Over the next few months we’re making a range of improvements to our service to make Share Dealing simpler and your investments more secure.
It’s in response to some new regulations which were put in place following the global financial crisis. The European Commission wanted to reduce the risk of this happening again so reviewed the existing regulations and introduced new ones to fill the gaps. The new regulations are very wide-ranging and, amongst other things, seek to increase transparency, better protect investors, reinforce confidence, address unregulated areas, and ensure that supervisors are granted adequate powers to fulfil their tasks.
Greater protection. The new regulations are intended to create best practice in a number of important areas such as how firms are managed and controlled, how well the financial markets are protected, and offer improved information to customers.
Some customers may be contacted to provide a little more information about themselves, but other than that there’s no action required. In fact, customers may find that they receive more information than they did in the past, for example quarterly statements, improved cost and charges disclosures and other information that helps them compare different companies’ services.
That’s a great question! These are assets where the regulators want customers to have increased protection before they can purchase them. What this means in practice is that firms have to find out if a customer has the necessary experience and knowledge in order to understand the risks of investing in the asset. The complex label is more to do with the way assets are structured and whether they have specific features and risks that you need understand before you invest. It’s also important to note that not all assets are considered ‘complex’, such as ordinary shares, simple bonds and the vast majority of UK funds.
No - from a customer’s perspective all the changes introduced by this regulation are positive. The regulations are being put in place to make sure the investment market works exactly as it should, and to look after your interests.
The views expressed are those of the industry expert and are not intended to provide legal, tax, or financial advice.