We are consulting on plans to introduce a new Consumer Duty, which will set a higher level of consumer protection in retail financial markets.
Given our responsibility to ensure consumers are properly protected, we work continuously to improve standards in the financial services industry. With more financial decisions now in consumers’ hands and the changing digital landscape, we want to set a higher standard of consumer protection.
The new Duty will enhance our existing rules and tackle harm in financial services markets, as well as their causes. Many firms already deliver the right outcomes, but we want all firms to put themselves in the consumers shoes and get it right in the first place.
We want an environment where good firms can thrive, and consumers can make good decisions to pursue their financial needs. This requires firms to provide information consumers can understand, products and services that are fit for purpose, offer fair value, and customer service that helps not hinders.
The Duty will have 3 key elements:
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A new Principle – we are consulting on the wording.
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Cross-cutting rules clarifying the Principle’s overarching expectations of firm conduct.
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A suite of rules and guidance setting more detailed expectations in relation to four outcomes – communications, products and services, customer service and price and value.
We are inviting feedback on our consultation by 31 July and expect to consult on proposed rule changes by the end of 2021.
Sign up to join our webinar on 10 June to hear more.
Senior Managers and Certification Regime
The Senior Managers and Certification Regime (SM&CR) is now fully effective for all firms authorised under the Financial Services and Markets Act. We want this to lead to a step change in culture and conduct. Solo regulated firms should have certified any staff that they are required to and trained all their financial services staff in the Conduct Rules.
This is a beginning, not an end. Boards and accountable Senior Managers should be making sure that SM&CR continues to work effectively in the years to come. All firms should review our expectations and consider how they can best meet them. Larger firms are likely to need to ensure that they have effective systems and processes.
Firms should also be thinking about SM&CR in the context of their wider culture. We look to Senior Managers to foster healthy cultures, including considering the drivers of culture. The Certification Regime sets standards for competence and conduct of key staff and it has important implications for the whole employee lifecycle, from recruitment to exit. The Conduct Rules set basic standards of behaviour for all employees. We want people to be able to speak up when they see something that conflicts with these standards – this means that Senior Managers should be embedding a culture where it is safe to do so and concerns are taken seriously.
Pensions Stronger Nudge CP
On 4 May, we published our proposals for pension providers to ‘nudge’ consumers to Pension Wise guidance, at the point they wish to access, or transfer for purposes of accessing, their pension savings.
Our proposed rules will require pension providers to:
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refer the consumer to Pension Wise guidance
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explain the nature and purpose of Pension Wise guidance and encourage the consumer to take the guidance
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offer to book a guidance appointment and where the consumer accepts that offer, take reasonable steps to book the appointment or provide the consumer with sufficient information to book their own appointment
They also require pension providers to confirm and record whether the consumer:
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declined the offer to receive the Pension Wise guidance (opted out)
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received Pension Wise guidance or
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received regulated advice
Our proposals implement the requirements in the Financial Guidance and Claims Act 2018 to encourage consumers to take Pension Wise guidance.
We also want to hear other ideas about how to increase the take-up of Pension Wise beyond our proposed rules for consultation.
We welcome your feedback on our proposals for consultation and your views and supporting evidence on further measures for discussion. Please send us your comments by 29 June 2021. We will consider the feedback we receive and seek to publish a final Policy Statement in Q4 2021.
Joint FCA & Practitioner Panels Survey
You may recently have received an invitation to take part in the FCA and Practitioner Panel Survey. This is an opportunity to give your views on the way we regulate - it’s important that we hear what you have to say. The results give valuable feedback direct to the Panel and the FCA on how the organisation is performing and how it can improve. Invitations come from research agency Kantar Public. If you have been selected, please take part - we appreciate the time you take to complete it and your views will help to shape our future work.
Consultation on strengthening investor protections in SPACs
We have launched a consultation on proposed changes to its Listing Rules for certain special purpose acquisition companies (SPACs).
In CP21/10, we propose amending rules to allow an alternative approach for listed SPACs that are able to demonstrate the higher levels of investor protection that have developed in certain overseas jurisdictions.
We are consulting for 4 weeks on these proposals and you can input into the consultation.
Change of Legal Status applications
From 1 June 2021, we will no longer be accepting Change of Legal Status applications. Going forward, if you are thinking of changing your firm’s legal status, you will need to submit a New Authorisation application.
When submitting an application for the new legal entity, you will need to sign a declaration accepting the rights and obligations of the regulated activities carried on by the previous entity. Once the new firm has been authorised, you will need to submit a cancellation application for the previous firm.
Discussion paper on strengthening our financial promotion rules for high-risk investments
We have published proposals to strengthen our financial promotion rules for high-risk investments to help retail investors make more effective decisions.
Our discussion paper seeks views on 3 areas where changes could be made to address harm to consumers from investing in inappropriate high-risk investments:
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the classification of high-risk investments
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the segmentation of the high-risk investment market
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the responsibilities of firms which approve financial promotions
We’re inviting feedback on the paper by 1 July 2021. We will consider the feedback received, alongside further analysis and testing, and intend to consult on rule changes later this year.
Operational resilience: preparing for the switch from analogue to digital phone lines
The current analogue phone network will be switched off across the UK at the end of 2025 as we transfer over to a digital phone network, delivered through Voice over IP (VoIP).
This is a major change to the UK’s telecoms networks and will affect anything that currently plugs into existing analogue telephone wall sockets. Firms should be making plans to ensure there is no disruption to the services they provide.
Latest industry insights on cyber security published
We’ve published our latest cyber security industry insights, which draws on the knowledge of industry collaboration groups over the past year.
Read it here to gain from these insights for your firm.
We want to help firms become more resilient to operational disruptions and to reduce the risk and frequency of disruption.
The publication discusses cyber security trends from the last year, such as the additional strain remote working has placed on cyber security teams and systems, adding to the threat posed by ransomware, supply chain security and insider threats.
Consultation published on claims management phoenixing
We have published a consultation paper (CP21/14) on proposals to prevent harm caused by ‘claims management phoenixing’. This is where individuals from financial services firms that go out of business later reappear in connection with claims management companies (CMCs) charging consumers for help claiming compensation against their former firms.
The proposed changes will prevent CMCs managing FSCS claims with which they have a relevant connection and require CMCs to notify us of certain connections they have to regulated financial services activity. The consultation is open until 21 June 2021.
Consumer Vulnerability webinar
Ensuring consumers have an appropriate degree of protection is central to what we do. This includes protecting vulnerable consumers.
This webinar will be of interest to all regulated firms, but particularly advisory firms, regardless of the sector they operate in.
Finalised guidance for insolvency practitioners
Minimising the impact of regulated firm failure is a key priority for us. As part of this work, we’ve published guidance for insolvency practitioners on how to approach insolvencies of regulated firms. This will help IPs achieve better outcomes for consumers and markets when a firm fails by helping them understand how to deal with regulated firms and ensure that regulated firms meet their ongoing regulatory obligations following appointment. The guidance is aimed at IPs appointed over FCA solo authorised/registered firms but may also be relevant from the perspective of conduct regulation for IPs appointed over FCA/PRA dual regulated firms.
New webpages on climate change and sustainable finance
Climate change and sustainability are increasingly affecting listed companies, regulated firms and consumers. We have published new webpages on Climate change and sustainable finance. These provide an overview of work in this area, including implementing the Task Force on Climate-related Financial Disclosures, the Climate Financial Risk Forum, investor stewardship and our international work. We have also published more in-depth information on Climate-related reporting requirements.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
FCA consults on new powers on use of critical benchmarks such as LIBOR
We are consulting on our proposed approach for using some of our new powers under the Benchmarks Regulation, which we’re being given to help us manage the end of LIBOR. These powers relate to the use of critical benchmarks (such as LIBOR) that are being wound down, and the consultation sets out the factors we think are relevant in deciding how to use them. This consultation is relevant to users of LIBOR and we encourage responses by 17 June.
Working Group on Sterling Risk-Free Reference Rates (Working Group) recommendation for active transition of legacy Sterling-LIBOR contracts
The Working Group recently updated its priorities and roadmap for the final year of transition. The Working Group recommends the active transition of contracts ahead of Sterling-LIBOR cessation as the primary method to ensure contractual certainty and encourages market participants to engage with their financial providers to agree, as soon as possible, when and how their legacy Sterling-LIBOR contracts will change. To support active transition, the Working Group has published considerations to help market participants assess and prioritise the active transition of legacy Sterling-LIBOR bilateral swap contracts to Sonia, as well as operational considerations for fallbacks in uncleared linear derivatives.
FMSB Spotlight Review on LIBOR back book transition
The FICC Markets Standards Board (FMSB) recently published a Spotlight Review on LIBOR transition, looking at how market participants may manage potential conduct risks arising in back book transition. The Spotlight Review provides practical guidance for market participants and has been developed by FMSB’s LIBOR Transition Working Group, which has representation from a wide range of FMSB member firms.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
Extension to Strong Customer Authentication Deadline for E-Commerce Transactions
We previously agreed to give firms extra time to implement Strong Customer Authentication (SCA) for card-based e-commerce transactions in response to the coronavirus crisis, concerns about industry readiness, and to minimise potential disruption to consumers and merchants.
Recognising the challenges industry faces in being fully ready by 14 September 2021 we have decided to extend until 14 March 2022 the deadline by which we expect full SCA compliance for e-commerce transactions.
In the meantime, we expect firms to continue to take robust action to reduce the risk of fraud to consumers.
See our webpage for more information.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
Business Interruption Insurance Test Case – Policyholder claims communications
In accordance with our Business Interruption Insurance Test Case: Finalised Guidance for Firms, insurers should have updated all policyholders with potentially affected claims or complaints after the conclusion of the test case. Insurance intermediaries acting for policyholders should seek to support them, as appropriate, to progress their claims quickly with their insurer. They should also consider whether it is fair, and in the policyholders’ best interests, to notify the policyholder if the intermediary reasonably considers that they may have a claim under their policy. This is irrespective of any separate commercial relationship between the intermediary and the insurer.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
CP21/9 Changes to UK MiFID’s conduct and organisational requirements
We published a Consultation Paper (CP) to gather feedback on our proposed changes to two areas to the conduct and organisation rules in UK MiFID.
We are consulting on changes to the existing inducement requirements for research relating to SMEs as well as to Fixed Income, Currencies and Commodities. We are also consulting on removal of two sets of best execution reporting obligations on firms. This consultation forms part of wider work that we are working with HM Treasury on capital markets reform.
We are asking for feedback to the CP by 23 June 2021 and responses will be used to help inform our final policy statement.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
Reminder: Post-Brexit changes for some consumer credit firms from 1 June 2021
If the Disclosure Regulations are not complied with, the credit agreement is only enforceable against the debtor on an order of the court under the Consumer Credit Act 1974.
Further information can be accessed here.
Credit Broking Survey
We are asking regulated firms that hold the credit broking permission to complete a short survey to update the information we hold on how they are using this permission.
We are sending a pilot survey to 300 firms on 20 May 2021. The survey to remaining firms is expected to follow in July. It has been designed to be quick and simple to complete.
The survey will give us an updated view of how firms are using the credit broking permission. We will use the data provided, alongside existing data, to support our ongoing work to mitigate risks of harm to consumers.
For more details, please refer to our website.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
Digital Sandbox Evaluation Report and Sustainable Finance Cohort
We have published an evaluation report of the Digital Sandbox pilot. The report sets out the findings of the pilot, including how it accelerated the development of innovative products and solutions within financial services, as well as key lessons learned. We found that access to a digital testing environment successfully accelerated development times for the vast majority of participants, as well as benefitting other aspects such as improving product design and refining early-stage business models. We will be opening applications for a Digital Sandbox pilot focused on sustainable finance later this year. Further updates will be posted on our website.
All reporting firms moved to FCA’s new data collection platform RegData
We completed the move to RegData, which has replaced Gabriel as our data collection platform, with the last group of firms now moved across. Since the transition began in October 2020, we moved 52,000 firms and 120,000 users to RegData in groups, based on their reporting requirements.
We’re keen to hear from firms that have used RegData and invite you to complete a short survey on your experience of the system so far. We are grateful to those who have provided feedback to us. We are already using this feedback through RegData’s flexible technology to improve the system’s performance across a number of submissions.
Please act: ensure your customers understand how their money is protected
We’ve written to e-money firms to ask them to make customers aware of the protections they have in place.
Some e-money customers may not understand how their money is protected and the difference compared to using other firms such as banks - in particular, that Financial Services Compensation Scheme (FSCS) protection does not apply. We’re concerned that many e-money firms compare their services to traditional bank accounts but do not adequately disclose the differences in protections.
Firms should read our letter and act immediately. We intend to follow up with a sample of firms to assess the action taken.
Whiplash Reforms
The Whiplash Reforms Programme takes effect from 31 May 2021 and includes key changes to the claims process for low value road traffic accident claims. More information can be found here. These reforms are likely to have a significant impact on CMCs that focus on personal injury claims. Firms considering representing claimants at the Official Injury Claims Service portal should ensure that they are not carrying out a regulated activity without the required permissions and carefully check the legislation, and the FCA Handbook. If you are unsure of your position, you should seek independent legal advice.
Consultation published on claims management phoenixing
We have published a consultation paper (CP21/14) on proposals to prevent harm caused by ‘claims management phoenixing’. This is where individuals from financial services firms that go out of business later reappear in connection with claims management companies (CMCs) charging consumers for help claiming compensation against their former firms.
The proposed changes will prevent CMCs managing FSCS claims with which they have a relevant connection and require CMCs to notify us of certain connections they have to regulated financial services activity. The consultation is open until 21 June 2021.
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