FCA consults on miscellaneous changes

FCA’s latest Quarterly Consultation Paper covers:

  • amendments to FEES in respect of fees when firms apply for a VOP for provision of payment initiation and account services. FCA needs to charge fees as it has realised it will need to apply more resource to these applications than it does to standard VOPs.
  • DEPP and EG in respect of the PRIIPs Regulation. A draft statutory instrument, the PRIIPs Regulations 2017 provides FCA with powers over both authorised and unauthorised entities so it can require any person who manufactures, advises on, sells or markets a PRIIP to take a range of actions including stopping or suspending its marketing, and requiring compliant KIDs to be published. FCA also gets the power to fine persons who do not comply with the PRIIPs Regulation or the UK legislation.
  • COBS 16 and various other rules and forms in preparation for IDD implementation. FCA has realised that its proposed MiFID 2- related changes to COBS 16 would have the effect of disapplying the rules in COBS 16.5 and 16.6 to insurers doing long-term business in relation to life policies, and is proposing changes that will correct this.  Additionally, FCA proposes various changes to terms and forms to reflect the IDD and its terminology.
  • IFPRU to ensure full implementation of the CRD. FCA proposes an addition to IFPRU 2.2.28 to complement the existing rule and require firms to have adequate financial resources and internal capital where they hold opposite positions in stock-index futures which are not identical in respect of their maturity, their composition or both.
  • clarification on how firms can provide personal projections in relation to the PRIIPs KID. FCA has realised that some firms may wish to provide wider information than envisaged in the PRIIPs Regulation. Where they do so, FCA expects firms to clarify how these differ from the KID scenarios – and stresses that the KID must always be provided. It will not require firms to apply the PRIIPs assumptions and calculations to non-standard investments, which would be good for consistency, but it thinks would prove too difficult.  However, it seeks views on this.
  • changes to the economic assumptions in COBS 13 to update them.
  • regulatory reporting,  in respect, mainly, of form FIN-A. FCA proposes to add new questions to allow it to enhance its prudential supervision of firms; and
  • how to deal with a potential barrier to consumers accessing retirement interest-only mortgages and to correct a mistake in the definition of “lifetime mortgage”. FCA has found that an unintended consequences of its decision to redefine retirement interest-only mortgages as lifetime mortgages may be restricting consumer access. Additionally, it has traditionally restricted availability of lifetime mortgages to older customers above a specified age and has found it has inadvertently partially disapplied this restriction. It now plans to correct this.

Comments are due by 2 October for some changes and 1 November for the rest.