IMA wants FSA urgently to address the shortcomings in the London cash equity market that the Lehman collapse showed up. It highlights as particular issues:
- how Lehman was allowed to use only a non-segregated account for exchange trades so clients could not get the benefit of clearing house default rules;
- why Crest trades were frozen for nine weeks;
- that terms between brokers and their clients do not always deal fairly and transparently with both parties’ needs; and
- the lack of current regulatory powers for FSA to take control of client moneys promptly when there is a default.