P564ORACLE 564 Mon 3 Feb C4 1714:45
1/6
Better protection
for your money
Back in June 1985, investors in one
company lost nearly half a million ££s
when the company crashed. In July, 3
housewives travelled to Britain from
Australia, America and Holland to
confront the director of another firm,
claiming that he owed they and their
friends some £750,000.
Consumer organisations have long been
calling for better laws to protect
investors' money. Now the Government
has taken notice and, by next year, we
could have a new Financial Services Act
more follows >
Your Money ...560 Tax Rates ...565
RECRUITMENT ADVERTISING ON 496
P564ORACLE 564 Mon 3 Feb C4 1702:04
2/6
Better protection
for your money
At the end of 1985, the Government pub-
lished its Financial Services Bill, the
biggest spring clean of investor
protection in 40 years.
If the Bill becomes law, it will become
a criminal offence to run an investment
business without authorisation ─ there
will be fines and up to 2 years in
prison for those who do. Any investment
business which isn't first OK'd by a
special watchdog Board may find itself
unable to enforce contracts made with
its customers.
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Your Money ...560 Tax Rates ...565
PROPERTY FOR SALE - 496
P564ORACLE 564 Mon 3 Feb C4 1712:47
3/6
Better protection
for your money
There will be 7 ways in which the esti-
mated 15,000 investment businesses can
be authorised to do business, but most
will choose to belong to a Self
Regulatory Organisation.
Once an SRO has been recognised, its
members get automatic authorisation.
Then it's up to the SRO to make sure
its members stick to the rules. Since
membership of one SRO will not necess-
arily permit a firm to do all types of
investment business, some firms may
need to join several. But it won't be
compulsory to join even one and some
people will opt for the second main way
─ direct authorisation.
more follows >
Your Money ...560 Tax Rates ...565
P564ORACLE 564 Mon 3 Feb C4 1710:46
4/6
Better protection
for your money
Individuals in the investment business
can opt to be authorised directly by
the proposed watchdog Board.
Applicants will have to come up with a
business profile specifying the type or
types of business they hope to do ─ an
Investment Adviser or Manager, say. A
simple description of these activities
will need to be printed on business
stationery or literature.
The applicant must be a fit and proper
person to run an investment business
and must have enough money available to
cover periods when the business pays
out more money than comes in.
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Your Money ...560 Tax Rates ...565
P564ORACLE 564 Mon 3 Feb C4 1713:23
5/6
Better protection
for your money
The Financial Services Bill suggests
some rules for the relationship between
investment firms and their customers.
Firms won't be allowed to pose as inde-
pendent advisers when, in fact, they
have arranged to do business with only
a few companies. Anyone employed to
sell life insurance by one company will
have to tell the customer this and not
imply their advice is impartial.
Firms won't be allowed to give or get
extra commission payments for selling a
large number of policies, and adverts
will carry risk warnings ─ the share
price may go down as well as up, say.
more follows >
Your Money ...560 Tax Rates ...565
P564ORACLE 564 Mon 3 Feb C4 1711:22
6/6
Better protection
for your money
For investors who lose their money when
a firm goes bust, the Financial
Services Bill proposes a compensation
scheme ─ though consumer organisations
are right in saying the £30,000 limit
is too low.
To save the time and expense of going
to Court, there'll be an Investment
Ombudsman to handle complaints. The
customer won't be bound by any decision
he or she makes but, for an investment
business which agrees to subscribe to
the Scheme, the Ombudsman's decision
will be final.
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Your Money ...560 Tax Rates ...565
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P564ORACLE 564 Mon 3 Feb C4 1706:31
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