The Financial Conduct Authority (FCA) could be set to make an example of senior managers of non-discretionary investment firms, which have been making profits off the interest accrued from growing client cash weightings this year as investors liquidated positions in response to the market volatility.
FCA executive director of supervision for the investment, wholesale and specialists division Megan Butler warned in a letter to CEOs that the regulator "will continue to review client money balances and follow up with firms" as it has become aware that cash balances have "significantly increased". She said: "Your firm's relevant senior manager should consider whether the firm needs to hold client money balances which are unlikely to be reinvested, or whether it would be in your clients' better interests to place these balances with their own current or savings account providers. Updat...
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