Regulation round-up June 2018

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

June 2018 Quick Links


Introduction: Nisha Arora, Director of Market Intelligence, Data and Analysis

Financial Lives of consumers across the UK – our new report

We are committed to serving the public interest by improving how financial markets function and how firms conduct their business. Financial products and services play a fundamental role in individuals’ lives. To make sure that consumers enjoy an appropriate level of protection, we need to understand consumers’ needs and experiences of financial services. 

This is why we set up the Financial Lives Survey, a large-scale survey of UK adults. It adds a substantial new source of evidence to our understanding of consumers in the retail financial markets we regulate: about the products they buy, their experiences of financial services providers, their financial situations and their attitudes towards managing their money.

Last October we published our initial report, ‘Understanding the financial lives of UK adults, which analysed results primarily by age. 

Our latest report analyses the data geographically. This report provides a unique perspective of the survey results across the 4 nations of the UK, the 9 regions of England, and by rural and urban areas.

As a UK-wide regulator, we serve consumers wherever they live in the UK, and we want to understand how people in different areas experience and respond to financial services and how their experiences may differ.

There is a wealth of information in this report and the accompanying data set and I encourage industry and others to use it.

I hope you find this latest report interesting and that it stimulates further research and discussion.


Hot topics

Claims management consultation is open

On 5 June, we published our proposals outlining how we will regulate claims management companies (CMCs) when regulation passes to the FCA on 1 April 2019. Our aim is that CMCs are trusted providers of high quality, good value services that help customers pursue legitimate claims for redress.  

The proposals outlined in our consultation are integral to achieving that aim, and include:

  • requiring CMCs to provide to potential customers a short summary document setting out important information about the services provided 
  • requiring CMCs that buy ‘lead lists’ from third parties to carry out due diligence around how those leads were obtained, 
  • asking CMCs to record all calls with customers, and to keep the recordings for a minimum of 12 months 
  • requiring firms to hold capital linked to the type of business they undertake 
  • a new requirement to protect client money

Our consultation sets out our proposed approach to authorising both existing and new CMCs including how temporary permissions will operate.

There will be opportunities to provide feedback on our proposals including various events for CMCs.

The deadline for providing feedback on our proposals is 3 August 2018. You can read the Consultation Paper here.

Simplified access to the GABRIEL system

We have made improvements to the log-in and password reset process for the GABRIEL reporting system. 

From the 11 June 2018, you will be able to:

  • Use your registered email address as your username.
  • Register all types of email domain addresses. This means you (as well as all of your users) can use an email address that doesn’t just end with .com or .co.uk.
  • Reset your password by using our new self-service tool. You will no longer have to answer the security questions.

We hope you’ll find these changes beneficial and access to the system much easier and quicker.

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Banks and Building Societies

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

The Bank of England is consulting on a new messaging standard for UK payments

Register here – the deadline for submissions is 18 July 2018.

The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.

To find out more about the proposals and to participate in the consultation please visit the Bank’s website.

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Financial Advisers

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

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Mortgage Advisers and Lenders

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

Live & Local 2018/19 events announced

Following the success of the 2017/18 programme, we are launching the first set of UK-wide events in the 2018/19 Live & Local programme.

We are continuing the popular monthly Q&A roundtable discussions where mortgage firms engage with a panel of FCA and industry representatives in an open, informal setting. Registration is now open for the roundtables taking place from September to December 2018. Visit our Live & Local webpages for more information.

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General Insurance Intermediaries and Insurers

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

The Bank of England is consulting on a new messaging standard

Register here – the deadline for submissions is 18 July 2018.

The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.

To find out more about the proposals and to participate in the consultation please visit the Bank’s website.

Live & Local 2018/19 events announced

Following the success of the 2017/18 programme, we are launching the first set of UK-wide events in the 2018/19 Live & Local programme.

For general insurance firms, we are offering these events:

  • Interactive workshop on the extension of the Senior Managers and Certification Regime (SM&CR) and the Insurance Distribution Directive (IDD)
  • Q&A roundtable discussions where general insurance firms engage with a panel of FCA and industry representatives in an open, informal setting.

Registration is now open for these events taking place from September to December 2018. Visit our Live & Local webpages for more information.

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Life insurance & Pension Providers

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

The Bank of England is consulting on a new messaging standard

Register here – the deadline for submissions is 18 July 2018.

The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.

To find out more about the proposals and to participate in the consultation please visit the Bank’s website.

FCA response to Law Commission recommendations on pension funds and social investment

The Government has published a response to the Law Commission’s (LC) report on pension funds and social investment. We contributed to the document with our response to recommendations that we consider:

  • Rule changes to require Independent Governance Committees (IGCs) to report on their firm’s policies on how they evaluate long-term investment risks.
  • Guidance for contract-based pension providers on considering financial and non-financial factors when making investment decisions.
  • Guidance on the types of investments that can be made by unit-linked funds (our permitted links rules) to clarify that these are consistent with the inclusion of an element of social impact investing.

We have carefully considered the LC’s recommendations. We aim to consult on rule changes by the first quarter of 2019 requiring IGCs to report on their firm’s policies on environmental, social and governance (ESG) issues, including climate change; on members’ ethical concerns; and on stewardship. At the same time, we will also consult on introducing related guidance for providers of workplace personal pension schemes on considering financial and non-financial factors when making investment decisions. We are waiting until early 2019 so that we can consult on a single package of rule changes affecting IGC.

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Wealth Managers & Private Banks

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

The Bank of England is consulting on a new messaging standard

Register here – the deadline for submissions is 18 July 2018.

The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.

To find out more about the proposals and to participate in the consultation please visit the Bank’s website.

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Investment Managers & Stockbrokers

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

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Consumer Credit

High-Cost Credit

We published 2 consultation papers on 31 May, setting out proposals for changes in the markets for overdrafts, rent-to-own, home-collected credit and catalogue and store cards. We also set out for discussion possible proposals that we are considering around fundamental changes to the way banks operate and charge for overdrafts, and a possible cap on prices for rent-to-own products. 

We welcome comments on the discussion questions on rent-to-own pricing by 13 July 2018, and on all the consultation proposals and the discussion questions on overdrafts (pricing intervention and repeat use) by 31 August 2018 – follow the link for the addresses to send comments to.

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Credit Unions

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].

The Bank of England is consulting on a new messaging standard

Register here – the deadline for submissions is 18 July 2018.

The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.

To find out more about the proposals and to participate in the consultation please visit the Bank’s website.

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Fintech & Innovative Businesses

Digital regulatory reporting

We are working with the Bank of England on 6 month pilots to build upon the Proof of Concept developed at our November TechSprint on digital regulatory reporting. The pilots will evaluate the feasibility of scaling the work from the TechSprint considering 2 use cases. One will focus on retail reporting and the other on wholesale reporting. Any financial services firm that wishes to participate in either of the pilots will need to help with resourcing. However, transparency is an integral part of the pilots and we welcome and encourage input from across the industry. All findings from the pilots will be published and the intended output will be open source. We will provide opportunities for firms to provide feedback on the direction of the pilots as they progress. For further information, including on how to participate in the pilots, please email [email protected].​​​​​​​

The Bank of England is consulting on a new messaging standard

Register here – the deadline for submissions is 18 July 2018.

The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.

To find out more about the proposals and to participate in the consultation please visit the Bank’s website.

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Payment Service Providers

Regional Live & Local events for payments services firms

As part of the Live & Local 2018/19 programme, we have added events in London, Birmingham and Manchester tailored for non-bank payment services firms. These ‘introduction to FCA Payments Supervision’ events will provide clarity on our role and expectations, and our supervisory approach. These events will also offer you an opportunity to ask us questions and meet our Payments Department.

The events take place from September to November 2018. Dates, locations and registration link are available on the Live & Local webpage.

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News and Publications

Live & Local 2018/19 events programme announced

Continuing our successful Live & Local events programme that began in April 2016, we are now launching our 2018/19 programme. From September 2018, we will be travelling across the UK with a new series of events for regulated firms.

The first set of events will take place September to December 2018. This year, we have added events for non-bank payment services firms in addition to events for general insurance and mortgage firms.

Visit our Live & Local webpages for dates, locations and registration links.

2018/2019 fees and levies – register for online invoicing

We will be invoicing firms for their annual fees and levies from early July to mid September. Most firms are now registered for online invoicing. If you haven’t registered for online invoicing please email our fees team [email protected]g.uk before July.

Operational Resilience

The operational resilience of firms is a priority in the FCA’s 2018/19 Business Plan. Over the coming months, we will be increasing our supervisory focus on the highest impact firms and carrying out focused thematic work with ‘lower impact’ firms. We will also engage widely with the industry to:

  • explain why operational resilience matters to us
  • remind firms of our current requirements and expectations
  • generate debate about how together we may strengthen firm’s operational resilience, minimise disruption to the business services that firms provide, and minimise the harm caused by disruptive events 

We plan to publish a Discussion Paper, jointly with the Bank of England and the Prudential Regulation Authority, about these matters in July.

Data Bulletin – June 2018

We have published the latest issue of the Data Bulletin. The bulletin focuses on new analysis of the retail intermediary sector based on the data firms have submitted to us via the Retail Mediation Activities Return (RMAR). The RMAR, is submitted by approximately 12,000 intermediary firms that each year help millions of consumers to access key financial products –mortgages, insurance policies, and retail investment products. 

We have published data from the RMAR since 2016 and hope that you find them a useful source of insight into the retail intermediary sector. In response to feedback from users of the data, we have added some new analysis sections. This edition provides an update of revenue trends to 2017 and analysis of activities and information on advice and charges for the last full financial year. Our new analysis includes a focus on capital resource requirements and professional indemnity insurance (PII) premiums.

Cyber infographic

We have published a new infographic on the basics of network security. It is designed to help firms, particularly smaller businesses, to become more resilient to cyber attacks.

We want to help the UK remain a safe place to do business, and a key part of that is helping your organisations to become more cyber resilient. We published our first guide on cyber security last year, and our new infographic expands on the good practice points we raised there.

Find out more by visiting our cyber resilience webpage.

Launch of weekly News and Publications emails

We have launched our new News and Publications weekly emails service which is sent every Friday at 4pm. Firms, consumers and all stakeholders can now receive the latest news and publications published on our website for that week in a single email. Subscribe to these from either the News or Publications sections on our website.

EU withdrawal

All firms should be considering the impact of EU withdrawal on their activities and customers. This should be considered both in the event the UK leaves the EU in March 2019, and also the implications of a transitional period until December 2020, under which EU rules will continue to apply. 

As part of this, if your firm undertakes business in the EEA you should consider the legal basis on which this occurs. This includes whether your firm needs additional regulatory permissions in light of EU withdrawal and whether your customers need to be informed of any changes. You may also wish to discuss this with the relevant local regulator and/or seek legal advice, including foreign law advice.

We know that planning for EU withdrawal will be a major focus for many firms over the coming year and we will make every effort to keep you informed and updated. For regular updates, please see our EU withdrawal pages.

FCA response to Law Commission recommendations on pension funds and social investment

The Government has published a response to the Law Commission’s (LC) report on pension funds and social investment. We contributed to the document with our response to recommendations that we consider:

  • Rule changes to require Independent Governance Committees (IGCs) to report on their firm’s policies on how they evaluate long-term investment risks.
  • Guidance for contract-based pension providers on considering financial and non-financial factors when making investment decisions.
  • Guidance on the types of investments that can be made by unit-linked funds (our permitted links rules) to clarify that these are consistent with the inclusion of an element of social impact investing.

We have carefully considered the LC’s recommendations. We aim to consult on rule changes by the first quarter of 2019 requiring IGCs to report on their firm’s policies on environmental, social and governance (ESG) issues, including climate change; on members’ ethical concerns; and on stewardship. At the same time, we will also consult on introducing related guidance for providers of workplace personal pension schemes on considering financial and non-financial factors when making investment decisions. We are waiting until early 2019 so that we can consult on a single package of rule changes affecting IGCs.

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