 Firms can soon register for our new data collection platform
Welcome to this edition of Regulation Round-Up.
Since the FCA was established, we have supported and driven innovation in financial services firms. As a regulator, we need to both respond to how firms are using new technology, data and analysis and use them ourselves to improve our own efficiency and effectiveness.
An integral part of our Data Strategy is improving the way we collect data. We will be moving to a new platform, which will replace Gabriel, for our data collections.
To prepare for the move, we will soon ask firms to complete a mandatory one-time registration when they log in into Gabriel. After you have registered, you should continue to use Gabriel as normal until we move you to the new system. We'll let you know about your moving date in good time.
We are also simplifying the way you access FCA systems. So you will be able to log into the new data collection platform using the same details as you use for the FCA Connect.
If you use Gabriel, keep an eye on our Gabriel page for updates on the start date of the registration process.
Covid-19 (coronavirus)
We are closely monitoring the Coronavirus (Covid-19) pandemic. We are taking precautions to make sure customers are protected and that markets continue to function. We have significant resource across the FCA dealing with the Coronavirus, both for the firms we regulate and for our staff. Dedicated teams have been set-up and our Executive Committee is overseeing the situation.
We are working closely with the Government, the Bank of England, the Payment Systems Regulator and firms as the situation continues to develop.
We are in regular contact with firms to assess their current position. We expect them to be taking reasonable steps to ensure they are prepared to meet the challenges coronavirus could pose to customers and staff, particularly through their business continuity plans. We expect firms to provide strong support and service to customers during this period. They should be clear and transparent and provide support as consumers and small businesses face challenges at this time. We also expect firms to manage their financial resilience and actively manage their liquidity. Firms should report to us immediately if they believe they will be in difficulty.
We have published detailed information for firms on our website and encourage all firms to monitor our website as we will publish further information in the coming weeks.
We have already published information about our expectations of general insurance firms at this time.
Discussion Paper on driving purposeful cultures
On 5 March, we published a Discussion Paper on driving purposeful cultures. The paper is a set of essays which present a range of views from industry leaders, professional bodies and culture experts to help firms embed healthy purposeful cultures.
The paper makes the case for these cultures in firms, leading to good outcomes for their customers, employees and investors. We describe purpose as what a firm and its employees is trying to achieve – the definition of what constitutes success. A firm’s individual purpose is their own responsibility and, as with culture, we do not prescribe what this should be. However, there are common elements of a healthy culture:
- a meaningful purpose
- an inclusive environment where it’s safe to speak up
- effective leadership and governance
- employees that have the necessary capabilities and are motivated by appropriate incentives
Culture transformation takes time and consistency, but small changes can make a big difference. We want firms to realise the benefits of having purposeful cultures. We hope that everyone who reads these essays will be inspired to take at least one idea back to their organisation to try for themselves - a step towards creating more purposeful cultures in financial services.
Adjusting Financial Ombudsman Service award limit
On 1 April 2019, we increased the Financial Ombudsman Service’s award limit from £150,000 to £350,000. This applies to complaints referred to the Ombudsman service on or after 1 April 2019 about firms’ acts or omission on or after that date. We increased the award limit for complaints referred to the service on or after 1 April 2019 about pre-1 April acts or omissions, to £160,000. In the accompanying policy statement (PS19/8) we said that, from 1 April 2020, we would adjust both award limits each year to ensure they keep pace with inflation. In line with DISP 3.7.4R, we will do this by applying the percentage increase in the Consumer Prices Index (CPI) between January 2019 and January of that year, and rounding the adjusted figure down to the nearest £5,000. Following the publication of the CPI figures for January 2020, we have increased the award limit for complaints referred to the Ombudsman service on or after 1 April 2020 to £355,000 for complaints about acts or omissions on or after 1 April 2019. There will be no changes to the other limits.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Outsourcing in Life Insurance Sector - Multi-Firm Review
We have recently completed a multi-firm review of life insurers’ governance and oversight of the most material activities they outsource. Although firms undertook extensive governance we identified areas where they need to improve. In particular, we identified that some firms did not have adequate exit plans to deal with events such as an outsourced service provider’s sudden insolvency. We encourage all life insurers to review their oversight of outsourced activities against our findings.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Amendment of COBS 21.3 permitted link rules
We published a policy statement: Amendment of COBS 21.3 permitted link rules. These new rules address unjustified barriers to investing in a broader range of long-term assets through unit-linked funds. We want to strike the right balance between allowing long-term capital investment, so that those investing for the long term benefit from the higher expected returns for some of these assets, and keeping appropriate consumer protection. Firms offering this broader range will have to comply with prescribed investment limits, assess the investments as suitable for retail investors and provide additional risk warnings.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Senior Managers and Certifications Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Fostering Innovation through collaboration
On 3 March we published ‘Fostering innovation through collaboration: the evolution of the FCA TechSprint approach’. This explores the lessons we have learned from hosting 7 TechSprints across a range of subjects. As part of our commitment to continue to foster innovative global financial markets, we want to share our wide experience and help other organisations to address key industry problems.
Please do share your thoughts or observations with us at regtech@fca.org.uk
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Exchanging cryptoassets as a business in the UK?
Since 10 Jan this year, any firm carrying out certain crypto-asset activities must comply with the MLRs 2017 and have the required anti-money laundering and counter-terrorist financing controls in place.
Firms already operating before 10 January this year need to register with the FCA by 10 January 2021. Businesses which were not carrying on cryptoasset activity before 10 January, but now want to do so, must be registered with us before starting this activity.
Don’t delay – we need your application by 30 June 2020 to check whether it will be ready in time for the January deadline. Click here for more information.
Senior Managers and Certification Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
Brexit
The UK left the EU on 31 January 2020 and has entered a transition period, which is due to end on 31 December 2020. Find out what this means for firms and consumers on our Brexit pages
Senior Managers and Certifications Regime (SM&CR)
The SM&CR is a catalyst for driving cultural transformation and sets a new standard of personal conduct in financial services.
By 9 December 2020 solo-regulated firms will need to ensure:
- all relevant staff are trained on the 5 Conduct Rules and understand how these rules apply to their roles
- all staff in certified roles are fit and proper to perform that role and are issued with a certificate
- you submit data to us for directory persons working in financial services
This will take time so you should start preparing now.
Read our SM&CR guide for solo-regulated firms for more information.
2020/2021 fees and levies
Firms that intend to cancel their permission and do not want to be liable for next year’s annual fee (1 April 2020 to 31 March 2021) need to apply to cancel online, through Connect by 31 March 2020. If they do not they will be liable for the full annual fee.
Cyber Insights
We have published our second annual industry insights, capturing the cyber threat landscape across financial services. Since 2017, we have run industry Cyber Coordination Groups to help improve members’ cyber security practices. This is part of our efforts to manage systemic risk and strengthen the UK financial sector’s resilience. The groups have shared insights on key cyber threats including identity and access management, third parties and supply chains, and malicious e-mails. We encourage all firms to consider these insights.
OPBAS publishes its second annual report
Today, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) published its second annual report. OPBAS is housed by the FCA and supervises the 22 legal and accountancy professional body supervisors (PBSs). Its report covers progress and themes from its supervision in 2019. It finds that, while there has been strong improvement in PBS AML supervision across both sectors, some PBSs are still lagging behind their peers and must raise their standards. In 2020, OPBAS will be testing how effectively firms are implementing PBS’s AML strategy plans, drawn up as a result of its findings
Cyber Security Podcast
Listen to our latest Inside FCA podcast in which our cyber security expert, Robin Jones, shares his insights on cyber security practices and how you can help keep your firm safe from attack. The podcast including his predictions on the future of cyber in this fast changing environment.
Data Attestation
With effect from January 2020, you are now required to review and confirm your firm details annually, within 60 days of your Accounting Reference Date (ARD). Even if details have not changed, you will still need to log on to Connect and confirm that they are up to date.
You can only do this using Connect, the FCA’s online platform. Firms who are not using this platform should register now. If you need help registering, visit our website, watch our video guide, or call 0300 500 0597.
Asset management firms: prepare now for the end of LIBOR
We have published a Dear CEO letter on LIBOR transition to set out our expectations for asset managers as they prepare for the end of LIBOR.
Transition should be underway at firms with LIBOR exposures or dependencies. If firms have not yet started their transition efforts, we expect them to take immediate action to develop and to begin to execute an appropriate plan.
We expect firms to take all reasonable steps to ensure the end of LIBOR does not lead to market disruption or harm to consumers. We expect firms to support industry initiatives to ensure a smooth transition.
Accessing and using wholesale data Call for Input
On 9 March we published a Call for Input (CFI) to better understand the changing use and value of data in wholesale financial markets. We are inviting responses to the questions in the CFI by 1 May 2020.
For information on how we plan to engage please see our website.
We plan to publish a Feedback Statement setting out our analysis, findings and any next steps in Autumn 2020.
Aligning stewardship industry workshop
We held an industry workshop on investor stewardship on 26 February, jointly with the FRC, TPR and DWP.
The workshop explored practical steps to address barriers to effective stewardship identified in our Feedback Statement. Around 40 stakeholders attended, including asset owners, asset managers, service providers, trade associations, non-governmental organisations and academics.
The group identified some promising next steps using existing industry groups. The groups will take forward work on: contractual and non-contractual arrangements between asset owners and asset managers, transparency of asset managers’ voting activity and investment consultants’ support for stewardship. We will feed back key themes and next steps via relevant trade associations.
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