Primary Markets Effectiveness Review

Effective public markets are critical in enabling companies to finance their businesses, which in turn creates growth and jobs.  But according to the UK Listing Review, chaired by Lord Hill, the number of listed companies in the UK has fallen by 40% since 2008.

That’s why, in response to the Listing Review recommendations and those of the Kalifa Review of UK FinTech, we are consulting on a package of reforms to improve the effectiveness of UK primary markets. The changes aim to reduce barriers to listing for companies, so the UK remains an attractive place to list and grow successful companies.

More companies raising capital on public markets at an earlier stage in their life cycle also means more opportunities for investors to share in the returns of those companies. As always, we continue to prioritise high standards of corporate governance and shareholder protections. This is essential if we want the UK to continue to be a modern and dynamic market.

We acknowledge the proposals only go so far, and that now is a timely opportunity to review our framework for primary markets more holistically. So, alongside the consultation, we are seeking views on the overall structure of our listing regime and whether wider-reaching reforms could improve its longer-term effectiveness.

The closing date for consultation responses is 14 September 2021. Please do engage with us and provide feedback on how our rules could be enhanced to support the sustainable growth of listed companies.

We have confirmed measures to protect customers from the loyalty penalty in home and motor insurance markets.  You can read our press notice here and our policy statement here. 

These measures follow our consultation and address the issues identified in our September 2020 market study, which found that millions of home and motor insurance customers lose out if they renew repeatedly with their current providers.

Under the new rules, prices for customers renewing home and motor insurance will not be more expensive than they would pay as new customers.  Consumers should still be able to benefit from shopping around or negotiating with their current provider, as insurers compete for their business and there should be a range of offers in the market – but they won’t be charged more just for being an existing customer.

We are also bringing in new rules for all insurance firms to give most consumers easier ways to stop their policy from automatically renewing. We will require firms to do more to consider how they offer fair value to their customers. We also have new requirements for home and motor insurance firms and intermediaries to report certain data to us so we can supervise the market more effectively.

The pricing, auto-renewal and data reporting remedies come into effect on 1 January 2022. The rules on systems and controls, product governance and premium finance take effect from the end of September 2021.

To prepare for the end of the Brexit Transition Period, we onshored, and where necessary, adapted EU legislation to ensure it was workable in a UK-only context. As a result, some requirements on firms and other regulated persons have changed. We used our Temporary Transitional Power (TTP) to give firms time to adapt to the new regime to avoid disruption around Brexit the end of the Transition Period. We expect firms to fully comply with onshored regulatory obligations at the latest by 31 March 2022. We have consistently said that firms should use the duration of the TTP to prepare for full compliance with changes to UK regulatory obligations. See our website for more information about the way we used the TTP.

We published our final 2021/22 regulated fees and levies - PS21/7 on 1 July. This included feedback on the responses to the consultation (CP21/8) on the draft fees and levies rules. Firms can use our online fees calculator to calculate their individual fees based on the final rates in the PS. This includes FCA periodic fees and the Financial Ombudsman Service, MaPS, Devolved Authorities and illegal money lending levy final rates in Appendix 1 (where applicable) of the PS. The calculator also covers PRA (where applicable) fees and Financial Services Compensation Scheme levies. We will invoice fee-payers from July 2021 onwards for their 2021/22 periodic fees and levies.

On 29 June 2021, we published a short update on the timing of the Complaints Scheme Consultation (CP20/11) on our website, details of which can be found here. The Regulators’ policy statement on the consultation and any changes to the Scheme will not be published until towards the end of 2021. This will allow time for the publication of the independent review of the FSA/FCA’s supervisory intervention on Interest Rate Hedging Products and for any associated complaints to be lodged for consideration under the present Scheme.

We published our policy statement detailing the first phase of rules to introduce the UK Investment Firm Prudential Regime (IFPR) on 29 June 2021. This is in response to our consultation of these rules in December 2020.

The IFPR is a new prudential regime for UK firms authorised under the Markets in Financial Instruments Directive (MiFID). Introducing the IFPR will mean that there will be a single prudential regime for all FCA investment firms. We issued a second consultation in April 2021 and we will be consulting on further IFPR proposals early in Q3 2021.

Find out more about our IFPR here.

All firms involved in providing or selling pre-paid funeral plans need to prepare for FCA regulation which starts on 29 July 2022. Don’t delay – get ready now.

We have published our Policy Statement which sets out our final rules, guidance and standards for when the pre-paid funeral plans sector enters our regulation. We’re also consulting on further proposals on the resolution of funeral plan firms, FSCS protection and structural provisions.

Visit our dedicated webpages for more information. Funeral plan intermediaries can sign up for our webinar, ‘Preparing funeral plan intermediaries for FCA regulation’.

Our recent Consumer Vulnerability and Consumer Duty Webinars are available to view on demand.

Watch Consumer Vulnerability to learn about our Vulnerability Guidance and the role you and your firm play in ensuring customers are treated fairly.

Watch Consumer Duty to learn about what the Duty would require of firms and what outcomes consumers should be able to expect from financial products and services. 

From 6 August 2021 we’ll start to delete draft Connect applications that have not been modified in the last 120 days.

If you have a draft application that was started before 8 April 2021 and you wish to still submit, please log in to Connect and progress this before 6 August 2021 to prevent it from being deleted.

If you no longer want to proceed with the application, then you don’t need to do anything.

The joint FCA/Practitioner Panel firm survey will shortly be closing. If your firm was selected to take part, please do so as soon as possible – your input is valuable and the more firms who respond the more representative the findings will be.

We recognise the need to provide information for firms to understand the financial promotions rules that apply to particular products and services. We have produced two short videos of the various products we regulate, and the common mistakes firms make while promoting their products. The videos illustrate the FCA’s expectation and highlight the need for promotions to be clear, fair and not misleading regardless of the media used. These videos, as well as other information about financial promotions, can be found on our web pages here.

Edwin Schooling Latter, Director of Markets and Wholesale Policy, delivered a keynote speech at UK Finance’s Commercial Finance Week on 5 July. Edwin highlighted the need for progress against the RFR Working Group’s end-Q3 milestone for active conversion and stopping new use of USD LIBOR across all asset classes by the end of 2021. He also spoke at length on the risks of transitioning to credit sensitive rates. We ask that any regulated UK market participants looking to use these products considers the risks carefully and raises this with their FCA supervisors before doing so.

Building on the success of the first pilot, the FCA and The City of London Corporation are running a second phase of the Digital Sandbox to support the testing and development of new products and services that will aid the transition to a net zero economy. We will be holding a launch event on 20 July to outline the use cases, next steps and how interested firms can get involved.

Building on the success of the first pilot, the FCA and The City of London Corporation are running a second phase of the Digital Sandbox to support the testing and development of new products and services that will aid the transition to a net zero economy. We will be holding a launch event on 20 July to outline the use cases, next steps and how interested firms can get involved.

We recently published the results of a multi firm review into the ‘host’ authorised fund manager (AFM) business model where we examined its viability and assessed whether conflicts of interests were being effectively managed. 

In our publication, we called for ‘host’ AFMs to improve their standards, as while some firms were operating well, others did not meet FCA standards.  We found weaknesses in governance structures, conflicts of interest management and onboarding and oversight of delegate third-party investment managers.

Building on the success of the first pilot, the FCA and The City of London Corporation are running a second phase of the Digital Sandbox to support the testing and development of new products and services that will aid the transition to a net zero economy. We will be holding a launch event on 20 July to outline the use cases, next steps and how interested firms can get involved.

We are asking all 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. This follows a pilot survey sent to 300 firms in May.

It has been designed to be quick and simple to complete. 95% of firms in the pilot firms completed it within 30 minutes.

We will use the data provided, alongside existing data, to support our ongoing work to mitigate risks of harm to consumers. 

The survey will be sent by email. If your firm has this permission and does not receive the survey, please check your spam/junk folders. For more details, please refer to our website.

Building on the success of the first pilot, the FCA and The City of London Corporation are running a second phase of the Digital Sandbox to support the testing and development of new products and services that will aid the transition to a net zero economy. We will be holding a launch event on 20 July to outline the use cases, next steps and how interested firms can get involved.

Building on the success of the first pilot, the FCA and The City of London Corporation are running a second phase of the Digital Sandbox to support the testing and development of new products and services that will aid the transition to a net zero economy. We will be holding a launch event on 20 July to outline the use cases, next steps and how interested firms can get involved.