FINANCIAL SERVICES: DRAFTING PRIVATE CLIENT AGREEMENTS

Published date01 February 1995
Date01 February 1995
DOIhttps://doi.org/10.1108/eb024838
Pages147-152
AuthorJOANNA GRAY
Subject MatterAccounting & finance
FINANCIAL SERVICES: DRAFTING PRIVATE CLIENT
AGREEMENTS
Received: 1st December, 1994
JOANNA GRAY
JOANNA
GRAY
IS
A
SOLICITOR AND LECTURER
IN
LAW
AT
THE
NEWCASTLE LAW SCHOOL, UNIVERSITY
OE
NEWCASTLE. SHE IS THE LEGAL EDITOR
FOR
JOURNAL
OF
FINANCIAL REGULATION
AND
COMPLIANCE.
ABSTRACT
Investment
businesses
and
their
advisers,
have
gone
through the trauma of the new
settlement
in financial
services
regulation
and
emerged
into
a
brave
new
dawn
of
what
is supposedly less burdensome
regula-
tion.
The
major
regulatory challenge
on
the horizon
is
adjusting
to
life under yet
another
new
regulator
and
securing
com-
pliance with yet
another
new
set
of
stand-
ards once
the
Personal Investments
Authority
(PIA) has
overcome
its
well
publicised teething
difficulties.
However,
investment
businesses
need
to
keep their
compliance arrangements
and the
legal
structure
of
their client relationships
under
regular review. This paper raises some
issues
to
be
borne
in
mind when drafting
client
agreements,
in particular the written
two-way customer agreements that
the
Securities
and
Investment Board
(SIB)
Core Conduct
of
Business
Rules
require
in
the
case
of private
discretionary
manage-
ment clients (SIB Core Conduct
of Business
Rules
(CCBR)
14.2).
The changes inherent
in the new
settlement
in
financial services regu-
lation wrought
by the
Companies
Act
1989
gave firms more leeway
in
the drafting
of
these agreements
to
tailor them
to
their
own
require-
ments while maintaining
the
same
level
of
protection
for
their clients
as
was envisaged
by the SIB
under
the
original system when
it
issued very
detailed
and
highly directive rules
on what were
and
what were
not
acceptable contents
for
client agree-
ments. Now,
the
only mandatory ele-
ment
for
customer agreements
is to
be found
in the
'third tier'
of
finan-
cial services regulation
viz,
that
promulgated
by the
Self-Regulating
Organisations (SROs).
For the
pur-
poses
of
this paper discussion will
be
confined
to the
requirements
of the
147

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT