Regulation round-up December 2017

Regulation round-up is our monthly email to all regulated firms, updating you on the latest news that affects your sector.

December 2017 Quick Links


Introduction: Andrew Bailey, Chief Executive

Following the publication of our Future Approach to Consumers, we have now published our Approach to Competition and Approach to Authorisation papers –  the next in the series of documents we committed to publishing in our Mission.

As part of our Mission, we committed to being more open and transparent about how we regulate and why we make our decisions in the way  we do. We want to ensure that our regulation evolves with financial services and does not  hold them back. So we are keen to understand how and when regulation can present unnecessary barriers to new firms entering the market.

These documents aim to broaden the debate about our regulation that we started in our Mission. We are seeking views from stakeholders on a number of key issues including whether there is a clear understanding of our guidance and approaches, if we are taking the correct steps and what more we could do.

Both the Approach documents are open for consultation until 12 March 2018 and the final Approach documents will be published next year.

Read more about our Approach to Competition and Approach to Authorisation

Hot topics

Senior Managers and Certification Regime

Individual accountability: Transitioning FCA firms and individuals to the Senior Managers & Certification Regime

We need your feedback on how we plan to move firms and individuals to the Senior Managers and Certification Regime (SM&CR).

Earlier this year, we consulted on extending the new regime to almost all regulated firms. We are now consulting on how we intend to move firms and individuals to the new regime.

For the majority of firms, we plan to automatically convert Approved Persons Regime (APR) approvals to Senior Management Functions. This means the majority of firms won’t need to submit anything to the FCA.

Our aim is to make conversion simple, clear and proportionate. To do this, we’ve proposed different approaches for different types of firms.

You can watch Jonathan Davidson talk about SM&CR and our approach to conversion for solo-regulated firms on our website.

Duty of Responsibility

We are also consulting on extending the ‘Duty of Responsibility’ to insurers and firms regulated only by the FCA. This currently applies to Senior Managers of banking firms.

Under the Duty of Responsibility, we can take action against the Senior Manager responsible where their firm has contravened an FCA requirement in their part of the business. We must show that the Senior Manager did not take reasonable steps to avoid it taking place or continuing.

Your views

To read the proposals and send us your views, click on the relevant consultation paper below:

The consultations close on 21 February 2018.

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News and publications

Payments made to FCA by credit card and American Express card

From 13 January 2018 we will stop charging for payments by credit card and American Express card. This implements an amendment to the Consumer Rights (Payment Surcharges) Regulations 2012 which will prohibit surcharges on consumer and personal cards. We will consult on changing our fees rules in April.


Banks and Building Societies

FCA publishes rules on current account service provision

We have published rules requiring providers of personal current accounts and business current accounts to provide better information about the quality of current account services they offer. Under the new rules, customers, comparison websites and the media will be able to find:

  • how and when services and helplines are available
  • contact details for 24 hour help
  • how long it takes to open a current account
  • how long it takes to have a debit card replaced
  • how often the firm has had to report major operational and security incidents
  • the level of complaints made against the firm

Web page update: Mortgage Lending Statistics (MLAR): Q3 2017 data

We have, alongside the Bank of England, published the latest Mortgage Lenders and Administrators Statistics covering the period up to the end of Q3 2017. We produce the joint Statistics on Mortgage Lending to maintain a complete picture of the regulated mortgage sector.

Data Bulletin 11

In addition to MLAR, we have published our eleventh Data Bulletin, which focuses on the latest trends in regulated mortgage lending over the last ten years.

MiFID II

MiFID II has been seven years in the making and on 3 January 2018 the new legislation will start to apply. It aims to produce a safer, more transparent, more responsible financial system, facilitate competition and restore investor confidence after the financial crisis. On 3 January 2018 we expect, in particular, firms to be acting within the permissions they have on that date and to have connected to our Market Data Processor, where the legislation requires them to report information directly to us.

Handbook rule changes

We have published the following instruments which take forward some items that we consulted on in CP17/19:

  • Financial Services Compensation Scheme (FSCS) (Extension of Scope to Recognised Investment Exchanges) Instrument 2017 to bring the activity of a recognised investment exchange (RIE) operating an multilateral trading facility (MTF) or organised trading facility (OTF) into the scope of the FSCS with a base cost contribution of £1,000 per year per recognised investment exchanges (RIE).
  • MiFID II (Deferred Matters) Instrument 2017 to address the consequential changes arising out of the implementation of MiFID II to the Prospectus Rules and Handbook Glossary and to implement the remaining proposed changes to DEPP and EG first outlined in CP17/8 and CP17/19.

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Financial Advisers

FCA Live & Local regional programme

Our series of regional events for retail investment firms continues into January 2018 with workshops on assessing suitability at two locations in London. Dates and venue details can be found on the Live & Local webpage.

MiFID II has been seven years in the making and on 3 January 2018 the new legislation will start to apply. It aims to produce a safer, more transparent, more responsible financial system, facilitate competition and restore investor confidence after the financial crisis. On 3 January 2018 we expect, in particular, firms to be acting within the permissions they have on that date and to have connected to our Market Data Processor, where the legislation requires them to report information directly to us.

MiFID II

MiFID II has been seven years in the making and on 3 January 2018 the new legislation will start to apply. It aims to produce a safer, more transparent, more responsible financial system, facilitate competition and restore investor confidence after the financial crisis. On 3 January 2018 we expect, in particular, firms to be acting within the permissions they have on that date and to have connected to our Market Data Processor where the legislation requires them to report information directly to us.

Handbook rule changes

We have published the following instruments which take forward some items that we consulted on in CP17/19:

  • Financial Services Compensation Scheme (FSCS) (Extension of Scope to Recognised Investment Exchanges) Instrument 2017 to bring the activity of a recognised investment exchange (RIE) operating an multilateral trading facility (MTF) or organised trading facility (OTF) into the scope of the FSCS with a base cost contribution of £1,000 per year per recognised investment exchanges (RIE).
  • MiFID II (Deferred Matters) Instrument 2017 to address the consequential changes arising out of the implementation of MiFID II to the Prospectus Rules and Handbook Glossary and to implement the remaining proposed changes to DEPP and EG first outlined in CP17/8 and CP17/19.

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Mortgage Advisers & Lenders

FCA Live & Local regional programme events in 2018

We are continuing our monthly interactive Q&A roundtable sessions aimed at regulated mortgage firms. At these sessions, attendees’ questions set the agenda and provide feedback directly to our senior management plus an industry expert. Details are available on the Live & local webpage. To make sure you are notified of future Live & Local regional events in 2018, sign up to email alerts using our Live & Local updates web form.

Web page update: Mortgage Lending Statistics (MLAR): Q3 2017 data

We have, alongside the Bank of England, published the latest Mortgage Lenders and Administrators Statistics covering the period up to the end of Q3 2017. We produce the joint Statistics on Mortgage Lending to maintain a complete picture of the regulated mortgage sector.

Data Bulletin 11

In addition to MLAR, we have published our eleventh Data Bulletin, which focuses on the latest trends in regulated mortgage lending over the last ten years.

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General Insurance Intermediaries & Insurers

FCA Live & Local regional programme events in 2018

We are continuing the series of interactive workshops on how firms can identify and prevent harm, and bi-monthly interactive Q&A roundtables with FCA and industry panel. Dates, locations, and registration details for the first set of 2018 events are on the Live & Local webpage.

More events will be added next year. To make sure you are notified of future Live & Local regional events, sign up to email alerts using our Live & Local updates web form.

FCA fines Bluefin £4m for misleading customers

On 6 December The FCA fined Bluefin Insurance Services Limited (Bluefin) £4,023,800 for having inadequate systems and controls and failing to provide information to its customers about Bluefin’s independence in a way that was clear, fair and not misleading. Read the full press release on our website.

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Life Insurance & Pension Providers

Success in reducing pension funds’ costs and charges

Actions taken by the FCA, the DWP and pension providers, together with Independent Governance Committees (IGCs) and trustees, have resulted in lower costs and charges to consumers on about £24.9bn in workplace pension schemes. Our joint work increases the prospect of a higher income in retirement for current and prospective members of such schemes.

A small number of providers are due to complete actions early next year. We have written to all providers that participated in our review setting out our expectation they will continue to ensure customers are not exposed to costs and charges that represent poor value for money.

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Wealth Managers & Private Banks

MiFID II

MiFID II has been seven years in the making and on 3 January 2018 the new legislation will start to apply. It aims to produce a safer, more transparent, more responsible financial system, facilitate competition and restore investor confidence after the financial crisis. On 3 January 2018 we expect, in particular, firms to be acting within the permissions they have on that date and to have connected to our Market Data Processor, where the legislation requires them to report information directly to us.

Handbook rule changes

We have published the following instruments which take forward some items that we consulted on in CP17/19:

  • Financial Services Compensation Scheme (FSCS) (Extension of Scope to Recognised Investment Exchanges) Instrument 2017 to bring the activity of a recognised investment exchange (RIE) operating an multilateral trading facility (MTF) or organised trading facility (OTF) into the scope of the FSCS with a base cost contribution of £1,000 per year per recognised investment exchanges (RIE).
  • MiFID II (Deferred Matters) Instrument 2017 to address the consequential changes arising out of the implementation of MiFID II to the Prospectus Rules and Handbook Glossary and to implement the remaining proposed changes to DEPP and EG first outlined in CP17/8 and CP17/19.

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Investment Managers & Stockbrokers

MiFID II

MiFID II has been seven years in the making and on 3 January 2018 the new legislation will start to apply. It aims to produce a safer, more transparent, more responsible financial system, facilitate competition and restore investor confidence after the financial crisis. On 3 January 2018 we expect, in particular, firms to be acting within the permissions they have on that date and to have connected to our Market Data Processor where the legislation requires them to report information directly to us.

Handbook rule changes

We have published the following instruments which take forward some items that we consulted on in CP17/19:

  • Financial Services Compensation Scheme (FSCS) (Extension of Scope to Recognised Investment Exchanges) Instrument 2017 to bring the activity of a recognised investment exchange (RIE) operating an multilateral trading facility (MTF) or organised trading facility (OTF) into the scope of the FSCS with a base cost contribution of £1,000 per year per recognised investment exchanges (RIE).
  • MiFID II (Deferred Matters) Instrument 2017 to address the consequential changes arising out of the implementation of MiFID II to the Prospectus Rules and Handbook Glossary and to implement the remaining proposed changes to DEPP and EG first outlined in CP17/8 and CP17/19.

AIFMD reporting update

We have updated our Gabriel forms AIF001 and AIF002 with extra data validations to align with the latest ESMA technical guidance. The forms have been updated ahead of submissions due in January/February 2018 and will ensure the quality of the data is kept to a high standard. There are no changes to the reporting requirements or deadlines for submission. We will be shortly updating the AIFMD pages on the our web site with additional information on this.

Credit Card Market Study – Remedies consultation

We have published a new consultation on remedies to address the significant concerns that we have found in the UK credit card market.  Our initial consultation showed widespread support in principle for our proposed remedies and reducing the use of credit cards to service expensive longer-term borrowing. 

The new consultation includes a revised analysis of the costs to business of the proposed remedies, taking account of data omitted from our previous calculations.  The expected benefits to consumers remain considerably higher than the revised cost of the remedies.

The consultation also sets out how our thinking on the detail of the remedies has progressed following feedback that we have received. It gives interested parties the opportunity to submit new evidence or comments on these points.  The consultation will close on 25 January 2018 and we expect to confirm our remedies as early as possible in 2018.

High Cost Credit – summaries of round-tables

As part of our ongoing review of high-cost credit, we are looking at consumers’ alternatives to high-cost credit and how access to these alternatives can be improved. We have recently held three roundtables in London and Edinburgh to listen to consumer groups, industry bodies and others about their views and ideas.

We’ve now published a short summary of the key themes from these discussions, and will use this valuable insight to help us develop our proposals for action. 

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Fintech & Innovative Businesses

Regulatory sandbox

We have announced the firms that were successful in their applications to test in the third cohort of the regulatory sandbox. The sandbox allows firms to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place. It is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers.

We are also now accepting applications from firms to be part of our fourth sandbox phase. Firms have until 31 January 2018 to submit their applications. The eligibility criteria, application form and instructions on how to apply are available on the regulatory sandbox pages on our website. We are keen to get applications from firms of all sizes.

FCA publishes information for consumers using Account Information Services and Payment Information Services

The law is changing. Following the introduction of the EU Payment Services Directive (PSD2) from 13 January 2018, online services that customers allow to access their account data or make payments will be regulated by the FCA.

We have today published details on our website of how customers of these services can protect themselves and what to do if things go wrong.

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