| I wonder if this was the intended effect? And if you think it’s simply because they were all too thick to pass the exams, you are wrong. Neither the FSA nor the broking firms I spoke to will say how many brokers have let their registrations lapse. Clearly there is a cost involved in registering, and while I’m not suggesting the firms are acting in any way improperly, I doubt Mifid was ever intended to give brokers a chance to save a few bob on their annual registrations. It was meant to tighten up propriety in all financial markets. But a loophole has been presented and the brokers have seen a chance to squeeze through it. Chris Taylor, the London compliance manager of Tullett Prebon, explains the rationale of the mass deregistration. “As per FSA customer classification requirements (imposed by Mifid), the vast majority of our customers in this business are banks or regulated institutions. They are, by their definition, assigned the classification of eligible counterparty. This class of customer requires the least amount of protection,” he says. “When dealing on behalf of eligible counterparties by way of arranging or bringing about a deal, the broker does not need to be registered with the FSA for this function. |