As part of the Government’s reforms of previous EU legislation, next on the list is the proposal to scrap the 10% portfolio drop rule, which was introduced within MiFID II rules in January 2018.
Under the legislation firms were required to notify clients where the overall value of their portfolio had fallen by 10% or more over a reporting period (usually quarterly). The requirement was that the notification was performed by the end of the business day where drop had occurred (effectively within 24 hours), plus any subsequent 10% falls over the same period.
In anticipation of Covid related market volatility, the FCA had previously relaxed and further extended the rule on several occasions, most recently in December 2021.
An Explanatory Note issued by the Government states that: Regulation 2(4) removes obligations for investment firms providing portfolio management services to a retail client to inform the client when the overall value of the portfolio depreciates (Article 62 of the Commission Delegated Regulation).
A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.
Formal announcement of the scrapping of the rule is awaited, but this is widely anticipated to be the start of a broad culling of the EU related rules. It will be interesting to see what goes next …
Budget Announcement: Future Tax Year Changes
Doug McFarlane Suitability 2024, Budget, content management, Mortgage, Pension, PI, Suitability Review, Template Enhancement, Update
In anticipation of the upcoming increases to the Business Asset Disposal Relief (BADR) rates in April 2025 and 2026, as well as the introduction of Inheritance Tax (IHT) on pensions starting in April 2027, we have implemented the following template updates: A new note has been added to the ‘Current IHT Position’ calculation table, informing […]