Proposals to clarify the definition of "giving investment advice" have been put forward by the Isle of Man Financial Supervision Commission in a second consultation paper outlining plans for modernising financial services legislation.
The Consolidation and Review of Financial Services Legislation, called the CAROL project, sets out proposals for regulated activities, exclusions and exemptions which will be issued under the proposed new legislation.
There are two aspects to the second consultation paper which ends on 31 July 2006:
- A draft Regulated Activities Order, which will consolidate the activities currently covered by the banking Act 1998, Investment Business Acts 1991-93, Fiduciary Services Act 2000 and 2005 and Building Societies Act 1986.
- Draft Financial Services (Exemption) Regulations, which will bring together existing exemptions granted under the Banking Act 1998, Investment Business Acts 1991-93 and Fiduciary Services Act 2000 and 2005, with certain outdated exemptions being removed.
To outline the main changes to licenceholders and other parties, the Commission has drawn up a ‘RoadMap’ which shows what the existing rules are, how they are planned to be changed and what impact it will have on the particular industry sector.
One part of the consultation looks at the definition of “giving investment advice”, with plans to change it to differentiate between advice and promotion, although the change will not relate to collective investment schemes.
The consultation says the change has been made to stop confusion in the industry, but admits it may have a “knock-on effect to the exclusion of legitimately solicited transactions with UK FSA-regulated firms”.
Falling under the new proposed Regulated Activities Order, the Commission says the change could have a ‘material’ impact, meaning it “may result in some licenceholders having to extend their licensable activities or may require some companies to be regulated for the first time”.
As a result, the Commission is asking for comments and suggestions ahead of the next stage of the project which will help modernise existing provisions or develop any of the proposed changes.
John Aspden, chief executive of the Financial Supervision Commission, says the consultation primarily consolidates the provisions contained in existing legislation.
But he adds: “The Commission anticipates licenceholders and their advisers, who may have first hand knowledge of the changes occurring in their sphere of expertise may identify areas where further amendment would benefit the industry and we look forward to developing proposals for such areas through the consultative process.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation