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Firms can help those customers who are struggling by learning lessons from the COVID-19 pandemic Sheldon Mills, Executive Director of Consumers and Competition Steep price rises for energy and consumer goods have had a major impact on the finances of many households and businesses. Many people who are already struggling financially may find their situation worsen as winter continues. They will become more reliant on good financial services from firms.  Our recent Borrowers in Financial Difficulty (BiFD) report into how lenders served struggling customers during the pandemic, included examples of firms delivering good outcomes for these customers. But we also found that some firms need to do a lot better. For example, lenders can do more to encourage customers in financial difficulty to engage earlier, help customers access money advice and free debt advice, and where appropriate reduce, waive or cancel customer fees and charges. We have already acted where we have found poor practice. We have told 32 firms to make changes to improve the way they treat customers and so far, 7 of these firms have agreed to pay £12m in compensation to nearly 60,000 customers. We’ll be closely reviewing a further 40 firms in the coming months to make sure they are meeting our expectations. Our upcoming consumer duty rules will set a higher standard of consumer protection, but all firms should be stepping up now to help people in these difficult times. Together we can get through this period of uncertainty and help maintain a strong UK financial sector that is rightly seen as among the best in the world.

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Need to know

Appointed Representatives S165 request

We have published new rules to make authorised financial firms more responsible for their appointed representatives (ARs).

As part of our enhanced reporting requirements, principal firms will receive a mandatory section 165 data request for information about their ARs. We will issue the request between 8 to 10 December.

We first publicised the S165 via our website and Regulation Round-up (RRU) in August with further messaging in October.

We will send the S165 request by email to the Principal User on Connect. Therefore, firms should ensure their details are up to date. If you are a principal firm and you do not receive the S165, please check your spam/junk folder in the first instance. If the request is not there, please email the FCA at firm.queries@fca.org.uk and a new email and corresponding link will be sent to you.

The S165 request will be accompanied by detailed guidance explaining how to complete the request and will also include a link to FAQs that will be published on our website on 8 December.

Firms will have until 28 February 2023 to respond to the request. Their information will inform our targeted supervisory work across sectors and portfolios See sections 2.44 and 2.81 of our policy statement for more information. 

We remind firms that our rule changes come into force from 8 December. Principals should read the updated rules and expectations and take any necessary steps to be ready to comply.

Credit Information Market Study Interim Report

We are seeking views on proposed improvements to the credit information market which could lead to higher quality and more comprehensive information for firms, and fairer lending decisions for consumers.

Our market study has found the information in people’s credit files can differ across credit reference agencies, which could affect consumer outcomes.

It is sometimes difficult for consumers to access and dispute their credit information and many are unaware that they can do so for free.

The market could be made more transparent, effective and accountable, through changes, such as lenders sharing information with more credit reference agencies, making it easier for consumers to access their credit files and dispute information, and a new industry organisation with a wider remit and representation.

We want to make the credit information market fit for the future to better serve customers and lenders, while helping consumers through our wider cost of living measures.

We want to see a higher quality of credit information, so that lending decisions better reflect people’s underlying financial circumstances.

This should help make sure that consumers are not denied credit they could afford or given credit they can’t afford. This is particularly important given current concerns about the rising cost of living.

Please send us your views.

The deadline for comments is 17 February 2023.

Consumer Duty

In July we confirmed our plans to introduce a Consumer Duty that will set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first.

Nikhil Rathi, our Chief Executive, has given a speech covering our views on progress towards implementation, coordination with the Financial Ombudsman Service, and the impact on financial inclusion. He notes that we introduced a phased deadline to help firms embed what is undoubtedly a major cultural and operational shift. Firms seem to be on track and we see no need for implementation deadlines to move again.

Nikhil Rathi also sets out how we believe the Duty will help us manage the entry of Big Tech firms into the UK retail financial service, ensuring a level playing field.

Our Consumer Duty page for firms contains the latest publications and events on the Consumer Duty, alongside the option to sign-up for email alerts so you can stay up to date on our activity.

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All Sectors

The role of the FCA in a changing regulatory landscape

Nikhil Rathi gave a speech at the Lord Mayor's City Banquet at Mansion House on 27 October.

This speech provided a round-up of the regulatory progress we have made this year including on Consumer Duty. Nikhil Rathi warned about call-in powers undermining the agility we have shown and how UK’s global appeal is based on high standards underpinned by independent regulators.

Transition Plan Taskforce disclosure framework

Our ESG strategy supports the role of finance in delivering a market-led transition to a more sustainable economy. On 8 November, the UK Transition Plan Taskforce (TPT) published its Disclosure Framework and accompanying Implementation Guidance for consultation alongside a Sandbox for companies and financial institutions to test implementation. We have been actively involved in the development and drafting of these initial stages. We will draw on the final outputs to strengthen our transition plan disclosure expectations of listed companies and regulated firms.

You can respond to the consultation survey until 28 February 2023 and find more about how to take part in the Sandbox here.

LIBOR transition: Consultation on US dollar and announcement on 3-month sterling LIBOR

We are consulting on requiring continued publication of the 1-, 3- and 6-month US dollar LIBOR settings under an unrepresentative synthetic methodology, based on CME Term SOFR and the ISDA fixed spread adjustment, until end-September 2024.

We strongly encourage market participants to respond to our consultation by 6 January 2023. 

For sterling LIBOR, we intend to require continued publication of the 3-month synthetic sterling LIBOR setting until end-March 2024, after which this setting will cease permanently. 

Market participants who still have contracts referencing LIBOR should ensure they are prepared for publication to cease at the relevant date for each setting.

Pensions Dashboards rules for pension providers

Pensions dashboards are secure digital interfaces that enable consumers to find and view simple information about their pensions that are not yet in payment. Giving consumers this information may make it easier for them to plan for retirement, get advice or guidance, and ultimately make informed decisions.

We have confirmed rules that FCA regulated pension providers must follow to support pension dashboards, connecting to the dashboards and supplying information about personal and stakeholder pensions. Find out more about our requirements.

We will consult soon on our proposed regulatory framework for commercial parties offering a pensions dashboard service.

APM Q&As

Last week we published responses to unanswered questions asked at our annual public meeting.

The annual public meeting provides an opportunity to members of the public to question us on any aspect of our work and our Annual Report and Accounts 2021/22. This is a vital part of our commitment to transparency.

There were over 100 submitted questions that we didn’t have time to answer in our APM, which we have now answered in full. Topics range from questions about the call-in power amendment to the FS Bill, our new Consumer Duty and Blackmore Bonds.

FCA seeks members for new Innovation Advisory Group

We have launched a new ‘Innovation Advisory Group’ (IAG) to deep our engagement with the industry and inform our forward-looking work programme. In addition to a number of trade associations, we are seeking public expressions of interest from non-regulated organisations to join the IAG.

More information can be found on our website.

Problem behaviours linked to trading app design

We have asked stock trading app operators to review design features that risk prompting consumers to act against their own interest. Features include sending frequent notifications with the latest market news and providing consumers with in-app points, badges and celebratory messages for making trades.

Research we’ve published raises concerns that customers are being exposed to high-risk investments, and that some appear to exhibit behaviours similar to problem-gambling.

Ahead of the Consumer Duty coming into force next year, firms should review their products now to ensure they are fit for purpose. Firms in this market should also be proactively considering potential vulnerabilities in their customer base.

FCA Smaller Business Practitioner Panel – Member Vacancies

We are looking to appoint two members to the SBPP: one financial adviser and one investment manager.

This is an opportunity to help shape the FCA’s strategy and policies at a time of significant change in UK financial services regulation.

Please see our website for more information about our statutory panels.

Please submit applications to SBPP@fca.org.uk by 8 January 2023.

See more about how the FCA is taking action to be a leading diverse and inclusive organisation. 

Changes to Firm Reference Numbers (FRNs) and Product Reference Numbers (PRNs)

We use 6-digit Firm Reference Numbers (FRNs) to uniquely identify firms, and 6-digit Product Reference Numbers (PRNs) to identify funds. We’re likely to reach the 6-digit limit (999999) during Q2 2023, given the volume of applications and notifications we receive. 

We are planning a move to 7-digit FRNs and PRNs for newly registered firms and funds. Firms previously allocated a 6-digit FRN or PRN will keep that number. We are on track to change our internal systems to start allocating 7-digit numbers when our 6-digit range is exhausted.

New modification by consent: GEN, SYSC, TC, MIPRU, ICOBS, PROD and SUP

On 28 October, we published a modification by consent disapplying certain requirements for EEA firms operating a branch in the United Kingdom with a Part 4A permission to carry out regulated activities for non-investment insurance contracts, meets the conditions set out in the directions.

Find out more about this modification by consent.

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Data

Data & Press release: Financial Promotions Q3 data

Our latest data, from 1 July 2022 to 30 September 2022, shows we reviewed 340 financial adverts involving authorised firms. Our engagement resulted in 4,151 promotions being amended or withdrawn. Retail lending (with 46%), retail investments and retail banking are the sectors with the highest amend/withdraw outcomes, amounting to 95% of our interventions with authorised firms. 

View financial promotions quarterly data 2022 Q3

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Open Consultations

Have your say - respond to our open consultations and discussions:

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Portfolio Letters

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Speeches & Events 

FCA's key priorities for the financial advice industry

Therese Chambers spoke at the PFS Festival of Financial Planning on 1 November.

She spoke about how the FCA wants to see more consumers who can afford to do so investing their money safely which will only occur in a better consumer investment market. Financial advisers play a major role in helping or hindering this better market.

AI: Moving from fear to trust

Jessica Rusu spoke at the City and Financial Summit 2022 on 9 November.

She outlined how AI offers opportunity for competition but also poses risks to consumers. Rules such as the Consumer Duty and SMCR cover much of the uncertainty over AI for financial services and quality data must be used so we move from a place of fear to trust.

Diversity and inclusion: Driving change in our industry

Sheldon Mills spoke at ABI Diversity, Equity & Inclusion Conference on 22 November.

He discussed the importance of D&I to the FCA as a regulator, and our key takeaways from D&I practices around data, strategies and culture that we are currently observing within the industry.

Join our upcoming events on Big Tech in Financial services

Join us as we host events to support our recently published Discussion Paper.

Webinar: 28 November Dr Liza Lovdahl-Gormsen, FCA Senior Advisor, will chair an expert panel focusing on how we can work to harness the benefits of Big Tech entry and expansion while minimising the harms to consumers and competition.

Sector-specific roundtable discussions: 6 and 7 December These sessions provide an opportunity for you to actively engage and help inform our future regulatory approach to Big Tech. The 4 sessions focus on: 

• insurance 
• consumer credit 
• deposit taking 
• payments 

 Please see how to respond to the Discussion Paper and to register for the events.

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