With the 31 July implementation deadline for the Consumer Duty fast approaching, Sheldon Mills, Executive Director, Consumers and Competition, gave a speech urging firms to ensure they are ready.

When the Duty comes into force, firms need to make sure – and be able to show us – that they are acting to deliver good customer outcomes and protect consumers from harm.

In his speech, Sheldon set out how our supervisory and enforcement approach will be proportionate to the harm – or risk of harm - to consumers, with a sharp focus on outcomes.

We will prioritise the most serious breaches and act swiftly and assertively where we find evidence of specific products or practices that pose harm or risk of harm to consumers.

We acknowledge the work undertaken by financial services firms to implement the Duty and sets out how it could boost the competitiveness of the sector.

To further support firms, we have also shared findings from our review of firms’ fair value assessment frameworks which highlights good practice and areas for further consideration.

The review found that firms had carefully considered our price and value requirements, but that some firms have more work to do to meet the rules.

We set out 4 key areas for firms to focus on which include collecting evidence that demonstrates products represent fair value and having clear oversight of actions to take if products do not provide fair value.

We have published new research from our Financial Lives survey on the consumer experience of the rising cost of living.

Our research shows that the number of people struggling to meet bills and credit repayments has risen by 3.1m since May 2022 to 10.9m, compared to 7.8m in May 2022.

The number of adults who missed bills or loan payments in at least three of the last six months has also gone up by 1.4m, from 4.2m to 5.6m.

And we found that the cost of living is having an impact on people’s mental wellbeing. Around half of UK adults, or 28.4m people, in January 2023 felt more anxious or stressed due to the rising cost of living than six months earlier.

This research highlights the real impact the rising cost of living is having on people’s ability to keep up with their bills, although we are pleased to see that people have been accessing help and advice.

The help people need to deal with the cost of living goes well beyond financial services. But firms have a vital part to play in supporting people through these tough times. We expect firms to treat customers fairly and provide them with an appropriate level of care and support, particularly customers in vulnerable circumstances.

More information for firms on supporting consumers struggling with the cost of living is available on our website.

Find out more about the new financial resilience regulatory reporting return we are introducing, covering approximately 20,000 firms that are prudentially regulated by us.

The return will be referred to as FIN073 - Baseline Financial Resilience Report. It will replace the current FCA Financial Resilience Survey.

Firms brought into scope of FIN073 need to be prepared to submit the return when it is due, from January 2024.

Firms will receive an automated reminder via RegData when the return is available for submission.

We will publish our final position on the scope in Summer 2023, following the closure of CP23/9.

In May we set out actions to improve the confidence of whistleblowers – including: 

• plans to share further information with whistleblowers on how we’ve acted on their information 
• improving the use of information provided by whistleblowers; and  
• improving how we capture information from whistleblowers  

This follows a qualitative survey of whistleblowers who had provided information to the FCA, to understand their experience and identify areas for improvement.

Anyone who thinks a firm or individual is involved in wrongdoing in an area we regulate can make a report in confidence. Every report we receive will be considered and will have their identity protected.

We have identified common errors that can create additional work for some firms when reporting Professional Indemnity Insurance (PII) cover via RMA-E-returns.

To avoid unnecessary issues which may need to be resolved between the FCA and firms, when completing your submission (qs 1 and 2) please make sure you confirm: 

• If your PII cover has renewed since your last submission, including if renewal fell in the last 6-months. If you hold cover that hasn’t renewed since your last return, confirm you hold PII cover that has not renewed.  
• If your cover has been extended. Where existing cover is due to end, confirm it as a renewal of PII cover.  
• Any changes to renewed cover eg level of excess, period of cover, or exclusions. 

Further guidance to help complete returns is here and here.

Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has published its latest report report on progress made in tackling money laundering by professional body supervisors (PBSs) in the accountancy and legal sectors over the 2022/23 period.

The report finds that PBSs continue to demonstrate good levels of compliance with their obligations under the Money Laundering Regulations and deliver iterative improvements in effectiveness.

However, improvements in effectiveness are still not consistent in pace or scale across all PBSs.

OPBAS will continue to take proactive steps to enhance the effectiveness of the AML supervision in line with its FCA’s Business Plan commitment to reduce and prevent financial crime.

We have published our Authorisations operating service metrics - Quarterly Update covering January to March 2023 (Q4).

We are now reporting our authorisations metrics on a quarterly basis to provide greater transparency of our performance.

We have taken action against a third firm for seeking to avoid liabilities under the British Steel Pension Scheme (BSPS) redress scheme.

Under the scheme, firms must review the advice they gave and pay redress to those who lost money because the advice was unsuitable. The aim of the redress is to put people back in the financial position they would have been in at retirement had they stayed in the BSPS.

We have also published a Dear CEO letter to raise our concerns to firms that have calculated redress using third party actuarial providers’ online portals, without any actuarial oversight, prior to the redress scheme commencing.

Where firms have calculated redress for former BSPS members using third party services, they should review those offers, even where they have been accepted on a full and final basis, and notify us. We expect firms to use our calculator for all BSPS cases.

We issued a press release announcing we have censured Lighthouse Advisory Services Limited (Lighthouse) for the unsuitable advice given during the period 1 April 2015 to 30 April 2019 to people looking to transfer out of defined benefit pension schemes, including to members of the BSPS.  

During this period, Lighthouse advised 1,567 customers, 262 of whom were members of the BSPS. 

We recently published a Policy Statement setting out rule changes to improve how equity secondary markets operate. They aim to enhance execution quality for investors by lowering the cost of trading, reducing market impact and ultimately increasing liquidity. We also want to improve post-trade transparency.

The changes include the introduction of a new Designated Reporter regime, clarifying who holds the obligation of making sure that a trade is made public.

It aims to establish a simpler and clearer regime for the reporting of Over-The-Counter (OTC) transactions.

The Dormant Assets Scheme (DAS) allows banks and building societies to pay dormant monies to an authorised reclaim fund which then puts this money towards funding good causes. We have been working closely with Government and Reclaim Fund Limited (RFL) to support expansion of the scheme.

We agreed with the Government and RFL that expansion will be phased. This is to reflect the differences between the different asset classes and their resolution processes. We are now consulting on proposed amendments to our rules and guidance to enable investment funds and client money to the expanded scheme.

We are asking for comments on this Consultation Paper by 10 July 2023.

We are asking for views about the following issues under the new public offers and admissions to trading regime:

• how we should approach setting requirements for issuers seeking to have securities admitted to trading on regulated markets 
• our initial thinking about requirements for further issuances of equity securities  
• how we should define protected forward-looking statements and how this information should be presented in a prospectus 
• how we may improve the regime for non-equity securities 

We will be holding focus groups to discuss these issues in the next few months and welcome written responses by email to the questions raised by the engagement papers by 29 September 2023. Please email: POATR@fca.org.uk.

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)   
• Electronic Submission System (ESS) 

To continue to access FCA systems you will need to register and turn on multi-factor authentication by 31 May 2023. You’ll be prompted when you log in. See our website for more information and resources.

We have published the most recent data on the volume of complaints reported by firms during the second half (H2) of 2022. 

We use the complaints data to help assess how well firms are treating their customers and how their performance changes over time.  

Key findings include: 

1. In 2022 H2, financial services firms received 1.79m complaints, a decrease of 6% from 2022 H1 (1.91m).  

1. The product groups that experienced a decrease in their complaint numbers were banking and credit cards (5%), insurance and pure protection (10%), and investments (10%).  

Visit our website for further information and data visualisations. 

Our data shows the number of new whistleblowing reports we received between October and December 2022 and how the information was received. 

We received 276 new whistleblowing reports between October and December 2022, containing 785 allegations in total. 

Typically, the reports we receive will contain allegations that fall under 5 areas: 

• fitness and propriety   
• treating customers fairly   
• FSMA   
• culture 

Our latest data shows between January and March 2023, we reviewed 539 financial promotions.

Following our intervention with 47 authorised firms, 2,235 financial adverts were amended or withdrawn. 90% of our interventions were in the retail investments and retail lending sectors.

Some of the most common breaches involved credit brokers, lenders and firms promoting high-risk investments.

Find out more about our actions against firms breaching financial promotion rules, and referrals and investigations into unregulated activity for 2023 Q1.

Sarah Pritchard spoke about how the FCA is working with influencers to tackle the promotion of illegal or risky investments.

She also warned firms they must constantly update their controls to make sure they can foil the ever-changing risks and threats to customers.

We are hosting a series of Live & Local events across the United Kingdom on the Consumer Duty.

Aimed at small and medium sized firms, the events focus on the Retail Investment and Mortgage sectors.

Additional sessions for Retail Investment firms are now available in Sutton Coldfield (8 June) and London (13 June).

To view availability and register to attend, please visit our booking portal.