Source · Select Committees · Treasury Committee
Recommendation 12
12
Paragraph: 93
The “halo effect” appears to be inevitable as long as authorised firms also carry out...
Recommendation
The “halo effect” appears to be inevitable as long as authorised firms also carry out unregulated activities. We reiterate the recommendation made by our predecessors that the FCA should ensure that it requires authorised firms to make clear explicitly the risks to customers associated with their unregulated activities.
Paragraph Reference:
93
Government Response
Acknowledged
HM Government
Acknowledged
18 Second Special Report of Session 2021–22 As of 1 January 2020, we brought in a temporary ban on the mass marketing of Speculative Illiquid Securities (SIS), including speculative mini-bonds, to retail investors. In January 2021 we made the temporary ban permanent. Following the ban, the Non-Transferable Debt Securities market has declined significantly, as described in the research paper by London Economics for HM Treasury. We believe that in order for further interventions in this market to be effective, it is important to consider the interaction with wider changes being considered to how securities can be offered and distributed to retail investors, in particular, changes to the Prospectus Regulation that HM Treasury is now consulting on15 following the UK Listing Review by Lord Hill.