 Financial Conduct Authority sets out its priorities for 2019/20
We have published our Business Plan for 2019/20, which outlines our key priorities for the coming year.
As the UK finalises preparations to leave the European Union (EU), our immediate priority will remain supporting an orderly transition post-exit. We will also continue to play a leading role in shaping the global regulatory framework, working with other national regulators and international bodies.
The Business Plan outlines four ongoing cross-sector priorities:
- work on firms’ culture and governance, including extending the Senior Managers and Certification Regime to all firms
- ensuring the fair treatment of firms’ existing customers by monitoring firms’ practices, including the information they give prospective and current customers
- developing the work being done on operational resilience, which will play a vital role in protecting the UK’s financial system and
- combating financial crime and improving anti-money laundering practices, by enhancing the use of technology and data, as well as engaging with multiple agencies and government bodies
The plan also sets out 3 additional cross-sector priorities, which have longer time horizons:
- the future of regulation
- ensuring innovation and the use of data work in consumers’ interests
- examining the intergenerational challenge in financial services
Alongside the Business Plan, we have published our annual Fees Consultation Paper and our Research Agenda for the year.
Mortgages Market Study final report and proposed changes to responsible lending rules
We have published the Mortgages Market Study final report confirming that the market is working well in many respects, but there are also areas in which it falls short of the FCA’s vision.
To address these concerns, we have developed a package of remedies aiming at:
- seeking to speed up more widespread participation by lenders in innovative tools to more easily identify what mortgages customers qualify for
- a proposal for the Single Financial Guidance Body to extend its retirement adviser directory to include mortgage intermediaries to help customers make an informed choice of broker
- consulting on proposals to change mortgage advice rules to help remove potential barriers to innovation
- further analysis to understand more about those customers that do not switch mortgage to inform any necessary intervention
We’re also consulting on proposed changes to the responsible lending rules to help consumers who cannot switch to a more affordable mortgage, despite being up to date with their mortgage payments.
Our proposals would allow lenders to conduct a modified affordability assessment if the customer meets certain criteria. In another change, mortgage lenders would be unable to enter into a new mortgage contract with an eligible consumer unless they demonstrate that the new mortgage is more affordable than their current one. Lenders would be allowed to use this assessment for consumers who are up to date with payments on their existing mortgage and want to switch to a more affordable mortgage without borrowing more.
This consultation closes on 26 June 2019.
Investment platforms market study
We have published the Final Report for the Investment Platforms Market Study, which sets out our final findings and a package of measures to help consumers who invest through investment platforms more easily find and switch to the right one for them. The package includes a Consultation Paper on unit class switching and a discussion on exit fees in the retail investment distribution market.
Exit fees
The Final Report concludes that there is a strong case for addressing platform exit fees, and that we think a ban is likely to be more effective than a cap in removing this barrier to switching and increasing firm incentives to deliver better services.
The proposed restriction on exit fees would apply to platform service providers and to firms offering a comparable service to retail clients.
We encourage all firms in the retail investment distribution market to consider the discussion questions set out in the Consultation Paper. We are seeking views from the wider market about how a restriction could work, before consulting on any final rules.
Please send any responses to cp19-12@fca.org.uk or write to Clive Parker, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN by 14 June 2019.
Improving the switching process
We have also welcomed the progress industry is making to improve the switching process, most recently through their STAR initiative. We encourage firms not already involved in this initiative to consider taking part to achieve better outcomes for consumers.
Brexit delay update
The Government confirmed last week that the new legal default date for Brexit is 31 October 2019. Domestic legislation has been amended to confirm this.
If the EU Withdrawal Agreement is ratified before then, the UK will leave with a deal on the 1st of the following month. The UK must participate in European Parliament elections if the deal hasn’t been agreed by 22 May.
Firms should continue to prepare for a range of scenarios, including one in which the UK leaves without a deal. We will provide updates as necessary on our website and through other channels.
The Government confirmed last week that the new legal default date for Brexit is 31 October 2019. Domestic legislation has been amended to confirm this.
If the EU Withdrawal Agreement is ratified before then, the UK will leave with a deal on the 1st of the following month. The UK must participate in European Parliament elections if the deal hasn’t been agreed by 22 May.
Firms should continue to prepare for a range of scenarios, including one in which the UK leaves without a deal. We will provide updates as necessary on our website and through other channels.
Global AML & Financial Crime TechSprint
From 29 July to 2 August 2019 we will be holding a Global AML & Financial Crime TechSprint to explore the potential for new technologies to enhance information sharing between financial institutions, regulators and law enforcement across jurisdictions to detect and prevent financial crime. The TechSprint will be held in conjunction with fellow regulators Abu Dhabi Global Markets (ADGM), Australian Transaction Reports & Analytics Centre (AUSTRAC) and Monetary Authority Singapore (MAS), and in consultation with Europol. Please contact techsprints@fca.org.uk if you would like more information on how your firm can participate.
There is nothing to report from this area.
Live & Local 2018/19 events for regulated firms
We are continuing our series of monthly ‘Ask the regulator’ Q&A roundtable discussions for mortgage advisers and lenders across the UK to pose questions and provide feedback directly to a panel of senior FCA representatives and industry experts. The agenda for each event is determined by attendee questions and comments.
Registration details for remaining events in April, May and June are on our Live & Local webpage.
You can also sign up to our Live & Local email updates to get alerts for upcoming events.
Update on Access to Insurance
You can read an update and details of next steps on Access to Insurance on our website. We’ve met with the industry, trade bodies and others to discuss options to support people with pre-existing medical conditions who are looking for travel insurance. We will be developing our proposals and plan to consult before this summer.
General Insurance Distribution Chain
The General Insurance Distribution Chain report identified significant potential for harm to consumers arising from the product development and distribution approaches currently employed in some sectors of the GI market and by some GI firms.
Some firms need to significantly improve to meet IDD and SM&CR requirements.
Our non-Handbook guidance consultation details how we expect firms to interpret the rules in relation to the manufacture and distribution of GI products. Submit feedback by 9 July 2019.
We are willing to use the full range of our regulatory tools wherever we encounter issues because firms are failing to meet requirements.
Live & Local 2018/19 events for regulated firms
We are continuing our UK-wide programme of events aimed at general insurance intermediaries and insurers. Registration is open for remaining events in May and June:
- an interactive workshop on extending the Senior Managers and Certification Regime (SM&CR) and the Insurance Distribution Directive (IDD)
- ‘Ask the regulator’ Q&A roundtable discussions, where general insurance firms pose questions and provide feedback directly to a panel of FCA and industry representatives in an open, informal setting
Visit our Live & Local webpage for more information and to register.
Sign up to Live & Local email updates to get alerts for upcoming events.
New consultation on extending the remit of Independent Governance Committees
We have published a new consultation on extending the remit of Independent Governance Committees (IGCs), with two key proposals:
- To extend the remit of IGCs to report on pension provider firms’ policies on environmental, social and governance (ESG) considerations including climate change, member concerns, and stewardship, and clarifying for firms how they should take account of long-term risks and member concerns in investment decision-making.
- To extend the remit of IGCs to provide independent oversight of the value for money of investment pathways (following on from our work on the Retirement Outcomes Review).
Global AML & Financial Crime TechSprint
From 29 July to 2 August 2019 we will be holding a Global AML & Financial Crime TechSprint to explore the potential for new technologies to enhance information sharing between financial institutions, regulators and law enforcement across jurisdictions to detect and prevent financial crime. The TechSprint will be held in conjunction with fellow regulators Abu Dhabi Global Markets (ADGM), Australian Transaction Reports & Analytics Centre (AUSTRAC) and Monetary Authority Singapore (MAS), and in consultation with Europol. Please contact techsprints@fca.org.uk if you would like more information on how your firm can participate.
There is nothing to report from this area.
There is nothing to report from this area.
Global AML & Financial Crime TechSprint
From 29 July to 2 August 2019 we will be holding a Global AML & Financial Crime TechSprint to explore the potential for new technologies to enhance information sharing between financial institutions, regulators and law enforcement across jurisdictions to detect and prevent financial crime. The TechSprint will be held in conjunction with fellow regulators Abu Dhabi Global Markets (ADGM), Australian Transaction Reports & Analytics Centre (AUSTRAC) and Monetary Authority Singapore (MAS), and in consultation with Europol. Please contact techsprints@fca.org.uk if you would like more information on how your firm can participate.
Global AML & Financial Crime TechSprint
From 29 July to 2 August 2019 we will be holding a Global AML & Financial Crime TechSprint to explore the potential for new technologies to enhance information sharing between financial institutions, regulators and law enforcement across jurisdictions to detect and prevent financial crime. The TechSprint will be held in conjunction with fellow regulators Abu Dhabi Global Markets (ADGM), Australian Transaction Reports & Analytics Centre (AUSTRAC) and Monetary Authority Singapore (MAS), and in consultation with Europol. Please contact techsprints@fca.org.uk if you would like more information on how your firm can participate.
There is nothing to report from this area.
Firms operating in Italy: Brexit contingency legislation
The Italian Government has put in place contingency arrangements (including a legal Decree) in the event of the UK leaving the EU in the future without a transitional period in place.
The arrangements allow UK firms that have notified the Bank of Italy to continue to operate in Italy:
- while applying for the appropriate licenses, or
- to conduct an orderly winding up of their Italian operations
The specific requirements, templates to be used to notify electronically, deadlines, and the consequences of not notifying or being authorised are outlined on the Bank of Italy’s website.
FCA regulation starts
We’re nearing the end of the first month of claims management regulation and are working to authorise Claims Management Companies (CMCs) in the first landing slot, which lasts until 31 May 2019.
Don’t leave it to the last minute. CMCs can apply online using Connect, the same system they used to apply for temporary permission. CMCs that fail to apply for authorisation will have 30 days to wind down their business. They must not commence any new claims during this period and must explain to existing customers how to continue claims without their help.
Our website has more information.
New consultation on extending the remit of Independent Governance Committees
We have published a new consultation on extending the remit of Independent Governance Committees (IGCs), with two key proposals.
- To extend the remit of IGCs to report on pension provider firms’ policies on environmental, social and governance (ESG) considerations including climate change, member concerns, and stewardship, and clarifying for firms how they should take account of long-term risks and member concerns in investment decision-making.
- To extend the remit of IGCs to provide independent oversight of the value for money of investment pathways (following on from our work on the Retirement Outcomes Review).
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