Product providers criticise FSA diversification rules

Guidance from the UK’s Financial Services Authority (FSA) regarding diversification between products and counterparties could hit sales of structured products, according to market participants.

Last year, following the fallout of the Lehman Brothers collapse, the regulator published its Structured investment products suitability assessment template, which gave advice on product diversification.

The FSA highlighted an example of good practice in which an adviser had set guidelines of no more than