25 February 2018
visit www.ebaday.com

Apcims warns of Basel threat to securities business

10 July 2003  |  3713 views  |  0 Angela Knight

The greatest single operating cost of UK investment firms could more than double under the latest European proposals on regulatory capital according to the UK's Association of Private Client Investment Managers (Apcims).

Speaking at a City conference today, Apcims chief executive Angela Knight (pictured) said that although the European Commission's latest draft of its new Capital Adequacy Directive is an improvement for companies defined as "simple" investment firms, its complicated formula still leaves many non-banks caught in a regime designed for the banking industry.

The result will be completely disproportionate increases in costs for many investment firms, she told delegates to the Security Industry Software Association conference in London.

The Directive seeks to apply the Basel rules devised for large international banks on all of Europe's financial industry. Although its stated aim is to devise a system which is more closely related to risk, its basic assumption is that all firms are banks or bank look-alikes, says Knight.

"It's like putting a six-year-old girl in a size 18 party frock. It fits nowhere, it covers everything several times over and it keeps tripping her up every time she tries to move. Additional costs, not justified by additional risks, simply mean that the customer will pay more for no extra benefit."

A similar argument was made recently by the US Securities Industry Association, which called for national regulators to have discretion in the application of the rules to securities firms.

Says Knight: "Investment firms have to have their own tailored regime. It cannot be right to burden them with the same capital requirements as internationally active banks."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

SIA adds to US clamour over Basel

SIA adds to US clamour over Basel

27 June 2003  |  3870 views  |  0 comments
Financial services falling behind on Basel II

Financial services falling behind on Basel II

16 June 2003  |  5774 views  |  0 comments
Risk IT budgets bucking the downturn

Risk IT budgets bucking the downturn

14 May 2003  |  4230 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.swift.com/your-needs/instant-paymentsRegister for the webinarVisit www.vasco.com

Top topics

Most viewed Most shared
Ripple makes new connections to emerging marketsRipple makes new connections to emerging m...
12520 views comments | 16 tweets | 10 linkedin
hands typing furiouslySome Interesting Applications Of The Inter...
10743 views 4 | 9 tweets | 1 linkedin
Basel Committee outlines disruptive fintech scenariosBasel Committee outlines disruptive fintec...
9198 views comments | 15 tweets | 26 linkedin
Investment Association sets up fintech accelerator for asset managersInvestment Association sets up fintech acc...
8573 views comments | 19 tweets | 10 linkedin
R3 creates Legal Centre of Excellence for blockchain technolgyR3 creates Legal Centre of Excellence for...
8388 views comments | 11 tweets | 14 linkedin

Featured job

Competitive base + commission
London, UK

Find your next job