Regulation round-up May 2018

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

May 2018 Quick Links


Introduction: Nausicaa Delfras, Executive Director of International

This is the first of what I expect will be many updates in my new role as Executive Director of International. We are working to enable a smooth transition on EU withdrawal, with reference to our statutory objectives of consumer protection, market integrity and competition. This includes ensuring there is a robust regulatory system on the day the UK leaves the EU, and that markets function well during and beyond exit day.  

To do this, we are working with firms to understand their plans for future operations and the potential impacts on their activities and customers.  

For firms and funds currently passporting into the UK, there is no need to apply for authorisation at this stage, due to the agreement on an implementation period and the Government’s commitment to providing for a Temporary Permission Regime as a backstop.

However, all firms should be considering the impact of EU withdrawal on their activities and customers, 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, firms that undertake business in the EEA should consider the legal basis on which this occurs, including whether they need additional regulatory permissions in light of EU withdrawal and whether their customers need to be informed of any changes. They 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 refer to our dedicated pages.


Hot topics

Interim report on the mortgage market

We published our interim report which sets out our provisional view on the way competition works in the mortgages market and how we would like the market to develop. 

Our interim report finds that competition in the mortgage market is working well for many people. However, we have also identified a number of ways in which the market could work better for some people. Our proposals are particularly aimed at helping customers find the best-priced suitable mortgage deal. The FCA also wants to help longstanding borrowers who are currently unable to switch to a better deal, often referred to as ‘mortgage prisoners’.

We are consulting on our interim findings and proposed remedies and we want to engage with a wide range of market participants. The report includes details on how you can give us your feedback. We intend to publish a final report around the end of the year and will consult on any specific changes required to our rules.

Find out more about how we conduct market studies.

FCA's move to Stratford

We are moving offices over the summer from Canary Wharf to Stratford. Our registered address will change on 1 July 2018 to: Stratford

Financial Conduct Authority
12 Endeavour Square
London
E20 1JN 

The FCA’s change of address was referred to in Consultation Paper 18/6, and the related Handbook Feedback Notice and Instrument of changes

Please ensure you include our correct address in any communications with your customers. Please also take steps to replace any printed material that refers to our current address so as to include our new address as soon as reasonably practicable. 

If you have a meeting at our offices during our move please speak to your FCA contact to confirm which address it is being held at.

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Banks and Building Societies

Payment Accounts Directive

As part of our work on the implementation of the Payment Accounts Directive (PAD), we have published the final UK linked services list. It explains how we have integrated the EU standardised terminology into the UK provisional list to form the UK final linked services list.

From 31 October 2018, payment service providers that offer payment accounts are required to use the terminology in their contractual, commercial and marketing information and make available a glossary of terms.

From 31 October 2018, providers will also be required to provide a pre-contractual fee information document (FID) and an annual statement of fees (SoF). Further information can be found in Delegated Regulations published by the European Commission, which can be found here: FID and SoF.

5 Conduct Questions – second feedback report

This month, we’ve published our second 5 Conduct Questions feedback report. It focuses on how banks can encourage people in front, middle and back office, and control and support functions, to be responsible for managing the conduct of their business. 

Our report summarises what we’ve been told by the firms, with examples of what worked well and what didn’t. We encourage everyone in the wholesale sector to look at the report.

The 5 Conduct Questions were introduced in 2015, as a key component of the supervision programme for Wholesale Banking. Since then, leading wholesale banking firms have invested substantial efforts in change programmes related to conduct and culture.

The Bank of England is consulting on a new messaging standard

The UK payments industry is moving to the global standard for payments messaging: ISO 20022. This standard creates a common language for payments data across the world. 

In early June the Bank will consult on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to ISO 20022 for CHAPS payments.

For more information, or to register your organisation, please email [email protected] or visit the Bank’s website.

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Financial Advisers

PS on retiring FG 12/15 and FG 14/1

On 11 May, we published PS 18/10 on retiring FG 12/15 and FG 14/1 which related to old rules on describing advice services, and inducements, respectively.

PS 18/10 provides important information for any firm which has previously used FG 12/15 or FG 14/1. 

PS 18/10 concludes the consultation process we launched (as part of PS/17/25) in December 2017 on retiring the 2 pieces of guidance. We considered that both pieces of guidance had been largely superseded by recent changes to our rules including the re-cast Markets in Financial Instruments Directive (MiFID II), which came into effect on 3 January 2018. 

PS 18/10 summarises feedback from the consultation. It explains that we have retired both pieces of guidance, and that we are not providing any further guidance or clarification on the new rules at this time.

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Mortgage Advisers and Lenders

FCA Live & Local regional programme continues

Our current series of interactive Q&A roundtable discussions ends in Belfast on 6 June. We will be joined on the panel by the Financial Ombudsman Service. 

Event and registration details are on the Live & Local webpage

Additional events may be announced later this year. To be notified of future Live & Local events across the UK, sign up to email alerts using our Live & Local updates web form.

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General Insurance Intermediaries and Insurers

FCA Live & Local regional programme continues

Our current series of events for general insurance firms will end in July. Remaining events are 3 interactive workshops on how firms can identify and prevent harm:

  • 23 May in Gloucestershire
  • 21 June in Norwich
  • 10 July in London

Dates, locations and registration details for these events are on the Live & Local webpage

Events for the 2018-19 programme will be announced in the coming months. To be notified of future Live & Local events across the UK, sign up to email alerts using our Live & Local updates web form.

The Bank of England is consulting on a new messaging standard

The UK payments industry is moving to the global standard for payments messaging: ISO 20022. This standard creates a common language for payments data across the world. 

In early June the Bank will consult on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to ISO 20022 for CHAPS payments.

For more information, or to register your organisation, please email [email protected] or visit the Bank’s website.

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Life insurance & Pension Providers

The Bank of England is consulting on a new messaging standard

The UK payments industry is moving to the global standard for payments messaging: ISO 20022. This standard creates a common language for payments data across the world. 

In early June the Bank will consult on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to ISO 20022 for CHAPS payments.

For more information, or to register your organisation, please email [email protected] or visit the Bank’s website.

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Wealth Managers & Private Banks

The Bank of England is consulting on a new messaging standard

The UK payments industry is moving to the global standard for payments messaging: ISO 20022. This standard creates a common language for payments data across the world. 

In early June the Bank will consult on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to ISO 20022 for CHAPS payments.

For more information, or to register your organisation, please email [email protected] or visit the Bank’s website.

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Investment Managers & Stockbrokers

5 Conduct Questions – second feedback report

This month, we’ve published our second 5 Conduct Questions feedback report. It focuses on how banks can encourage people in front, middle and back office, and control and support functions, to be responsible for managing the conduct of their business. 

Our report summarises what we’ve been told by the firms, with examples of what worked well and what didn’t. We encourage everyone in the wholesale sector to look at the report.

The 5 Conduct Questions were introduced in 2015, as a key component of the supervision programme for Wholesale Banking. Since then, leading wholesale banking firms have invested substantial efforts in change programmes related to conduct and culture.

Asset Management Authorisation Hub

We’re expanding the Asset Management Authorisation Hub to give additional information for the pre and post authorisation process. 

Since launching the Hub, in October 2017, we have been offering firms access to a dedicated web portal, weekly pre-application meetings, a named case officer and more support when transitioning from authorisation to supervision.  

Now we’re offering interactive flowcharts (eg to visualise the various authorisation options under AIFMD), a navigator that determines a firm’s prudential category, an online booking system for pre-application meetings and the announcement of our first event on Patient Capital in the autumn this year.  

The Hub seeks to maintain high standards for firms seeking to come into the marketplace and encourage competition. It aims to do this by reducing unnecessary regulatory barriers in establishing and running an asset management firm in the UK. Specifically it aims to: 

  • clarify expectations and support firms with better guidance on regulations and processes
  • make information easier to access
  • foster a more personalised engagement between the FCA and market entrants

We will roll out further phases of the Hub towards the end of this year.

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Consumer Credit

Information Sheets: Consumer Credit

We recently published new versions of information sheets prepared under section 86A of the Consumer Credit Act 1974.  The new versions of the information sheets will become current 3 months after they were published on our website. Until 26 July 2018, firms should continue to use the current versions of the information sheets – those that became the current version on 13 April 2017. From 27 July 2018 firms must use the new versions.

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Credit Unions

The Bank of England is consulting on a new messaging standard

The UK payments industry is moving to the global standard for payments messaging: ISO 20022. This standard creates a common language for payments data across the world. 

In early June the Bank will consult on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to ISO 20022 for CHAPS payments.

For more information, or to register your organisation, please email [email protected].co.uk or visit the Bank’s website.

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Fintech & Innovative Businesses

The Bank of England is consulting on a new messaging standard

The UK payments industry is moving to the global standard for payments messaging: ISO 20022. This standard creates a common language for payments data across the world. 

In early June the Bank will consult on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to ISO 20022 for CHAPS payments.

For more information, or to register your organisation, please email [email protected] or visit the Bank’s website.

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EU Withdrawal

Passporting into the UK Survey

In our statement on EU withdrawal following the March European Council, we confirmed EEA firms and funds currently benefiting from an EU passport need not apply for authorisation in the UK at this stage. This followed HM Government’s continuing commitment to providing for a Temporary Permission Regime as a backstop, and the agreement on the terms of an implementation period. 

We also launched a short online survey to collect information from those EEA firms and funds who access the UK market via a passport. We encourage relevant firms to complete the survey, which should only take 15 minutes. The survey is open until the end of May. The information gathered will help inform and support our future EU withdrawal-related communications. 

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News and Publications

Five Conduct Questions

This month, we’ve published our second 5 Conduct Questions feedback report. It focuses on how banks can encourage people in front, middle and back office, and control and support functions, to be responsible for managing the conduct of their business.

Our report summarises what we’ve been told by the firms, with examples of what worked well and what didn’t. We encourage everyone in the wholesale sector to look at the report.

The 5 Conduct Questions were introduced in 2015, as a key component of the supervision programme for Wholesale Banking. Since then, leading wholesale banking firms have invested substantial efforts in change programmes related to conduct and culture.

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] before July.

Asset Management Conference

On Tuesday, 12 June 2018 we will host our Asset Management Conference. Our CEO Andrew Bailey will outline our priorities for the sector and business leaders and other stakeholders will discuss key trends, challenges and developments facing the industry. 

Asset managers have a crucial role to play in providing for the future financial well-being of millions of savers. Our vision is for a dynamic, competitive and innovative sector where firms compete on the value they deliver for investors 

Please visit the event website  to see our initial speaker line-up and to register your place

Fee: £435+VAT (£522).

Complaints data publication 2017 H2

On 19 April 2018, we published the latest data on the number of complaints reported by firms for the second half (H2) of 2017. This is the first full year’s worth of complaints data under the new rules which came into force on 30 June 2016. The complaints data are published every 6 months and this publication includes data for the second half of 2017 (for firm returns with a half-year period ending between 1 July and 31 December 2017).

Guidance consultation on unfair contract terms

We have published a guidance consultation on unfair contract terms. This publication consults on new guidance outlining factors financial services firms should consider under the Consumer Rights Act 2015 (CRA) when drafting and reviewing variation terms in their consumer contracts. This guidance, when final, should be read with the material already in the unfair contract terms library on the FCA website. The consultation is open until 7 September 2018.

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