 New platform to replace Gabriel and improve the way we collect data from firms
Welcome to this edition of Regulation Round-Up.
Data and technology are becoming increasingly important to financial markets and the way we regulate. We are pushing forward with a transformation programme that will harness the power of our data more effectively and efficiently: we’ll be using new technology and analytical techniques to improve how we regulate and operate in the future. We are working closely with colleagues at the Bank of England who have similar objectives and goals (including as expressed in its response to Huw van Steenis’ ‘Future of Finance’ report).
To perform well as a regulator, we need to collect data from you in line with your regulatory obligations. An integral part of our Data Strategy is improving the way we collect these data and we have begun work to create a new platform for our data collection systems to improve how we collect these data. This will replace our main regulatory data collection system Gabriel: Gabriel collects over 500,000 submissions annually, across 120,000 users and 52,000 firms.
Work is at an early stage. We want to implement an easy-to-use system that is efficient for you and can be adapted to our changing needs. We recognise moving to a new platform can initially bring additional tasks for users, and we will work with you during its development.
We are keen to get your feedback. If you use Gabriel please complete our online survey. We plan to publish a summary of the feedback later this year. We will keep you updated on our progress, survey feedback themes and our plans for our data collection systems.
Highlights of Intergenerational Difference Conference
On 2 July our all-day conference gave space for the industry, think tanks, government, regulators and academia to discuss the emerging generational financial needs and issues outlined in our Intergenerational Differences Discussion Paper. We:
- outlined our understanding of the issues different generations face
- brought together stakeholders to pinpoint issues that need a response
- identified specific action we can take to help the market meet these changing consumer needs.
Key highlights from the conference included two workshops:
- delegates discussed market-led and regulatory solutions to meet the challenging needs of individuals based on real-life case-studies.
- a panel discussion on next steps for the FCA and the industry to address these emerging challenges.
Our event wrap-up video outlines why intergenerational differences are a growing issue and why it is important the FCA look at these to ensure financial markets work well for all consumers in the UK.
We welcome your feedback on our Discussion Paper before 1 August 2019. Check our website to find out more.
FCA publishes Annual Report and Accounts 2018/19
We published our Annual Report and Accounts on 9 July 2019. It looks back on the key pieces of work the FCA has undertaken throughout 2018/19.
Highlights from this year include:
- our ongoing work to improve protection for users of high-cost credit
- our work preparing for EU Withdrawal
- our campaign to help people take action on PPI, ahead of the 29 August 2019 deadline
- our work to stop people becoming scam victims
- promoting innovation across the world, with the launch of the Global Financial Innovation Network.
We also published our Annual Anti-Money Laundering Report, Annual Competition Report, Annual Enforcement Performance Account, and Annual Diversity Report.
Business Continuity Planning – Multi-Firm review
We reviewed business continuity planning (BCP) in several small- and medium-sized retail banks, payments institutions and electronic money institutions. We found that firms often take steps to build resilience to prevent events from occurring. However, anticipating that events will occur and carrying out proper planning and testing will allow firms to be better prepared to respond to and recover from events.
We also assessed how firms are considering consumer harm and the proactive steps they take to identify and remediate.
More information on this review, including findings that we encourage firms to consider, is on our website.
Unfair terms – latest undertaking published under the Consumer Rights Act 2015 (CRA)
We have published an undertaking from ETA Services Ltd about an unclear term in its Cycle Insurance Policy. We had concerns that an exclusion term was not sufficiently transparent because it contradicted another term. As a result, consumers may have been confused about whether the policy covered them and whether they could make a claim. The firm fully co-operated in resolving our concerns.
We remind firms to ensure their contracts comply with the fairness and transparency requirements under the CRA and the Unfair Terms in Consumer Contracts Regulations. Read further information about our powers and other publications.
Employers’ Liability Insurance Tracing (ICOBS 8.4)
The timelines and method for insurance firms to submit their directors’ certificate and auditors’ reports (Employers’ Liability Register compliance return) to us have changed this year. Following our handbook notice in September 2018, firms must submit this return via an online form between 1 August and 31 August each year, starting this year. Firms submitting their return after this date will be charged a £250 late administration fee. Full details on how to access the online form are on our website.
Signposting to travel insurance for consumers with medical conditions CP
Some consumers with pre-existing medical conditions (PEMCs) are suffering harm because they are either overpaying for travel insurance, travelling without cover for their condition or cancelling travel plans because they cannot get cover for a condition.
Working alongside industry and consumer groups, we want to take action to make sure people with PEMCs get the right travel insurance at a fair price. We want insurance firms to signpost consumers to a directory of specialist travel insurance providers when:
- cover is declined due to the customer’s medical condition.
- cover is offered but excludes the PEMC, or
- an offer includes loaded premiums to cover the PEMC.
Send us your feedback on our proposals by 15 September 2019.
Action to improve pension transfer advice
We published the results of the data we received from firms carrying out Defined Benefit transfers and set out the next steps in our supervisory work.
We have repeatedly made clear our expectations of financial advisers and strengthened the rules on pension transfer advice. Despite this, too much advice we have seen to date is still not of an acceptable standard. We are concerned that firms are recommending too many customers transfer out.
We have already started visiting some firms. We will write to all firms where we have identified the potential for harm.
EU Benchmark Regulation
Under the Benchmark Regulation, benchmark administrators based in the EU, with users who are supervised entities based in the EU, have until 31 December 2019 to apply to become authorised. If they don’t apply by then, supervised entities will not be permitted to use those benchmarks in the EU after 31 December 2019.
Supervised entities will need to check the ESMA Register here to ensure their benchmark administrator is already on it – or, if not, contact them. They should also check their fallback plans are adequate in case they can no longer use their benchmarks.
Non-bank payment service providers – requirements for safeguarding of customer funds
In July, we published details of our Safeguarding multi-firm review of non-bank payment service providers’ safeguarding arrangements.
Safeguarding customer funds is a key consumer protection measure in the Electronic Money Regulations 2011 (EMRs) and Payment Services Regulations 2017 (PSRs). It is vital that all firms have appropriate and well-managed safeguarding arrangements to ensure that, if a firm becomes insolvent, it can return customers’ funds in full. Details of our findings and a letter to firms setting out our expectations are on our website.
REP017 Payments Fraud Reporting
E-money firms should be aware the REP017 Fraud Rate report covering Jan to June 2019 (H1) is now available for download & submission by end August. For small E-money institutions, we will publish a new version to collect H1 & H2 data in September. Firms must submit their data within two months of the end of the calendar year. For more information about this and how to submit a report see the FCA website.
Firms using Gabriel due to report from 1 January 2019 should submit their return using the form set out in SUP 16 Annex 27ED.
Is your firm prepared for Brexit?
The UK will leave the EU without an implementation period on 31 October 2019 unless a deal is approved or a further extension is agreed. We expect all firms to continue to plan for all scenarios, including a no-deal Brexit at the end of October 2019.
You should consider the impact of Brexit on your business. You should have plans in place to address any risks for your firm and any impact it could have for your customers.
Further details can be found here.
CMCs must act now on final authorisation deadline
The second authorisation deadline for claims management companies (CMCs) is 31 July.
Firms must apply for authorisation online using Connect by the deadline. This landing slot is for:
- CMCs that do financial services and product claims work, and lead generation for non-financial services/products claims.
- CMCs that only do lead generation (regardless of sector).
- CMCs operating in all other sectors.
Please provide all the information we require to process your application.
Firms that miss the deadline have 30 days to wind down their regulated claims management activity. They must not start, or offer to start, new claims during this period.
Client data – London & Capital Finance
We are aware that some CMCs have been offered the opportunity to buy data of clients of the failed London Capital & Finance (LC&F).
CMCs must satisfy themselves that they are able to process LC&F client data legally. We remind them of their obligations under CMCOB 2.2. Non-compliance may result in regulatory action. We will also consider this when assessing whether the CMC meets threshold conditions during the authorisation process.
Signposting to travel insurance for consumers with medical conditions CP
Some consumers with pre-existing medical conditions (PEMCs) are suffering harm because they are either overpaying for travel insurance, travelling without cover for their condition or cancelling travel plans because they cannot get cover for a condition.
Working alongside industry and consumer groups, we want to take action to make sure people with PEMCs get the right travel insurance at a fair price. We want insurance firms to signpost consumers to a directory of specialist travel insurance providers when:
- cover is declined due to the customer’s medical condition
- cover is offered but excludes the PEMC, or
- an offer includes loaded premiums to cover the PEMC.
Send us your feedback on our proposals by 15 September 2019.
Regulation of Cryptoasset activities
In the Government Economic Crime Plan, the Treasury announced that the FCA would become the supervisor for certain types of cryptoasset activities. The need to have an anti-money laundering regime for some types of cryptoasset activity is a requirement under the 5th Money Laundering Directive (5MLD).
These obligations will come into force on 10 January 2020. We are developing our approach and will publish details later this year. We will be engaging with representatives of the sector and other stakeholders as we finalise our plans for regulating the sector.
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