ABSTRACT

The origins of the Personal Investment Authority (PIA) can be traced to the permissive character of the SIB regime under the 1986 Act, which gives powers to the SIB to recognize self-regulatory organizations, but no powers to compel those regulated to join any particular self-regulatory organization (SRO). In addition to the SROs the retail sector included recognized professional bodies as their equivalent, with their own standing as regards the construction of rule books and responsibilities for training, compliance, discipline and good conduct. The issues of lack of financial strength and capacity to fund compensation for misconduct which had undermined Financial Intermediaries Managers and Brokers Regulatory Organization (FIMBRA) hence returned to dog the PIA. Crucial to the agreement was a commitment by the PIA to continue negotiations on three matters: professional indemnity insurance, status disclosure, and pension transfer compensation. Since FIMBRA rules barred members from doing business in categories for which they lack PI cover, the consequences were serious.