On 1 April 2019 we will become the regulator of claims management companies (CMCs) that are set up or serving customers in England, Wales and Scotland.

Our consultation on how we propose to regulate CMCs is closed. We are considering all the feedback we have received and will publish final rules so that CMCs have time to prepare for the new standards. Read the Consultation Paper here.

We are now consulting on how we will apply the Senior Managers and Certification Regime (SM&CR) to your firm. The rules for SM&CR currently apply to banks and deposit takers and we are extending them to nearly all firms we regulate from December 2019. The SM&CR aims to ensure firms’ governance arrangements are transparent and sets clear expectations for the conduct of all financial services staff.  The consultation paper sets out the rules we are proposing to apply the SM&CR to your firm. All claims management companies should read our consultation. Please send us any feedback by 6 December.

The consultation on the FCA fees we propose to charge CMCs is now closed. Thank you for your feedback, which we are considering. We are funded by the firms we regulate through fees, and we aim to cover our costs in a way that is as fair and efficient as possible.

We proposed that CMCs will be required to pay their full periodic fee for 2019/20 when they register for temporary permission starting in January 2019 and an application fee when they apply for authorisation.

Periodic fees will then be payable annually for every year firms are authorised. The periodic fee will depend on the size of the firm’s business. Responsibility for considering complaints about CMCs will also transfer from the Legal Ombudsman (LeO) to the Financial Ombudsman Service, so we also set out proposals for recovering the associated transfer costs and the Financial Ombudsman Service’s ongoing costs.

You can read the fees consultation paper here. We plan to publish the final policy statement on fees in late 2018 or early 2019.

Being FCA Regulated

All firms applying for FCA authorisation must be able to demonstrate that they can meet, and will continue to meet, a set of minimum requirements. These are called our Threshold Conditions. They will also need to comply with the rules in our Handbook.

Find out more about Threshold Conditions in our Handbook.

All CMCs who want to carry on regulated claims management activity will need to be authorised by us. CMCs that are currently authorised by the Claims Management Regulator will not be automatically transferred to the FCA.

Firms we will regulate

The CMCs we will regulate include: sole traders, partnerships and other organisations such as incorporated companies. For more information and to find out if your firm needs to be regulated by us, please see the list of activities and sectors in our Consultation Paper.

Firms that don’t carry out financial services, are already authorised to carry out legal activities and are regulated by another authority, such as the Solicitors Regulation Authority, don’t need to apply to us. They will continue to be regulated by their current regulator.

Getting authorised

If you are currently authorised by the Claims Management Regulator and want to continue to provide claims management services under the FCA, there is a two-step process you need to complete:

  1. Register with us for temporary permission between 1 January and 31 March 2019 via Connect.
  2. Apply for full FCA authorisation.

First you will have to complete a registration form. We will then issue you with a Temporary Permission. CMCs that are not currently regulated but will become regulated by us, such as firms in Scotland, will also have to register for a Temporary Permission if they want to carry on offering claims management services. CMCs with Temporary Permission will be required to submit their application for full authorisation as outlined below, but registration will allow you to continue to act as a CMC while applying for full authorisation and until your application is determined.

CMCs that do not send us a completed registration form by 31 March 2019 will not be able to carry on regulated activity after that date.

There will be two application periods for applying for full FCA authorisation. When you have registered for Temporary Permission, we will tell you whether you need to submit your application for full authorisation in Window 1 (1 April – 31 May 2019), or Window 2 (1 June – 31 July 2019). The window will depend on what permissions you have applied for and, for some CMCs, whether you are currently regulated.

If your firm wants to start providing regulated claims management activity you will need to apply for authorisation. You can either apply to the Claims Management Regulator now and transfer to us, or apply directly to us for full authorisation from 1 April 2019. If you apply to us, we will not be able to give you a Temporary Permission but you will be able to apply for full authorisation at any time after 1 April 2019.

Timeline

Date

Activity

2015

The Government commissioned an independent review to examine the problems.

March 2016

Carol Brady published the final report of her independent review of claims management regulation.

23 April 2018

The Treasury opened a consultation on claims management secondary regulations.

10 May 2018

Financial Claims and Guidance Act received Royal Assent.

5 June 2018

Rules consultation published.

3 August 2018

Rules consultation closes.

10 July 2018

Fee cap for PPI claims.

20 August 2018

Fees consultation published.

22 October 2018 Fees consultation closes.

Q3 2018

SM&CR consultation for CMCs.

Q1 2019

CMCs will have to complete their form for Temporary Permission and pay the fees by the end of Q1 2019.

1 April 2019

Responsibility for the regulation of CMCs transfers to FCA.

CMCs need to comply with the FCA Handbook.

1 April – 31 May

Application period for financial services firms and currently unregulated CMCs.

1 June -31 July

Application period for all other CMCs.

29 August 2019

PPI complaints deadline.

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