick Dixon, marketing director at Skandia, says: “It is important to have very clear separation of shareholders’ money and client money. It is one of the golden rules of holding on to assets and the FSA is scrutinising platforms’ processes on this to make sure they are robust. The FSA has shown that if it is not convinced about a platform’s separation of assets it will take action.”
Ed Dymott, head of commercial at Fidelity FundsNetwork, says: “Clearly this is an area where the regulator is increasing its focus and the broader review is further proof of that. Platforms and anyone affected by the rules need to follow them carefully.”
Harry Kerr, director of Avalon, says: “It looks like the regulator has tightened up on the area and is making sure platforms are following the rules. The only problem is that sometimes the rules are quite difficult to follow and good firms such as Transact end up falling foul of them. Hopefully, this review will lead to some greater clarity and better protection for clients.”
The FSA declined to comment.