The Stavro Financial Authority has announced that it is moving away from its outdated framework in which brand definition is based on the name of the intermediary and does not include any information about its business.
The new framework, published on its website, is designed to be more transparent for investors.
It includes a new set of guidelines for brand definition, including the need to state the purpose and objectives of the brand, the names of the company’s employees and the company identity.
It also sets out how to assess the risk of the investment and what assets the intermediary will have in the future.
While this is a big step forward for investors, the new framework does not address any of the thorny questions surrounding intermediary brand definitions that have long plagued the industry.
These include:How is the definition of an intermediary different from that of a traditional company?
Why is it appropriate for an intermediary to be a brand?
What are the specific steps it takes to identify and classify an intermediary as a brand, and how is the regulatory framework applying to it?
“It’s a very clear change of direction for the regulator, with the new guidelines requiring all intermediary brands to clearly identify the purpose of their business, and to describe their business objectives in a clear and unambiguous way,” said Andrew O’Leary, senior research associate at investment bank Jefferies.
“In the past, a lot of companies used intermediaries’ names and brand identities to brand themselves.
This was just confusing and didn’t really explain what the purpose was for the business and what its objectives were,” he added.”
The new rules will clearly allow a brand to be an intermediary brand if it’s clearly defined by the intermediary, which means it can be used as a reference, and its purpose will be fully explained.”
While this will allow an intermediary’s brand to more clearly identify its objectives, it also means the company will have to make the same distinction between the company name and the business name it uses on the website.
“In the same way as with traditional companies, the guidelines also require an intermediary company to make a clear distinction between its services and its own products and services.
It’s not yet clear how these new guidelines will be applied to the Stovros Financial Intermediary Brand Development program, which provides services to businesses that have signed up for the Stovaas brand program.
The regulator will publish its guidelines on Tuesday, January 10.