The proposals in CP174 require firms to hold at all times a minimum of £5,000 or 5% of annual net income as capital to provide a further financial safeguard to consumers.
IMLA argues that intermediary firms who do not hold client money and meet the FSA’s rule on PI Insurance and general solvency standards are not putting their clients at a level of financial risk that justifies the requirement to hold capital.
IMLA Chairman John Heron said "We feel strongly that the burden of regulation must be proportionate to the risks involved. This is one area where we feel that the lives of intermediaries could be made easier by the FSA taking an approach that is more tailored to this specific market”
More information can be viewed at the IMLA website www.imla.org.uk
