 FCA publishes consultation on treating vulnerable consumers fairly
On 29 July we published draft guidance to set out what firms should do to ensure they are treating vulnerable consumers fairly.
Protecting vulnerable consumers is a key focus for us. More than 24 million people display one or more potential characteristics of vulnerability. Over a million people received debt advice last year. These figures do not reflect the impact of coronavirus (Covid-19), and the pandemic has only highlighted the importance of vulnerability. Sadly, the pandemic means many more people will now be struggling with their finances.
We accompanied our guidance with Financial Lives research which paints a clearer picture of vulnerable consumers’ experiences of dealing with financial services firms. Many firms do excellent work to support their vulnerable customers. But we also found some examples of firms either not considering consumers’ vulnerability or even actively exploiting it for gain. We want vulnerable consumers to experience outcomes as good as other consumers and to receive consistently fair treatment across the firms and sectors we regulate.
The fair treatment of vulnerable consumers applies to all firms serving individuals and retail customers. We encourage you to read the guidance and research and consider how to use it to respond to the needs of your vulnerable customers. We would also welcome your contribution to the consultation which closes on 30 September.
You can also watch our short video to see how the guidance affects you and the actions you can take.
Annual Public Meeting 2020 – 24 September
This year, due to coronavirus (Covid-19) and current social distancing measures, we will hold our Annual Public Meeting as a virtual event on Thursday 24 September from 10:00 - 12:00.
At the meeting, we will discuss our 2019/20 Annual Report & Accounts (due to be published in September).
Please visit the event webpage for further information and to register to watch the live stream. You will have an opportunity to submit questions upon registration and during the event.
Check the technical requirements page to make sure your system meets the minimum viewing requirements.
New Supervisory correspondence webpage
On 24 July, we published changes to the Supervision section of our website to:
- provide further information on our approach to Portfolio supervision
- introduce a new Supervisory correspondence page to locate all published Portfolio letters in one place
- include a list of our Portfolios displayed by sector to help firms locate letters that are relevant to their main business or other portfolios they operate in
We supervise all firms as members of a portfolio of firms that share a common business model. Our portfolio letters set out our view of the main risks of harm in a portfolio, the action we expect firms to take, and what we will be doing to reduce the level of harm in that sector.
Where firm’s activities span multiple regulated sectors, they will only receive a letter for the main portfolio they operate in. The new page helps firms to access and review letters for other portfolios that may be relevant to their business.
You can visit our new Supervisory correspondence webpage here. And view information about our portfolio approach here.
FCA to ban motor finance discretionary commission models and amend commission disclosures in all credit markets
We confirmed in July that we will ban discretionary commission models in the motor finance market.
This removes the financial incentive for brokers to increase the interest rate that a customer pays.
We have also amended our commission disclosures across all credit markets to improve the information customers receive.
These changes follow a consultation in October 2019. Because of the consultation feedback, firms have extra time to implement the new rules, which come into force on 28 January 2021.
Letter to Remuneration Committee Chairs of Level 1 firms
In July 2020, we wrote to the Remuneration Committee Chairs of Level 1 firms (deposit takers and investment firms with total assets exceeding £50bn as indicated in our General Guidance on proportionality for SYSC 19D). We published the letter on our website to share our observations with all firms. The letter sets out our findings on accountability, ex-post risk adjustments, and diversity and inclusion from the 2019/20 remuneration round, as well as explaining our future approach for assessing the remuneration policies and practices of Level 1 firms.
Dear CEO letter on Title Transfer Collateral Arrangements and regulatory permissions for financing transactions relating to use of the Matched Principal Exemption
On 24 July, we sent a Dear CEO letter to Wholesale Broker firms on inappropriate uses of Title Transfer Collateral Arrangements (TTCAs).
We set out our concerns and asked Wholesale Brokers to confirm that the Senior Manager with the relevant responsibility has considered the matters described in the letter and will bring any issues at their firm to the attention of the Board.
The letter also addresses a related point for firms facilitating leveraged client trading and undertaking connected financing transactions in their own name, where we ask them to ensure they have the correct permissions for these activities.
New web pages for Senior Managers and Certification Regime: solo-regulated firms
In August, we published new information for firms ahead of the Senior Managers and Certification Regime (SM&CR) extended deadline – March 31, 2021.
The new web pages feature details on the Certification Regime and our Conduct Rules and expectations for firms, including positive and negative indicators. There is also an existing guide for firms outlining our final rules and guidance on the SM&CR, which gives an overview of the SM&CR.
Transforming Culture Webinar: Leading healthy cultures in a post-Covid world
On Friday 11 September, we are hosting a live panel discussion exploring the role of leaders in driving healthy culture in a post-coronavirus world.
Jonathan Davidson (Executive Director of Retail Supervision and Authorisations) will be joined by guest panellists to discuss lessons learned from the initial lockdown period and the changing role of leadership as we move through and out of this crisis. Following the discussion, there will be a live Q&A where registered viewers can submit questions. Please visit our website for further information and to register.
Updating the Dual-regulated firms Remuneration Code to reflect CRD V
On 3 August, we published a consultation paper on our proposals to amend the Dual-regulated firms Remuneration Code and relevant non-Handbook guidance in line with the Capital Requirements Directive V (CRD V). The PRA also published a consultation paper in which it sets out its proposals for implementing CRD V.
Our proposals aim to ensure that the FCA’s remuneration regime for dual-regulated firms continues to promote healthy culture and minimise harm to consumers and markets, and that our remuneration rules remain consistent with the PRA’s remuneration framework. Our consultation closes on 30 September 2020.
Debt Advice levy rates for 2020/21
In August, we published our Consultation Paper on the rates at which we propose to charge our levies for the additional amount of funding for debt advice, notified to us by Treasury (HMT) and Department for Work and Pensions (DWP). The DWP notified us that, we must collect an additional £14.2m for MaPS in 2020-21 for the provision of debt advice in England. This is essential for MaPS and the debt advice sector to keep providing advice and respond effectively to the coronavirus crisis. For the Devolved Authorities, HMT has notified us that we must collect an additional £2.087m to maintain debt advice capacity following the coronavirus crisis for the Devolved Authorities. There is more information on our website.
Daily updates
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Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Update to statement on firm handling of complaints during coronavirus
On 31 July, we updated our statement clarifying how firms should handle complaints during the coronavirus crisis. We first published this statement on 1 May and committed to updating it in 3 months. We have re-published the statement with some additions and revisions including our expectation that delays responding to complaints should now only be as a result of exceptional coronavirus-related circumstances. The statement also reminds firms of their obligations to cooperate with the Financial Ombudsman Service on referred complaints. We intend to review this statement again by the end of October 2020.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Travel insurance
We anticipate consumer demand for travel insurance will increase, reflecting fast-moving changes in the travel sector. We published consumer and firm statements advising consumers to carefully consider their insurance needs before booking a holiday and reminding firms that:
- we expect them to clearly communicate to customers the cover and exclusions under their policy
- when selling an insurance policy, they only propose cover that’s consistent with a customers' demands and needs, we expect firms to ask questions to establish individual customer demands and match the products they are offered to these demands
Non-damage BI settlements and deductions for government support
We released a statement setting out what firms should do when applying deductions for government support received by policyholders to non-damage business interruption settlements. Firms should assess how appropriate these deductions are on a case by case basis. We expect insurers to consider individually the precise details of the policy, the claim and the use and application of the government support the policyholder received.
Coronavirus and customers in temporary financial difficulty: draft updated guidance for insurance and premium finance firms
In May, we published guidance setting out our expectations for insurance firms when considering the fair treatment of existing customers in financial difficulty, due to circumstances arising from coronavirus. We published proposed updated guidance on 24 July 2020.
Stakeholders expressed support for our proposal during a short period for comments and we have finalised our updated guidance which extends measures to help customers who are in temporary financial difficulty.
We have disapplied some rules in our Consumer Credit sourcebook (CONC) to give effect to this guidance.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Relending Review
We published the findings of a review of relending by firms that offer high-cost credit. The review, which was completed before the coronavirus pandemic, highlights concerns about poor practices by some firms and notes that nearly half of consumers regretted borrowing more money. As firms in this sector begin to lend again, the report sets out our expectations on how they must treat consumers.
Employer Salary Advance Schemes
We set out our views on the risks and benefits of Employer Salary Advance Schemes (ESAS), and what employers and employees should consider when using them.
ESAS are commonly promoted as an alternative to high-cost credit. While most do not fall under our regulation as they do not meet the definition of credit under legislation, given the similarities with some credit products we thought it may be helpful to set out our views to help employers, employees and scheme providers to make informed decisions.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Disclosure during coronavirus
Throughout the coronavirus crisis consumers have been expected to make difficult financial decisions, many of which carry longer term consequences. We have been monitoring and evaluating the disclosure of firms, to understand if they are providing consumers with enough support with their decisions. We are impressed with how firms have approached disclosure during this crisis, and welcome the accessible and engaging disclosures that have been designed. We hope firms will build on what they have achieved and continue to design innovative disclosures that facilitate consumer understanding. For more information please email CDD-RetailDistribution-Queries@fca.org.uk
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Open finance call for input submission deadline
Please respond to our call for input (CFI) on open finance, which closes on 1 October 2020.
It explores the opportunities and risks from open finance, what is needed to make sure it develops in the best interests of consumers, and what role we should play. It was due to close on 17 March 2020 but we extended this deadline as part of our response to the impact of coronavirus. We’ve received over 100 responses so far, from industry participants, consumer representatives and government bodies.
Brexit
The UK left the EU on 31 January 2020 and entered a transition period which is due to end on 31 December 2020. We have published more information for firms. Find out what this means for firms and consumers on our Brexit pages.
Preparing for the end of the transition period
We have published updated information about preparing for all scenarios at the end of the transition period for firms and consumers. Find out more:
E-Commerce Directive - changes at end of transition period
The E-Commerce Directive (ECD) provides an exclusion for e-commerce activities given from one EEA State to a person in another EEA State. After the end of the transition period, the ECD exclusion will no longer apply for cross-border activities between the UK and the EEA, and UK and EEA-based firms will no longer be able to use it. If you think you will be affected by this change, you can find more information on our website.
Memoranda of Understanding (MoUs) with ESMA and EU regulators
We issued a joint statement with ESMA on the application of MoUs covering cooperation and exchange of information at the end of the transition period.
Industry testing - FCA FIRDS and FITRS
As part of the next phase of developing the UK MiFID regime, which will come into application after the end of the transition period, industry testing for FCA FITRS (Financial Instruments Transparency System) will open on 05 October. More information is available on our website. FCA FIRDS (Financial Instruments Reference Data System) continues to be available for testing.
DP20/2: A new UK prudential regime for MiFID investment firms
We published a Discussion Paper (DP) to gather industry feedback on the potential contents of a UK prudential regime specifically for firms currently authorised under MiFID. This is the first step in developing and introducing such a regime in the UK. The DP also describes the new EU Investment Firm Directive and Regulation.
On 17 August, we hosted the Prudential requirements for MiFID investment firm’s webinar. Register to watch the on-demand version of the webinar, by creating a user profile on our new webinar portal, validate your email and then select the webinar you would like to view.
We are asking for feedback to the DP by 25 September 2020 and responses will be used to help inform a follow-up consultation. We have produced a table to aid firms identify the most relevant content of the DP for their business model and size.
You can use the email address on our website to respond to the DP.
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