Amelia GreenOn 27 March: FCA restated its expectation that firms have in place tested contingency plans to deal with major events and that the plans have been tested. In ensuring this, FCA and the BoE will actively monitor firms’...
Category - Conduct
Emma Radmore
FCA delays Directory publication
FCA had been due to publish the initial directory of certified and assessed persons on its Register at the end of March, but is now delaying it for at least a month. Dual-regulated firms had had to submit their data for...
Covid-19 regulator update 24 March
Late on 23 and on 24 March: PRA announced amendments to regulatory reporting for insurers in response to EIOPA’s recommendations. There will be between 2-8 weeks’ delay for most aspects of harmonised...
Regulator Covid-19 update for 20 March, including on key worker categorisation
On 20 March: BoE and PRA announced supervisory and prudential prudential policy measures to address the challenges of Covid-19: including: cancellation of the annual stress test for 2020 pausing until further notice the...
EIOPA takes Covid-19 action
EIOPA has set out its expectations on insurers as they try to manage the risks Covid-19 presents. Its key messages are: the importance of business continuity. It says regulators can help by being flexible on supervisory...
Jonathan DrakePIFMA concerned about Open Finance
PIFMA has responded to FCA’s call for input on open finance. While it applauds FCA’s stance on encouraging innovation, and feels the financial services sector has lagged behind other sectors in adopting...
Treasury Committee responds on IT failure and economic crime reports
The Treasury Committee has commented on the responses from Government and regulators on: its October report on failures in the IT industry. The report had concluded, among other things, that: regulators need to improve...
Treasury publishes outcome of regulatory framework review
Treasury has published the outcome of the consultation on the financial services future regulatory framework. The Government’s view is that the institutional architecture for regulation remains appropriate and is...
The Treasury Committees approves Bailey, but says it will keep an eye on the FCA
The Treasury Committee has today published its report on the appointment of Andrew Bailey as Governor of the Bank of England. Whilst it is satisfied that Mr Bailey has the professional competence and personal...
Rachael PrestonFCA speaks on vulnerable customers
Nisha Arora has spoken on FCA’s approach to ensuring firms treat vulnerable customers fairly. She stressed the need to move away from a tick-box approach to having policies to deal with vulnerability to showing...
FCA drives forward culture changes
FCA has published a Discussion Paper on how to drive purposeful cultures. The paper comprises a number of essays looking at how a good purposeful culture should lead to better outcomes for consumers, markets and...
FCA makes Covid-19 statement
Regulators are working to ensure firms are responding effectively to the consequences of the Covid-19 outbreak. FCA expects all firms to have contingency plans in place to deal with major events, and says it is working...
PRA writes to chairs on board diversity
PRA has written to the chairs of dual regulated firms reinforcing the importance it places on diversity within boards for improving decision making and providing effective challenge. It reminds firms it expects them to...
Jonny WilliamsFCA publishes life insurance outsourcing review
FCA has published the findings from its review into outsourcing in the life insurance sector. The review stemmed from FCA’s awareness that the sector relies heavily on outsourcing and third party providers, and...
FCA writes to CEOs on end of LIBOR
FCA has written a Dear CEO letter to asset management firms on preparing for the end of LIBOR. It expects firms to take all reasonable steps to ensure the end of LIBOR does not lead to markets being disrupted or...
Rebecca JonesMental Health: Practical Guide
The Money and Mental Health Policy Institute and the Money Advice Trust have jointly created a practical guide to understanding and evidencing customers’ mental health problems. The guide is aimed primarily at...
Caroline StevensonFCA speech on penalties, remediation and General Principles
On 12 February, Mark Steward, Executive Director of Enforcement and Market Oversight made a speech at an event on Investigations and Enforcement: A Guide to Managing Regulatory Action. Key takeaways from the speech...
Natasha BrownleeFCA appoints Interim Executive Director of Strategy and Competition
The FCA has appointed Sheldon Mills as the Interim Executive Director of Strategy and Competition. Sheldon will begin the role on 16 March 2020 and replaces Christopher Woolard as he steps into the role of Interim Chief...
Lucy HadrillFCA writes to credit brokers
The FCA wrote to credit brokers on 13 February 2020 identifying the key drivers of harm within the credit broking portfolio. These include:- failure to understand regulatory requirements; poor oversight of staff and...
New appointments to the FCA Board
HM Treasury has confirmed the appointments of Jeannette Lichner and Bernadette Conroy to the FCA Board. The new NEDs will each serve three-year terms beginning on 1 April and 1 August 2020 respectively.
PRA issues bans following failure of Enterprise the Business Credit Union Ltd (EBCU)
The PRA has banned two former EBCU directors from the financial services industry for their part in the failure of the company, which held £7m in savings for its 1,900 members. EBCU entered into administration in 2015...
FCA writes strategy letter to platforms
FCA’s latest portfolio strategy letter to CEOs has been sent to platforms. It starts by making the point that it expects firms will have used the SMCR to ensure clear accountability within senior management and...
ESMA takes action on suitability
ESMA is launching a common supervisory action with national authorities on the application of the MiFID 2 suitability rules. It feels it needs to gauge how intermediaries have been applying the requirement and help in...
FCA updates on skilled persons figures
FCA has published its latest figures on the numbers of skilled persons reports it has commissioned. During Q3 of 2019/2020 it commissioned 10 – of which 5 related to wholesale financial markets, 2 each to retail...
FCA writes strategy letter to platforms
FCA’s latest portfolio strategy letter to CEOs has been sent to platforms. It starts by making the point that it expects firms will have used the SMCR to ensure clear accountability within senior management and...
Christopher Woolard new FCA Interim Chief
Christopher Woolard has been appointed as Interim Chief Executive of the FCA once Andrew Bailey leaves to become Governor of the BoE.
FCA updates on asset management supervisory strategies
FCA has: written a Dear CEO letter about its asset management supervision strategy. The letter outlines FCA’s view of the key causes of harm asset managers can post to their customers or the markets in which they...
EBA updates its guidelines on fraud reporting under PSD2
The European Banking Authority (EBA) has published amendments to its 2018 guidelines on fraud reporting under the revised Payment Services Directive (PSD2). The amendments: introduce two new data fields for reporting...
EBA finds “identified staff” RTS working well
EBA has conducted a peer review of how national regulators have applied its RTS on the criteria for identifying staff whose professional activities have a material impact on an institution’s risk profile. The...
Duty of Care Bill progresses in Lords
The Financial Services (Duty of Care) Bill, the Private Members’ Bill to require FCA to make rules requiring authorised firms to owe a duty of care to consumers in their regulated activities, and originally...
Up next from FCA
FCA plans a number of important publications during Q1 2020 including: consultation on exit fees in investment platforms and comparable firms potential policy statement on general insurance value reporting measures and...
FCA writes to boards on personal and commercial line harm
FCA has written to the Boards of Directors of insurers setting out its views on the key risks of harm that personal and commercial lines insurers can post to their customers and the markets. It is telling firms about...
FCA writes to insurance CEOs on non-financial misconduct
FCA has written to the CEOs of wholesale general insurance firms reminding them of the importance of high standards of culture and conduct throughout their business. It expects CEOs to identify what drives behaviour...
PRA increases scrutiny of Lloyd’s of London over whistleblowing issues
The PRA has announced that they have temporarily increased their supervision of Lloyd’s of London in relation to their whistleblowing processes. This results from the notification to the PRA by the Society of...
Amy Rose-McMullenEVENT: Retail Banking Mixer
Bringing together professionals in the insurance, banking and other financial services sectors, we will be hosting the first of our quarterly RETAIL BANKING MIXERS at our Edinburgh office on 9th January from 4pm –...
Extension of the Senior Managers and Certification Regime comes into force
The FCA has extended the Senior Managers and Certification Regime (SM&CR) to solo-regulated firms, including senior managers and certification staff in those firms. The SM&CR already applies to the banking and...
Investment firm legislation in OJEU
The Directive and Regulation making changes to existing laws on prudential requirements for, and supervision of, investment firms, have been published in the Official Journal. The legislation makes several significant...
Risk management guidance published by professional bodies association
The Risk Coalition, a UK association comprising not-for profit professional bodies and membership organisations and focusing on raising the standards of risk management, has published a guidance document for board risk...
Roseyna JahangirThe FCA publishes feedback on its ‘Duty of Care’ Discussion Paper
The FCA has published its Feedback Statement on its ‘A duty of care and potential alternative approaches’ Discussion Paper which summarises the feedback from respondents and sets out how the FCA plans to deal with the...
FCA alerts investment firms to new management body form
FCA has alerted firms to a new form that MiFID investment firms and optional exempt firms will need to use when submitting information to it in relation to non-SMF directors. The form will apply from 9 December and is...
FCA publishes IDD general good table
FCA has published on its website the IDD “general good” rules that apply to incoming firms. The table refers to the existing guidance in SUP 13A Annex 1, and notes that many parts of FCA’s rules apply...
FCA consults on SMCR for benchmark administrators
FCA is consulting on the practicalities of applying the SMCR to benchmark administrators – to whom the SMR will apply from 7 December 2020 (a year after the wider roll-out). The key proposals are that: all...
SMCR: They think it’s all over?…
We’ve written an article reviewing what solo-regulated firms should already have done to be ready for SMCR, but why they cannot take too much of a break.
Responsible Lending Changes Implementation Group meeting
Further to their last meeting, the FCA reported today that the responsible lending changes implementation group had met again on 25 October. This meeting which was held in advance of publication of the policy statement ...
Financial Inclusion
On Tuesday night, we hosted our first ever Talking Money event in partnership with the Scotsman newspaper in our Edinburgh office. The event focused on the topic of tackling financial exclusion in Scotland. The...
FCA publishes GI distribution chain guidance
FCA has published its finalised guidance for general insurance product manufacturers and distributors on the distribution chain. The guidance follows the findings from FCA’s thematic review in 2017 and 2018, and...
Bills not to progress due to election
Parliament has updated its webpages in respect of the Goods Mortgages Bill, the Pension Schemes Bill and the Financial Services Duty of Care Bill. The 2017-2019 Parliamentary Session was dissolved on 6 November ahead...
Up next from FCA
FCA’s latest Policy Development Update promises a number of publications before the end of the year, including: feedback on the Investment Platforms Market Study remedies; consultation on policy proposals for next...
PRA to use s166 for regulatory returns
PRA has written a Dear CEO letter to banks on the reliability of regulatory returns. The letter highlights the recommendations of the review into the Co-Op bank – specifically that PRA should consider introducing...
FCA makes new rules
FCA’s latest Handbook Notice summarises various instruments made at the end of September and October: the Overdrafts (Information and Tools) Instrument 2019 takes effect on various dates to 6 April 2020, and...
Duty of Care Bill starts Parliamentary passage
A Private Members’ Bill started in the House of Lords by Lord Sharkey has had its first reading. The Bill, the Financial Services Duty of Care Bill, proposes amending FSMA to require FCA to make rules requiring...
SMCR conversion notification – FCA webpage provides explanation
The FCA has published a new webpage setting out specific guidance for the solo-regulated firms that have to complete Form K as part of their preparation for the start of SMCR. The deadline for submission of Form K is...
FCA imposes £15.4m file for Principles breaches
The FCA has announced that it fined an interdealer broker, Tullett Prebon, £15.4 million, due to ‘serious’ breaches of: Principle 2, by virtue of failing to conduct their business with due skill, care and...
ESMA consults on MAR review
ESMA is consulting on its required review of MAR. Its paper looks at many issues including: whether to include spot FX within MAR; differing concepts of inside information and delayed disclosure of it; whether the...
Reminder: EBA Outsourcing Guidelines are in Force
We previously reported that the EBA had published its revision to the European Banking Supervisors’ 2006 Guidelines on outsourcing arrangements. The revised guidelines set out a framework for outsourcing by banks...
FCA makes new rules
FCA has published its latest Handbook Notice with new rules. Most of the changes are minor, and update terminology and cross-references. FCA is also making changes to: SYSC and SUP, including adding a new Annex to SUP...
FCA updates SMCR resources
FCA has updated its checklists for firms preparing for the SMCR. It has added some text about the submission of Form K. It has also added a section for sole traders to its guidance on conversion from the Approved...
FCA publishes Directory entry form
FCA has published forms and guidance for firms that need to submit data for the new Directory of certain individuals working for financial services firms. The guidance explains what FCA considers to be “customer...
FCA speaks on skimmers and scammers
Charles Randell has spoken on FCA’s commitment to the Economic Crime Plan and the importance of embedding fraud prevention in the development of new savings and investment policies. He encompassed within...
PRA writes to banks on AML risks
PRA has written a Dear CEO letter bringing banks’ attention to EBA’s opinion on the ML/TF risks in prudential supervision, and confirm it will continue to consider these concerns as part of its prudential...
BSB publishes regulatory references good practice guide
The Banking Standards Board has published its guidance on good practice for regulatory references. The guidance is based on the three key principles of proportionality, fairness and consistency. While the guidance was...
Michelle ChanceFCA updates on Remuneration Code expectations
FCA has written its annual letter to RemCo chairs of Level 1 firms. The letter sets out what FCA has found on accountability, ex-post risk adjustments and diversity and inclusion. The letter: notes the responsibilities...
ECB calls for step up in Brexit preparation
ECB is concerned that banks have not progressed as far with their Brexit planning as they had originally indicated they would. ECB notes that it considers the risks of a no-deal Brexit to the overall euro area financial...
FCA publishes SMCR stocktake report
FCA has published the findings of its review on how the SMCR has been embedded in the banking sector. It hopes banks and solo-regulated firms will find the conclusions of use and interest, although it notes the review...
FRC fines KPMG and individual over CASS reports
The Financial Reporting Council has fined KPMG Audit plc £3.5m (including a 30% reduction for it admitting the misconduct) and one of its (now) partners £52,500, reprimanded them, and imposed a requirement on the firm...
Market Watch focuses on insider dealing risks
The latest edition of FCA’s Market Watch focuses on FCA’s concerns on access to inside information, following the conviction of a former compliance officer for sharing information. FCA noted that Fabiana...
New FCA webpages on SMCR extension to FCA solo-regulated firms
The FCA has published two webpages with information for regarding the extension of the SMCR to solo-regulated firms. The first page published on 26 July includes a guide for firms, details of how the SMCR applies, a...
FCA publishes SMCR final rules
FCA has at last published its final rules on extending the SMCR to solo-regulated firms, including CMCs. It has, in the main, implemented the changes it consulted on in its consultation on “optimising” the...
FCA consults on vulnerable customer guidance
FCA has published a guidance consultation on what it considers the Principles require of firms in terms of fair treatment of vulnerable customers. It thinks firms have made big improvements generally, but now wants to...
Lending Standards Board confirms threshold increase for small businesses
The Lending Standards Board (LSB) has announced that from the Standards of Lending Practice for business customers are to apply to businesses with a turnover of up to £25 million, from the previous £6.5 million...
MiFID II compliance function consultation published
ESMA is consulting on draft guidelines regarding the compliance function under MiFID. The proposals build on the existing 2012 guidelines by, among other aspects, addressing the changes MiFID II made to the compliance...
ESMA warns CFD providers on undesirable practices
ESMA is still concerned about firms that market, distribute or sell CFDs to retail clients. It has now published a warning to them, saying it is particularly worried about: encouraging retail clients to ask to opt up to...
FCA updates on SMCR final rules
FCA has still not made its final rules on the SMCR. It cannot do so until Treasury has published the necessary commencement order. FCA says it has been working with Treasury on this, and has agreed with it a later...
FCA publishes annual report
FCA’s Annual Report and Accounts for 2018/19 lists its highlights from the past year, and appends several reports from specific business focuses. FCA notes that alongside deciding over 4,000 applications for...
Irish regulator fines bank for CRD IV failings
The Irish Central Bank has imposed a €5.9 million fine on Wells Fargo Bank International Unlimited Company for breaches of regulatory reporting and governance requirements under CRD IV, as implemented in Ireland. The...
EBA reports on POG guidance implementation
EBA has reported on how industry has implemented its Product Oversight and Governance arrangements guidelines. It found a mix of good and bad practices. Some of its criticisms were that: often the manufacturer’s...
FCA updates SMCR page
FCA has reminded solo-regulated firms that if they want to opt up to the Enhanced firm category, they must submit their Form K (which all Core and Enhanced firms must submit anyway) together with their Form O, by 24...
FCA confirms market code recognition
FCA has confirmed it is recognising the FX Global Code and the UK Money Markets Code. These are the first codes to be recognised under its new scheme. While FCA will not supervise firms or individuals directly against...
Bank fined £45.5 million for failure to share suspicions of fraud with FCA
The FCA has announced that Bank of Scotland has been fined £45,500,000 (reduced by 30% from what would have been a £65 million fine) for its failures to be open and cooperative with the regulator and thereby breaching...
CMA updates on loyalty penalty work
CMA has updated on its work on the loyalty penalty. It says key decisions are due shortly and that two enforcement cases are underway. It says it expects regulators to take strong action where they find problems and...
FCA consults on financial resources
FCA is consulting on the approach it takes to assessing adequate financial resources – and what it means by the term. The paper has been prompted by the levels of compensation FSCS has paid out relating to firms...
FCA consults on Gibraltar and SMCR Handbook changes
FCA’s latest quarterly consultation: proposes changes that will essentially apply the current rules for Gibraltar firms past October in the event of a hard Brexit. The status quo on rule application and fees will...
FCA tells CMCs what it expects
FCA has written a Dear CEO letter to CMCs who have temporary permissions telling them how it expects them to behave then making financial promotions or acting for their customers. There has been an increase in cases...
FCA Publish Final Rules on Loan-based and Investment-based Crowdfunding Platforms
On 4th June 2019, the FCA published its feedback to CP18/20 and its final rules on loan-based and investment-based crowdfunding platforms in Policy Statement PS19/14. The changes largely match the proposals within the...
Employer can rely on Tribunal view in F&P assessment
An article in our Employment Briefing highlights the case of Radia v Jefferies International Limited. Jefferies had relied on findings from the Employment Tribunal that an individual’s evidence in respect of a...
PRA and FCA impose £1.89m fine for outsourcing failures
The PRA and FCA have imposed a joint fine on Raphaels Bank following an investigation in to the cause and consequence of an IT incident in December 2015. The incident occurred by a failure of services provided by a sub...
FCA publishes asset management competition breach case study
FCA has published its decisions against 3 asset management firms that breached competition law. FIN reported on the breaches in February. The decisions are accompanied by a case study, which explains what the firms...
Fund umbrella providers come under fire
FCA has published the results of its review into how firms in the investment management sector that have Appointed Representatives comply with their regulatory obligations as principals. There are over 1000 ARs in the...
ECJ judgment means TUPE may apply on transfer of clients’ investments
In Dodič v Banka Koper and another C-194/18, the European Court of Justice (ECJ) had to decide whether the Acquired Rights Directive (ARD) applied where a stock market intermediary stopped providing services and gave...
BoE speaks on “stylish regulation”
Sam Woods has spoken on how UK financial regulation might look post-Brexit. He looked at the 6 principles of an effective regulatory framework and how the SMCR model of legislation can deliver them. robust prudential...
Inside FCA Podcast: Andrew Bailey on the Business Plan and future of regulation
On 14th May 2019, the FCA published a podcast interview with Andrew Bailey on the FCA’s Business Plan and future of regulation. Key topics can be summarised as follows:- Brexit – Brexit has affected the...
Treasury committee report on access to financial services
On 13 May 2019, the Treasury Committee published its 29th report on consumers’ access to financial services. The report urges financial services providers, the Government, and financial regulators to ensure...
FCA publishes undertaking on unfair contract term
On 9th May, the FCA published an undertaking by James Brearley & Sons Limited in relation to a term in their Services Terms and Conditions which allowed them to terminate their contract with their customers without...
FCA objects to Complaints Commissioner decision on inaccurate register entry
The Complaints Commissioner has told FCA to pay compensation to a consumer who lost money after investing with what they believed to the be UK operation of an Austrian firm but was in fact fraudsters who had cloned the...
FCA starts intergenerational finance debate
FCA has published a discussion paper on intergenerational differences, looking at the changing needs of financial services consumers depending on their age. It feels the time is right to reassess pre-conceptions about...
FCA calls for input on FAMR and RDR
FCA has called for feedback on its planned approach to reviewing the RDR and FAMR. The purpose of the review is to find out whether the two initiatives have succeeded in their objectives, focussing on what consumers...
FCA confirms miscellaneous new rules
FCA’s latest Handbook Notice confirms the following rule changes: to COBS 22 in relation to introducing a ban on selling, marketing and distributing binary options to retail customers, which already took effect...
Andrew Bailey looks at the future of financial conduct regulation
On 23rd April, Andrew Bailey, Chief Executive of the FCA, released a statement on the future of financial conduct regulation. He used a four lens approach when looking at conduct regulation. These can be summarised as:...
FCA publishes enforcement and supervision ‘Approach’ documents
Following consultations in March 2018, the FCA has published its ‘Approach to Supervision‘ and ‘Approach to Enforcement‘ papers. The Supervision paper describes the FCA’s role in promoting...
FCA publishes PFOF findings
FCA has published an update to its Market Watch item on payment for order flow. It has now carried out a review of 15 firms, to check how they monitor compliance with FCA requirements around conflicts, inducements and...
FCA prioritises culture, customers and crime prevention
FCA’s Business Plan for 2019/2020 holds few surprises. It highlights 4 ongoing cross-sector priorities and three additional longer-term priorities. FCA will focus on: culture and governance, not least in SMCR...
FCA publish feedback statement on duty of care
On 23rd April, the FCA published Feedback Statement FS19/2 on its summary of responses and next steps in relation to a duty of care and potential alternative approaches. The statement will be followed up by a further...
Wholesale brokers ignore Dear CEO letter at their peril
FCA has written a Dear CEO letter to wholesale brokers setting out its thoughts on the key harms the sector poses. The letter explains that MiFID 2 and MAR have significantly raised expectations on market participants...