Payments to platforms

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Payments to platforms
  • Introduction
  • The current business model
  • FCA concerns and consultations on payments to platforms
  • Implementation of rules
  • Interaction with the RDR
  • Cash rebates from providers to consumers
  • Conduct of business rules effecting the payments to platforms

Payments to platforms

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

Introduction

Online platforms are used by advisers and, increasingly, directly by consumers, to facilitate the administration of their investment portfolios.

The term 'platform' encompasses both wrap platforms and fund supermarkets. The distinction between the two often informs the way in which they generate revenue and receive payments. As their use and popularity increases, the Financial Conduct Authority (FCA) continues to subject platforms to scrutiny, as begun by its predecessor the Financial Services Authority (FSA), with issues surrounding transparency and conflicts of interest in payment structures continuing to be of particular concern. In this Practice Note, references to the FCA mean the FSA in relation to matters that took place prior to 1 April 2013.

For further information on platforms and a description of wrap platforms and fund supermarkets, please see Platform services, distributing products through platforms and the interaction with the RDR and the Investment Platforms Market Study.

The current business model

Notwithstanding the

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