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Last week the Financial Services Authority (FSA) released good practice guidance for managers of UK authorised collective investment schemes (funds of pooled assets) – “Treating Customers Fairly and UK Authorised Collective Investment Scheme Managers” - which expanded upon the responsibilities described in last July’s policy statement PS07/11 “Guidance on Responsibilities of Providers and Distributors for the fair treatment of customers”.
PS07/11 admitted that: ‘there may be some difficult or complex areas where case studies (or at least additional clarification of what we expect of firms) may be helpful. So we intend to consider on a case by case basis whether further clarification is required in any particular area, and if so, what the best form for that clarification is’. This new document provides these practical examples for areas such as product design, provision of information to distributors and customers, selecting distribution channels and post-sales activities.
In view of the complexity of collective investment schemes (CIS) and the fact that the end customer often is not known to the CIS manager, these good practice illustrations only apply to deciding for which types of customer a new product or service is suitable (or not suitable), or which distribution channels can be used to get these products or services to the target market.
This guidance was created with collaboration from the funds industry and represents existing good practice already in place at many firms already undertaking regarding these two provider responsibilities. Treating Customers Fairly requirements become compulsory at the end of 2008.
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