 Yesterday, the Government confirmed that the date we will leave the EU has changed.
The Government has agreed with the EU that the earliest the UK will now leave the EU is 11pm on 12 April 2019.
We will continue to prepare for all scenarios, including the possibility the UK leaves the EU on 12 April without an agreement. While the change in date does give us all extra time to prepare, this is only a short delay. We will therefore continue to prepare at the same pace as before and expect firms to do the same.
For the most part, our expectations for firms remain the same. But, with one important exception: firms and funds wanting to enter the TPR now have until 11 April to notify us.
We have updated our website to reflect these recent changes and will continue to do so with any further developments. For the most up to date information, please refer to our Brexit webpages:
We appreciate that firms would all like certainty to aid their planning, we will continue to provide as much information as possible, as soon as possible.
FCA acts to address unclear and excessive motor finance costs
We have been looking at the motor finance market to ensure that it works well and to assess whether consumers are at risk of harm. We published interim findings in March 2018, and have since focused on issues relating to commission arrangements, pre-contract disclosures and affordability assessments. We published a final report on 4 March 2019, along with a press release.
We have found that the way some commission arrangements are operating may be leading to consumer harm on a potentially significant scale, with some customers paying substantially more for their motor finance because of the way lenders choose to remunerate their brokers.
In particular, we are concerned about the widespread use of commission models which link the broker commission to the customer interest rate and allow brokers wide discretion to set the interest rate. This gives rise to conflicts of interest and creates strong incentives for the broker to charge a higher interest rate.
Across the firms in our analysis (around 60% of the market) we estimate that commission models which allow broker discretion over the interest rate could be costing customers £300m more annually.
All firms acting as lenders or brokers in the motor finance sector should read this report and consider whether they need to review or amend their policies and procedures and associated systems and controls.
Senior Managers and Certification Regime: Preparing Statements of Responsibilities and Responsibilities Maps
On 8 March, we published guidance to help firms prepare for the Senior Managers and Certification Regime (SM&CR). The purpose of the guidance is to give FCA solo-regulated firms practical assistance and information on preparing Statements of Responsibilities (SoRs) and Responsibilities Maps. The guidance sets out the purpose of SoRs and Maps and outlines examples of good and poor practice. It also contains examples of Responsibilities Maps for two fictitious firms.
Under the SM&CR, all Senior Managers must have a Statement of Responsibilities and all enhanced firms must have a Responsibilities Map. A SoR should be clear for regulators, the Senior Manager and others in the firm to understand - and contain enough information to describe clearly what activities the Senior Manager is responsible and accountable for in the business. The guidance is designed to be read alongside the Guide for FCA solo-regulated firms.
The aim of the SM&CR is to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.
Solo-regulated firms should be preparing for SM&CR which comes into effect on 9 December 2019.
If you need more information, please visit our website and read our guide.
General Insurance complaints
General insurance firms need to ensure the way they deal with complaints is in line with FCA rules and principles - and that they are complying with DISP requirements. Our supervisory work has revealed that some firms are failing to consistently deliver fair outcomes for their customers when handling complaints.
The areas of improvement that we have identified include:
- Firms must apply the FCA definition of a complaint correctly. Some firms are dealing with complaints in breach of our DISP requirements, without issuing a summary resolution or a final response letter. This may prevent customers from accessing the formal complaint process - for example, the complaints time-limit rules, fair and prompt assessment of the complaint, and Ombudsman referral rights. And the complaint returns provided to the FCA will not be accurate.
- Capture and address all elements of each complaint.
- Ensure all complaints are investigated competently, diligently and impartially.
- Some firms need to improve the quality of final response letters issued to customers.
- Ensure the root causes of complaints are always captured. The action required to correct the root cause, action owners and dates for completion must be clear.
- Firms should take steps to ensure that their complaints processes are embedded by their outsourcers. They should have effective oversight of the quality of their outsourcers’ complaint handling, and management information to support this.
As part of our ongoing supervisory work, we will continue to monitor firms’ compliance and take action with individual firms where necessary.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Firms’ commitments in the lead-up to the 29 August 2019 deadline for new PPI complaints
In our recent report we described the action some firms have taken to remove any barriers to complaining for those customers who wish to make a PPI complaint. In the remaining period before the deadline, we ask all other firms who receive PPI complaints to consider taking the same action to ensure that:
- they have accessible, well-designed and well-resourced PPI checking and complaint handling processes that deliver prompt and accurate answers to consumers
- vulnerable consumers don’t experience obstacles/unfair outcomes when they try to make a checking enquiry/complaint
Any queries, please contact FCASupervision-ProjectsPPI@fca.org.uk
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Live & Local 2018/19 events
Our series of UK-wide interactive workshops on Defined Benefit pension transfers will conclude at the end of March. These are for representatives of regulated firms who are qualified to give Defined Benefit pension transfer advice and will:
- highlight the key points that firms should consider when operating in this market
- reiterate our expectations when transacting this type of business
- highlight our updated rules and guidance
- include an interactive case study to put into practice our expectations
Registration is open for workshops in Doncaster on 27 March and Newcastle on 28 March.
Sign up to our Live & Local email updates.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
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.
Registration details for events taking place to June 2019 can be found on our Live & Local webpage.
You may also sign up to our Live & Local email updates to be alerted to upcoming Live & Local events.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Wholesale Insurance Broker Market Study final report
We have published the Wholesale Insurance Broker Market Study final report, concluding that while there are improvements to be made, we have not found evidence of significant levels of harm that merit the introduction of intrusive remedies - we have therefore closed the market study.
As part of the study we analysed feedback to our Terms of Reference paper; responses to our data request; commissioned independent client research; and sent a survey to clients. We also had individual discussions with firms and other stakeholders and carried out a variety of analyses.
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 June’s events:
- Interactive workshop on the extension of 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 our Live & Local email updates to be alerted to upcoming Live & Local events.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Rent to Own
We have confirmed plans to introduce a price cap on the rent-to-own sector, to protect some of the most vulnerable consumers in the UK. The cap will be introduced from 1 April and will save consumers up to £22.7m a year. The cap restricts the cost of credit to 100% of the price of the goods, and requires firms to benchmark base prices against those charged by three mainstream retailers. We have committed to review the impact of the price cap in 2020.
Debt Management – Thematic Review
We have published our second thematic review of the debt management sector, looking at commercial and not-for-profit firms that provide debt advice and administer debt management plans. The review shows that most customers are getting better advice and outcomes than was previously the case, and firms that have focused their culture on what is best for their customers have made the biggest strides. However, there are still areas where firms must do better – particularly in identifying and helping vulnerable consumers. We encourage firms to look at our findings and consider the implications for their business.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
Directory Policy Statement
On 8 March, we published our policy statement on ‘the Directory’. We consulted (CP18/19) on proposals to introduce the Directory – a new public register for checking the details of key individuals working in financial services – last year. We received 500 responses to CP18/19 and around 99% of respondents were in favour of establishing the Directory, with many suggesting ways we could further improve our proposals. Firms subject to the certification regime will have to complete a ‘Directory person’s notification’ on Connect to provide the FCA with details of their Directory persons (eg non-executive directors etc). Solo-regulated firms will need to provide us with information on their Directory persons by December 2020.
Digital Regulatory Reporting
We have published the findings of the first phase of the Digital Regulatory Reporting (DRR) pilot which explores how firms and regulators could use technology to improve the current process of regulatory reporting. The FCA, the Bank of England and a group of regulated firms will be participating in a second phase of the pilot that aims to identify which regulatory reports are appropriate for a DRR solution and how best to create machine executable regulation. Firms interested in participating in the pilot or who would like more detail on aspects of the report should contact regtech@fca.org.uk.
FCA Insight Podcast
In the first FCA Insight podcast, recorded at FCA Innovate 2019, Nick Cook, Head of RegTech and Advanced Analytics, was joined by Ghela Boskovich, Founder of FemTech Global and Head of Regtech and FinTech Partnerships at Rainmaking Innovation, Teana Baker-Taylor, Executive Director at Global Digital Finance and Shruti Ajitsaria, Head of Fuse at Allen & Overy. In a wide ranging discussion, they cover our role in convening the AI ethics debate, why the time has come for global standards, and whether data can ever be ‘perfect’.
Cryptoasset consumer research
We have published two pieces of research looking at UK consumer attitudes to cryptoassets, such as Bitcoin and Ether. The research helps us understand potential harms from cryptoassets and ensure we are acting on evidence as we seek to protect consumers and market integrity. You can read the research here and find out more about our approach to cryptoassets here.
Payment Services Regulation Video Series
We published a series of videos on Payment Services regulation. These videos will introduce you to the FCA payments department, as well as who – and how – we supervise and authorise. They will give you an insight into upcoming regulatory updates and what payment services firms should look out for in 2019. Check our website to find out more.
Temporary Permissions Regime – change to notification deadline
Firms and funds now have until the end of 11 April 2019 to notify us they want to enter the Temporary Permissions Regime (TPR).
The TPR will allow EU firms and funds that currently passport into the UK to continue operating in the UK if we leave the EU with no deal, and passporting stops.
To enter the TPR, you need to notify using our Connect system by the end of 11 April 2019.
You can find out more about the TPR and how to submit a notification on our website.
MiFID IT systems update
The FCA will not switch over its IT systems to replace ESMA’s MiFID systems on the weekend of 30/31 March 2019. This is in line with the government announcement that the date for the UK leaving the EU has now moved from 29 March. This includes the planned switchover to FCA FIRDS and FCA FITRS.
The planned switchover, in the event of a no-deal exit, is now scheduled to take place on the weekend of 13/14 April with a go-live date of Monday 15 April 2019. Firms should continue to report to the FCA as they currently do until 11pm on Friday 12 April.
FCA Brexit Briefings
We hosted 2 briefings for regulated firms in preparation for the UK leaving the European Union. At these briefings, Nausicaa Delfas, Executive Director of International, explained how we have been preparing for Brexit and our expectations of firms. This was followed by a panel Q&A session to discuss firms' concerns.
You can watch the recordings from the briefings using the links below:
The information given in each briefing reflects our views at the time of recording. As there are further developments, our position may change.
Read our Brexit webpages for the latest information.
Preparing your firm for Brexit
At the end of February, we published updated information on preparing your firm for Brexit. This update included the latest information specific to:
Memorandums of Understanding (MOUs)
This month, we announced progress on two further MoUs.
In the first announcement, we said that we, along with the Bank of England and the Prudential Regulation Authority (PRA), had agreed MoUs with respect to UK and EU/EEA insurance companies. We have published further details about these on our website.
Last week, we announced that we had agreed a template MoU with the European Banking Authority, along the PRA. We now intend to move swiftly to sign bilateral MoUs.
These MoUs will support cross border supervision of firms and allow us to share information with our EU counterparts.
UK Benchmarks Register
To prepare for the possibility the UK leaves the EU without an implementation period, we have developed a new UK Benchmarks Register. The new Register will replace the ESMA Register for UK supervised users, and UK and third-country based benchmark administrators that want their benchmarks to be used in the UK.
Read the full details in the statement we published last week.
Regulation of claims management companies
On 1 April, we become the regulator of Claims Management Companies (CMCs) and are working full steam ahead to be ready, including communicating about the change to consumers.
We aim to drive up standards in the industry and boost consumer protection and professionalism. This will help to build trust and confidence in an industry whose reputation has been tarnished by misconduct by some firms.
This will include CMCs being subject to the Senior Managers and Certification Regime. We expect to publish a Policy Statement on this in the next month.
You can find more information on our website.
Register for temporary permission by the deadline
More than 560 claims management companies (CMCs) have registered for temporary permission. Those who haven’t should act now to avoid missing the deadline of 31 March. If you don’t apply in time, you will have to stop regulated claims management activities or face potential enforcement action, including a fine.
If you want to continue operating legally and haven’t registered for temporary permission yet, please do so as soon as possible. This allows your firm to continue trading while you go through the authorisation process which happens in two sessions - from April until the end of May and from June to the end of July.
Cyber Resilience Insights Report
We have published a document bringing together industry insights on cyber resilience Since 2017, we have brought together over 175 firms across different financial sectors to share information and ideas from their cyber experiences. We run these Cyber Coordination Groups (CCGs) with industry to help improve cyber security practices amongst members of the CCGs and their sectors.
Over the last year, the groups have been discussing and sharing practices, and we have set out those we consider to be beneficial to a wider audience. We encourage all firms to consider whether these insights may be useful to them.
2019/2020 fees and levies
Firms that are intending to cancel their permission and do not wish to be liable for next year’s annual fee (1 April 2019 – 31 March 2020) need to apply to cancel online, through Connect by 31 March 2019. If they do not they will be liable for the full annual fee.
Accessing old FSA.gov content
We will be turning off the FSA website over the next few months - please note, we have not updated the FSA website since 2013. Some links will be redirected to fca.org.uk.
To access old FSA.gov content, please go to the National Web Archives.
Wholesale Insurance Broker Market Study final report
We have published the Wholesale Insurance Broker Market Study final report, concluding that while there are improvements to be made, we have not found evidence of significant levels of harm that merit the introduction of intrusive remedies - we have therefore closed the market study.
As part of the study we analysed feedback to our Terms of Reference paper; responses to our data request; commissioned independent client research; and sent a survey to clients. We also had individual discussions with firms and other stakeholders and carried out a variety of analyses.
Finalising the Directory
On 8 March, we published our policy statement Finalising the Directory. We consulted (CP18/19) on proposals to introduce the Directory – a new public register for checking the details of key individuals working in financial services – last year.
We received 500 responses and around 99% of respondents were in favour of establishing the Directory, with many suggesting ways we could further improve our proposals.
Firms subject to the certification regime will have to complete a ‘Directory person’s notification’ on Connect to provide the FCA with details of their Directory persons (eg Non-executive directors etc). Solo-regulated firms will need to provide us with information on their Directory persons by December 2020.
Weekly News and Publications alerts
Subscribe to receive our weekly round-ups of news and publications published on the FCA website. Sent every Friday, the email covers our news items, including press releases and speeches, and publications, research and data, and notices from the week.
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