Buy Now Pay Later (BNPL) Dear CEO Letter
We’ve warned firms that offer unregulated Buy Now Pay Later (BNPL) products that they may be committing a criminal offence if they don’t have an FCA-authorised firm approve their financial promotions.
Authorised firms and unauthorised retailers must ensure that they comply with the relevant rules unless an exemption applies. This includes that their BNPL financial promotions must be clear, fair and not misleading.
We’re concerned consumers could be misled if BNPL financial promotions do not comply and have seen financial adverts on websites and social media, including posts by social media influencers, which may breach our rules. For example, adverts emphasising the benefits of BNPL products without fair and prominent warnings of any risks to customers, such as:
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the risk of taking on debt that customers cannot afford to repay
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the consequences of missed payments
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any other adverse consequences such as the impact on the customer's credit file
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information about when charges become payable
Although we do not yet regulate BNPL products, we have been proactively addressing concerns about potential harms to consumers.
Review of TCFD aligned disclosures by premium listed commercial companies
Our environmental, social and governance (ESG) strategy sets out our target outcomes and how we plan to deliver these. Our aim is to support the financial sector in driving positive change, including the transition to net zero.
Increasing transparency on climate and wider sustainability risks and opportunities is a key priority. We introduced a climate-related disclosure rule for premium listed issuers as a first step to improving the quality and quantity of disclosures across the corporate sector. We have outlined our preliminary observations following an assessment of the first climate-related disclosures made in line with our rule and have reiterated our expectations to industry. We also refer to better practice examples highlighted in the Financial Reporting Council’s complementary review to help companies improve their disclosures.
Revised pension transfer redress guidance and BSPS consumer redress scheme rules
Following a periodic review, we have published a consultation proposing updates to how firms calculate redress for unsuitable defined benefit transfers advice.
Our review found that, overall, the current methodology remains appropriate. However, we are proposing some updates so that the guidance continues to reflect actuarial best practice and is responsive to consumers’ individual circumstances. It also aims to help reduce the impact of market volatility on calculations.
The consultation also sets out our proposals for calculating redress for our proposed consumer redress scheme for former British Steel Pension Scheme (BSPS) members.
FCA regulation boosts consumer protection in the funeral plans market
On 29 July, we took on the regulation of pre-paid funeral plans, following legislation. We have authorised 26 providers. Together these firms hold approximately 1.6 million plans, which make up 87% of the market.
Regulation of the sector will bring higher standards and boost consumer protection.
Letter to Remuneration Committee Chair of Level one firms
In August 2022, we wrote to the Remuneration Committee Chairs of Level one firms (Dual-regulated banks, building societies and PRA designated investment firms with total assets exceeding £50bn). The letter set out our expectations for these firms when determining their remuneration outcomes for 2022/23.
The letter also highlighted other key areas for them to consider on culture and accountability, the new Consumer Duty, the rising cost of living, Environment, Social and Governance (ESG), Diversity and Inclusion and operational resilience. While we sent the letter to Level one remuneration firms, we have published it on our website, as other firms may find some of its contents useful.
Change in Control and cryptoasset firms
This means that where any legal or natural person decides to acquire:
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25% or more control in; or
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less than 25% control but exercises significant influence over the activity of
a Registered Firm, that person must notify the FCA, undergo a suitability assessment and await approval as a beneficial owner before completing the transaction.
Lease signing for Leeds office
More than 100 new jobs will be created locally when we open our new office in Leeds in September.
Our new office is in the centre of the city’s business district in Queen Street where our Digital Delivery Centre will be based.
These jobs will be new roles and will not involve a restructuring of positions out of London.
William Hague, our Director of Change and Transformation is leading the setting up of the Leeds office and Phil Nixon has been appointed as Head of the Digital Delivery Centre in Leeds.
We are also doubling the number of colleagues in our Edinburgh office to around 200 and increasing recruitment in data and technology.
You can find out more by reading the press release about our Leeds office.
Statement on transition of LIBOR-linked bonds
We have published a statement strongly encouraging issuers and bondholders of outstanding LIBOR-linked bonds without robust fallbacks to transition these bonds to fair alternative rates. We remind market participants that publication of all remaining LIBOR settings is only temporary.
Transforming Data Collection Dear CEO letter
We and the Bank of England are leading a joint transformation programme with industry to transform data collection from the UK financial sector.
You can also opt-in to get updates and communications from the programme here.
OPBAS consultation on sourcebook review
On 11 August 2022, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) published a consultation on proposals to review the OPBAS sourcebook. The review will give professional body supervisors in the accountancy and legal sectors additional guidance to improve the consistency and effectiveness of anti-money laundering supervision.
OPBAS proposals include a new chapter outlining their approach to supervision. They also expand existing guidance by providing examples of the outcomes which can demonstrate effective supervision, including more examples of good and poor practice.
The consultation deadline is 29 September 2022.
FCA Smaller Business Practitioner Panel – Member Vacancies
This is an opportunity to help shape the FCA’s strategy and policies at a time of significant change in UK financial services regulation.
FCA fines Citigroup’s international broker-dealer £12.6m for failures relating to the detection of market abuse
We fined Citigroup Global Markets Limited £12,553,800 for failing to properly implement the Market Abuse Regulation trade surveillance requirements relating to the detection of market abuse. This meant it could not effectively monitor its trading activities for certain types of insider dealing and market manipulation. This resulted in significant gaps in its arrangements, systems, and procedures for additional trade surveillance.
101 firms in scope of new emergency asset retention rules for British Steel Pension Scheme transfer advice
New emergency asset retention rules now apply to 101 firms who provided pension transfer advice to former British Steel Pension Scheme (BSPS) members. 26 of these firms are subject to an asset restriction.
We announced emergency rules on 25 April 2022 to prevent firms who advised BSPS members to transfer their benefits out of the scheme from disposing of assets to avoid paying compensation under a potential consumer redress scheme. The rules came into force on 27 April 2022 and will continue until 31 January 2023.
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