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Stockbroker Transfers – More Evidence of Unreasonable Delays

Back in November I wrote about the delays that can occur in switching a portfolio of shares from one stockbroker to another. I now have a file of 7 examples contributed by different people where such transfers took several months. This is surely totally unreasonable and unnecessary.

On behalf of ShareSoc and our members I have written to the Financial Conduct Authority (FCA) complaining about this problem and have received a response which provides some more information at least.

The FCA does have a Rule in its “Conduct of Business” handbook that requires that brokers “must execute the client’s request within a reasonable time and in an efficient manner” if a transfer request is made. Needless to point out that the brokers might consider three months a reasonable time when the client might not.

There is an initiative called the TeX Register whose objective is to support tighter Service Level Agreements (which defines how quickly responses should be made) and a messaging system to speed up transfers, but this is a voluntary code to which few brokers have signed up. Even if they have joined this organisation, there is no certainty that they will adhere to the Service Level Agreements.

In essence this is completely ineffectual system and I have suggested to the FCA that they need to implement some more specific rules in this area so as to focus the minds of stockbrokers on the problem.
Roger Lawson

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