Regulatory update
| Pages | 66-69 |
| Date | 01 January 1997 |
| DOI | https://doi.org/10.1108/eb024907 |
| Published date | 01 January 1997 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 5 Number 1
Regulatory update
SECURITIES AND INVESTMENTS BOARD
Guidance
SIB Guidance Release 3/96 —
standards for the custody of
customer's investments
The Treasury has decided to make custody of
investments an activity requiring authorisation
under the Financial Services Act 1986 so SIB
has now published Guidance addressed to
self-
regulatory organisations (SROs) and recog-
nised professional bodies (RPBs) setting out
standards and guidance notes for the safeguards
which Securities and Investments Board (SIB)
will expect those bodies to incorporate in their
rules and maintain so as to afford protection to
investors. The SIB looks to SROs and RPBs
to require that authorised firms:
— make custody arrangements with due care
and clarify the responsibilities of the
various parties to the custodial arrange-
ments
— hold customers' investments so that they
are separately identifiable from their own,
and arrange for appointed third party
custodians to distinguish customers' invest-
ments and hold the firm's and the firm's
customers' investments so that they are
separately identifiable from the custodian's
own
— observe appropriate arrangements for the
security and integrity of custody facilities
and systems for the transfer of investments
— ensure that the individual investments of
their customers are clearly recorded and
that when authorised firms act as custo-
dians or appoint third party custodians,
customers' investments are frequently
reconciled, authorised firms must take
responsibility for shortfalls and customers
must receive statements on a frequent basis.
Rule changes
The Financial Services (Miscellaneous
Amendments) (No. 23) Rules and
Regulations 1996
On 3rd October, 1996 SIB published Release
167 containing revisions to rules relating to
compensation, promotion of unregulated
schemes, and cancellation which took effect on
26th September, 1996.
PERSONAL INVESTMENT AUTHORITY
(PIA)
Rule changes
Rule Notice 20 — Rule changes
effective from 2nd September 1996
The requirements of PIA rules relating to
members which are friendly societies and to
the sale of certain policies issued by friendly
societies by such members or by independent
practitioner members. Amendments are made
to Chapter 2 (Investment Staff), Chapter 5
(Record-keeping), and adopted Financial Inter-
mediaries, Managers and Brokers Regulatory
Association (FIMBRA) and Life Assurance and
Unit Trust Regulatory Organisation
(LAUTRO) rules. These amendments intro-
duce:
— an increase in the earnings limit from £500
to £1,000 below which certain regulatory
requirements (obtaining references, regis-
Page 66
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