|
Moving forward with the Consumer Duty
Sheldon Mills
Executive Director, Consumers and Competition
I’ve been out and about meeting firms this month to understand how they are getting ready to implement the Consumer Duty.
It’s been positive to hear how some firms are already using the Duty to innovate by using their implementation work to find new ways of doing things, and making meaningful, customer centric, changes.
This is exactly the type of cultural and operational shift we are hoping the Duty will bring about.
We know making changes of this scale require significant effort and resource which is why we listened to your feedback and introduced an extended and phased implementation deadline. It’s great to see the evidence of the effort you are making to meet the deadline, and we want to thank you for your hard work.
And as I set out in my speech yesterday, we’re committed to help you deliver these changes. As part of our continued support, we are publishing a series of letters setting out our expectations for firms in different sectors. These set out our expectations for how firms should embed the Duty in each sector, including relevant examples of good and poor practice, our approach for supervising the Duty, and planned next steps. We’ve also published Inside FCA podcasts exploring each of the Duty’s four outcomes.
We’ll continue to provide additional resources in the months to come, and I look forward to hearing more about how firms are embracing the spirit of the Duty.
|
Back to the top
|
|
How you log in to FCA systems is changing
We have introduced multi-factor authentication to strengthen how you log into our systems and to further protect and control access to our data.
You now need to enter a one-time passcode every time you log into Connect, Reg Data, Online Invoicing, Shared Intelligence Service (SIS) and, from March, the Electronic Submission System (ESS).
You’ll be prompted to register and turn on multi-factor authentication when you log in. See our website for more information and resources.
Subscribe to our new blog
Subscribe to our new blogs for expert FCA insight on the latest work and action we’re taking on priority issues and how we’re delivering on our Strategy.
Our first two blogs focus on what we’re doing to help consumers cope during the cost of living squeeze, and our strategy to influence positive, sustainable change.
Launch of FCA and Practitioner Panel Survey
The FCA and Practitioner Panel joint survey for 2022/23 has launched. The survey is being sent to a sample of regulated firms, to gather their feedback on how we are doing in regulating the industry. It is carried out on our behalf by Kantar Public, an independent social research organisation. Kantar sends the survey to all fixed firms and a sample of 13,000 flexible firms. If you are selected to complete the survey, please take the time to provide us with your valuable feedback.
We will use the survey results to better understand the issues affecting firms and assess whether any changes should be made to our approach, as part of becoming a more innovative, assertive, and adaptive regulator. The survey is one of several sources of feedback used to evaluate our performance against key areas of our 3-year Strategy. The results are presented to the Practitioner Panel and our Board and will be published in summer 2023.
In line with the Market Research Society Code of Conduct, Kantar Public treats all survey responses in the strictest confidence. Personal information will not be published or shared with the FCA or the Panels.
If you receive a request to participate in the survey and have any questions, contact Kantar Public on 0800 015 0302 or at fcappsurvey@kantarpublic.com. Alternatively, you can contact us on 0300 500 0597.
Back to the top
|
|
Updating and improving the UK regime for asset management
We have published a Discussion Paper to get feedback on what regulatory change might help the UK’s asset management industry innovate, better support the investors it serves and boost competition.
We want to support the UK’s position as a world-leading centre for asset management, and make sure our regime takes account of developments in technology and supports innovation.
We welcome input by 22 March 2023.
Reminder: notify us of any changes in status to your Appointed Representatives
Our analysis of Companies House data shows that some Principal firms fail to tell us when their Appointed Representatives (ARs) enter administration, liquidation or dissolution.
You must notify us immediately if there is a change in status to any ARs you oversee, including where they:
- go out of business – using a ‘Terminate AR’ form
- change name – using a ‘Change AR’ form
We also remind you of new rules that clarify and strengthen the responsibilities and expectations of Principals. Further information can be found in SUP 12.3 of the FCA Handbook and on the website.
British Steel pension redress scheme
The British Steel pension redress scheme will start on 28 February 2023. Firms will have until 28 March 2023 to identify all consumers within scope of the scheme. Firms must write to all British Steel Pension Scheme (BSPS) consumers within and outside the scope of the scheme by 28 March 2023. Further information about the steps that firms are required to take is available in the scheme rules.
In connection with the redress scheme, we set out final rules for an extended asset retention requirement for certain firms who provided transfer advice to BSPS members. We also sent a Dear CEO letter to pension providers and other firms that administer or manage the proceeds of BSPS transfers. The letter sets out their obligations under the scheme regarding sharing information.
British Steel pension scheme misleading redress offers
We have formally required two firms, Abbey Lane Financial Associates Limited and Estate Capital Financial Management Limited, to stop making unsolicited settlement offers to former British Steel Pension Scheme (BSPS) members. The firms will be required to apply the redress scheme to consumers who have accepted these offers in the same way they must for consumers who have not accepted offers. We will not tolerate this behaviour and we will take further firm action to put a stop to this sharp practice as needed.
Cryptoasset financial promotions regulation
This follows the Government’s policy statement on its approach to cryptoasset financial promotions regulation.
Cryptoasset firms must start preparing now for this regime to ensure they can continue to legally promote to UK consumers.
The future of Open Banking in the UK
Read the final report from the Strategic Working Group (SWG) on the Future Development of Open Banking in the UK.
The report provides extensive analysis and will form an important part of the input for the Joint Regulatory Oversight Committee (JROC) to consider as it develops its recommendations for the vision for open banking in the future.
Debt packagers: Feedback on CP21/30 and further consultation on new rules and perimeter guidance
We have issued a further consultation on proposals to ban debt packager firms from receiving referral fees from debt solution providers, following additional analysis of the market.
You now have the opportunity to comment on the proposed ban of referral fees and provide insight on any new developments in the market.
We’re also seeking views on proposed perimeter guidance to clarify where the regulated activity of debt counselling could be being carried out by unauthorised lead generators.
Innovation Advisory Group
We have announced appointments to our Innovation Advisory Group (IAG) which met for the first time on 16 February.
The IAG will provide early input into planned initiatives, bring to the FCA’s attention key issues or concerns impacting the FinTech and RegTech sectors, identify opportunities for continued innovation in financial services, and collaboration between the industry and the regulator. These initiatives will help the Innovation department achieve its objective of promoting competition in the interest of consumers.
Finance for positive change: governance, incentives and competence in regulated firms
As part of the key actions set out in our environmental social and governance (ESG) strategy, we have published a discussion paper to encourage an industry-wide dialogue on firms’ sustainability-related governance, incentives and competencies, and how these may need to change further if finance is to deliver on its potential to drive positive sustainable change.
Financial services and markets have an important role to play in the transition to a more sustainable future. In a field where there are many initiatives taking place, our aim is to help by highlighting good and evolving practices which can contribute to impactful change. We will use the feedback to consider what the industry would find most helpful in this fast-moving area and what direction our future regulatory approach should take.
You can read more from Director of ESG, Sacha Sadan in his recent blog.
Our consultation will end on 10 May 2023, and you can respond here.
Synthetic Data Call for Input
Synthetic data has the potential to expand access to quality data and drive innovation in financial services, all whilst protecting consumers’ right to privacy.
The Feedback Statement highlights our findings across various areas of synthetic data, including the key use cases, benefits, risks and the potential role a regulator could play in the provision of synthetic data. It also outlines the next steps for our synthetic data work programme, as we continue to work with industry and key stakeholders to encourage the responsible adoption of this technology.
Following the publication of the Feedback Statement, we will establish a Synthetic Data Expert Group as a sub-group of the Innovation Advisory Group. Applications are currently open and close on 8 March 2023.
Cessation of 1- and 6-month synthetic sterling LIBOR
In particular, firms should be prepared for 1- and 6-month synthetic sterling LIBOR to cease permanently at end-March 2023.
Read more information on initiatives and actions to support the transition away from LIBOR.
Respond to our request for information about Appointed Representatives (ARs)
In December 2022 we sent a mandatory Section 165 (S165) request to principal firms. This request reflects new rules requiring principals to provide more information about their Appointed Representatives (ARs) and strengthens the responsibilities and expectations of principals.
Principal firms with ARs must respond to this request by 28 February 2023.
We have provided S165 guidance for principal firms to help you complete the request.
Investment Scams Campaign launch
We have launched our latest ScamSmart campaign which provides investors with the tools to identify and avoid scams. Analysis of data from the FCA’s consumer helpline has shown a 193% increase in calls to the FCA in the last five years, as investors detect investment scam warning signs. In 2022, over £2m was saved by investors, who called the FCA to report the firm or individual before losing money.
Read more about the latest consumer campaign.
FCA censures Amigo Loans
We have publicly censured Amigo Loans Ltd for failing to conduct adequate affordability checks on borrowers and guarantors.
We would have imposed a fine of £72,900,000, however Amigo demonstrated that this would cause it serious financial hardship. A fine would also have threatened Amigo’s ability to meet its commitments to a High Court-sanctioned scheme of arrangement, which aims to pay redress to customers.
Between November 2018 and March 2020, Amigo did not have appropriate processes in place to ensure it adequately assessed borrower and guarantor circumstances before approving a loan. Amigo’s failures led to a high risk of consumer harm, both to borrowers and guarantors.
Primary Market Bulletin 43
We have published the 43rd edition of the Primary Market Bulletin in which we:
-
Highlighted the launch of multi-factor authentication for FCA systems (including the Electronic Submission System) to strengthen how firms and others log into our systems and to further protect and control access to our data.
-
Taken the opportunity to remind third country issuers of the equivalence of non-UK regimes and the financial reporting rules (DTR 4) exemption. In particular that we deem Generally Accepted Accounting Principles of the People’s Republic of China (Chinese GAAP) to be equivalent.
- Reminded stakeholders of the 24 February 2023 deadline for commenting on our digital reporting consultation CP23/2.
Back to the top
|
|
Financial Promotions Q4 data publication and Annual data publication
Our data, from 1 January 2022 to 31 December 2022, provides an overview of how we are working to improve standards across the market so that consumers are provided with clear, fair and not misleading financial promotions to enable them to make an informed decision before parting with their money. It brings together the data and themes reported in our quarterly financial promotions publications during 2022, where we significantly increased our intervention activity by 1398%. We expect firms to read this and take necessary steps to ensure they deliver good consumer outcomes.
Back to the top
|
|
|
Have your say - respond to our open consultations and discussions:
Back to the top
|
|
|
We have recently published the following portfolio letters:
Back to the top
|
|
Blog: Finance for positive, sustainable change
Sacha Sadan, Director of Environmental, Social and Governance (ESG) on why closing the say-do gap is key to tackling greenwashing and boosting confidence in ESG standards in his recent blog.
Blog: How we can help consumers cope during the cost of living squeeze
Sheldon Mills, Executive Director, Consumers and Competition on how we are working hard to make sure firms treat customers fairly during the cost of living pressures in his recent blog.
Consumer Duty events for retail investment and mortgage firms
From February to June 2023, we are hosting a series of Live & Local events across the UK on the Consumer Duty. These events are tailored to the needs of small and medium sized firms in the retail investment and mortgage sectors.
- the background to, and key elements of, the Consumer Duty
- the areas firms should consider to ensure you are meeting the new requirements
- how we are applying the Consumer Duty proportionately
- our supervisory approach to the implementation of the Consumer Duty
Visit our event website for the session dates and locations, and to register to attend.
Webinar: Implementing the outcomes of the Future Regulatory Framework (FRF) Review
We are hosting a webinar on 23 March 2023 to promote understanding of the steps we are taking to implement the Future Regulatory Framework (FRF) for the benefit of both industry and consumers.
-
the transfer of retained EU law
-
the new secondary objective on competitiveness and international growth
-
the updated cost benefit analysis processes
- the rule review
We will respond to pre-submitted and live questions, which you can submit when registering or during the webinar.
Back to the top
|
|
|
|
|
