 Are you prepared for Brexit?
With the news dominated by Brexit, we continue to prepare for a full range of possible outcomes and scenarios. This includes continuing to prepare for the UK to leave the EU without an implementation period on 31 October 2019, unless a deal is approved or a further extension is agreed.
As our Chief Executive, Andrew Bailey, said in a recent speech ‘we have made considerable progress, but we do not underestimate the task ahead'.
So in last week’s special edition of Regulation round-up, we underlined that we expect all firms to continue to plan for all scenarios, including a no-deal Brexit at the end of October 2019. We urge all firms to consider the implications of a no-deal exit and finalise their preparations. You should have plans in place to address any risks for your firm and any impact it could have for your customers.
If you have further questions then please:
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Check our website for more information, which includes information on specific financial service sectors.
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Read our quick guide on preparing for Brexit.
- Call our Brexit information line with questions you have about preparing your firm on 0800 048 4255.
Building cyber resilience in your firm
Supporting the drive for cyber resilience in financial services continues to be one of our top priorities, and we believe it should be for you too. We want firms to be resilient to cyber-attacks. For smaller firms, we are highlighting some of our publications to help you when considering your cyber arrangements. Following the steps we outline in them could save you time, money and reputation. As well as helping protect your customers, these tips will help support customers to protect themselves.
We recommend you start with our infographic on cyber resilience, which gives tips on the foundations of good cyber security. It breaks down good practice into several key areas, giving you concrete actions to focus on, such as the importance of staff using strong passwords.
The second publication brings together insights on cyber resilience from across financial services. We’ve taken the best examples of good practice in firms that we think will help small and medium sized firms. We hope they will help you to consider where to prioritise your efforts.
And we’ll update you about cyber resilience in future editions of Regulation round-up.
Register for Connect
Register for Connect today – here’s how!
From January 2020, you will be required to use Connect to update and confirm your firm details on annual basis, in line with you firm’s Accounting Reference Date. Even If your firm details have not changed from the previous year, you will still need to log on to Connect and confirm that they are up to date. So, if your firm is not registered with Connect already, why wait?
Connect is the FCA’s online platform that allows you to submit applications and notifications, such as approved persons, appointed representatives and MiFID II notifications. You can also track the progress of your applications with the FCA 24 hours a day, online.
We will be emailing, calling and writing to firms to encourage them to register on Connect ahead of the Firm Detail rules change coming into force from January 2020.
If you need support to register and update your firm details, visit our website, watch our video guide or call 0300 500 0597.
We consulted on the changes to the Firm Detail rules and how firms could submit their information rules in December 2018.
Banks, building societies, credit unions and insurance companies can now submit data for new Directory
The data collection for the new Directory is open. Banks, building societies, credit unions and insurance companies (and their appointed representatives) must submit their data before 9 March 2020 using Connect. All other firms must submit between 9 December 2019 and 9 December 2020.
The new Directory will provide the clear, simple-to-access information firms need. It will also make it more difficult for unsuitable people to operate in the UK market.
Our website gives you clear instructions and guidance on how to submit your directory persons data.
Letter to Remuneration Committee Chairs
In August 2019, we wrote to the Remuneration Committee Chairs of Level 1 firms (deposit takers and investment firms with total assets exceeding £50bn). We have published the letter on our website to share our findings from the 2018/19 remuneration round with all firms. The findings cover accountability, post-event risk adjustments and diversity and inclusion, as well as explaining our approach for assessing the remuneration policies and practices of Level 1 firms in 2019/20.
The letter also sets out key remuneration elements of our ongoing work on transforming culture in financial services.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Proposed responsible lending changes – new implementation group
In March, we consulted on changes to our rules to help consumers who are up-to-date with payments, and not looking to borrow more, switch to a more affordable mortgage. We have set up an implementation group to consider some of the practical issues of making these changes. More information about this group, and the issues it is considering, is available on our website.
Live & Local 2019/20 events
Our new series of monthly Q&A roundtable discussions for mortgage intermediaries and lenders across the UK begins in Glasgow on 29 October. There is no set agenda for these sessions; those attending each session decide the topics for discussion.
These informal monthly ‘Ask the regulator’ events will conclude in March 2020. Visit our Live & Local webpage for further details and to register.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Insurance companies can now submit data for new Directory
The data collection for the new Directory is open. Banks, building societies, credit unions and insurance companies (and their appointed representatives) must submit their data before 9 March 2020 using Connect. All other firms must submit between 9 December 2019 and 9 December 2020.
The new Directory will provide the clear, simple-to-access information firms need. It will also make it more difficult for unsuitable people to operate in the UK market.
Our website gives clear instructions and guidance on how to submit your directory persons data.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Insurance companies can now submit data for new Directory
The data collection for the new Directory is open. Banks, building societies, credit unions and insurance companies (and their appointed representatives) must submit their data before 9 March 2020 using Connect. All other firms must submit between 9 December 2019 and 9 December 2020.
The new Directory will provide the clear, simple-to-access information firms need. It will also make it more difficult for unsuitable people to operate in the UK market.
Our website gives clear instructions and guidance on how to submit your directory persons data.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Retirement Outcomes Review – Consultation proposing minor amendments to our incoming rules
In Chapter 11 of CP19/27, we consulted on three minor changes to the rules we published in January in the appendix to PS19/1. Two of the proposed changes are to our incoming rules on ‘wake-up’ packs, the other is to our incoming rules on the annuity information prompt. Please send any comments you have on the consultation to us by 4 October 2019.
Letter to Remuneration Committee Chairs
In August 2019, we wrote to the Remuneration Committee Chairs of Level 1 firms (deposit takers and investment firms with total assets exceeding £50bn). We have published the letter on our website to share our findings from the 2018/19 remuneration round with all firms. The findings cover accountability, post-event risk adjustments and diversity and inclusion, as well as explaining our approach for assessing the remuneration policies and practices of Level 1 firms in 2019/20.
The letter also sets out key remuneration elements of our ongoing work on transforming culture in financial services.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Letter to Remuneration Committee Chairs
In August 2019, we wrote to the Remuneration Committee Chairs of Level 1 firms (deposit takers and investment firms with total assets exceeding £50bn). We have published the letter on our website to share our findings from the 2018/19 remuneration round with all firms. The findings cover accountability, post-event risk adjustments and diversity and inclusion, as well as explaining our approach for assessing the remuneration policies and practices of Level 1 firms in 2019/20.
The letter also sets out key remuneration elements of our ongoing work on transforming culture in financial services.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
FG 18/6: Plans to update guidance on helping tenants find alternatives to high-cost credit
Following an amendment to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, we will update this guidance. The amendment means that registered social landlords (RSLs) can now refer existing or potential tenants to some credit activities without having to get our authorisation. RSLs can now refer without authorisation:
- where the activity effects an introduction of an individual wishing to enter into a credit agreement
- where the introduction is to a credit union, community benefit society, registered charity (or subsidiary), community interest company limited by guarantee or subsidiary of an RSL, and
- for introductions provided fee‑free.
The rest of FG18/06 still remains relevant to RSLs. Those carrying out credit broking activities which do not fall within the specific terms stated above still require authorisation as credit brokers.
Credit unions, banks, building societies, and insurance companies can now submit data for new Directory
The data collection for the new Directory is open. Banks, building societies, credit unions and insurance companies (and their appointed representatives) must submit their data before 9 March 2020 using Connect. All other firms must submit between 9 December 2019 and 9 December 2020.
The new Directory will provide the clear, simple-to-access information firms need. This will also make it more difficult for unsuitable people to operate in the UK market.
Our website gives clear instructions and guidance on how to submit your directory persons data.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Key date - 14 September
On 14 September, new rules, known as Strong Customer Authentication (SCA) came into force. These rules enhance the security of payments and limit fraud.
New reports and notifications are now available, click on the Reporting requirements and Notifications under PSD2 links to see the list of reports and notifications available.
E-money firms should note their version of REP018 and REP020 is available.
We want firms to implement SCA in a way that minimises disruption to consumers. We have agreed to exercise supervisory flexibility to give firms extra time to implement the requirements.
More information on SCA can be found here.
Requirements for Strong Customer Authentication
Last month we sent a letter to the CEO’s of payment firms, outlining our requirements for Strong Customer Authentication (SCA) in card-not-present ecommerce transactions. The aim of the new SCA requirements is to improve the security of payments and reduce the risk of fraud in payment transactions.
In response to concerns about industry readiness for SCA, and to minimise potential disruption, the European Banking Authority (EBA) accepts that we may give some firms extra time to implement SCA. The letter and details of the requirements are available on our website.
Is your firm prepared for Brexit?
Unless a deal is approved or a further extension is agreed the UK will leave the EU without an implementation period on 31 October 2019. 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.
Check our website for more information, which includes information on specific financial service sectors.
Claims management companies must raise advertising standards
Claims management companies (CMCs) must do more to ensure their promotions are fair and clear, and do not mislead potential customers. Since the FCA took over regulation of CMCs, we have found widespread poor practice in CMCs’ financial promotions. We have issued a press release, setting out our concerns and the action we have taken so far. We will consider compliance of a firm’s financial promotions as part of its application for full authorisation. Firms should therefore ensure their promotions are fully compliant with our Handbook requirements.
Using leads generated by lead generators
Firms dealing with a claim or with a customer whose details it has obtained from a lead generator should consider whether they meet the requirements in CMCOB. This requires that the firm has:
- confirmed that a lead generator is an authorised person and, if not, that it is exempt
- the appropriate systems and processes are in place to ensure it meets the data protection legislation, The Privacy and Electronic Communication (EC Directive) Regulations 2003 or equivalent
- kept records of the steps it has taken to satisfy the above
We may take action if firms are not complying with these requirements.
Telling the FCA about competition investigations
Some firms are not notifying us immediately when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Under FCA rule SUP 15.3.15(3), firms are required to notify us in these circumstances. We will continue to monitor this and will consider using our regulatory powers if non-compliance continues.
Senior Managers and Certification Regime (SM&CR) – resources to help you prepare
We have recently updated our SM&CR webpages for solo-regulated firms. You can read about converting from the Approved Persons Regime, checklists for preparing and information on some of our commonly asked questions. Our Guide to the SM&CR for solo-regulated firms gives a useful overview of how SM&CR works. You can also watch our on-demand webinar and listen to our podcast on SM&CR and culture. Read on to find out more about our latest podcasts.
FCA Webinar – Live Panel Discussion: Transforming culture through employee motivation and recognition
On Friday 4 October, we will be hosting a live panel discussion which will look at the role employee motivation and recognition can play in transforming culture.
Jonathan Davidson, the FCA’s Executive Director of Retail Supervision and Authorisations, will host the discussion. He will be joined by guest panellists to discuss methods of motivation leaders may be overlooking and how these can drive culture change. Afterwards, there will be a live Q&A, where registered viewers can ask the panellists questions.
This webinar will be useful for financial services leaders and anyone interested in promoting healthy cultures in the workplace.
SM&CR podcasts – Certification and the Conduct rules
We have published two bite-size Inside FCA podcasts. These will be useful for firms currently preparing for SM&CR. David Blunt, Head of Conduct Specialists at the FCA, explains the following topics:
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Certification and regulatory references: The purpose and scope, plus practical steps firms can take to prepare.
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Conduct rules: The five Conduct Rules will apply to everyone doing financial services work. Our podcast explains the training requirements around them and offers practical tips for training staff.
These are a must-listen for any solo-regulated firms, as they set out key elements of the SM&CR.
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