We have published our General Insurance (GI) Value Measures data, warning that more action must be taken to ensure good consumer outcomes and to remind firms of our expectations to deliver fair value.

We have also written to Guaranteed Asset Protection (GAP) insurers and given them a month to propose how they will take action to address our concerns that some GAP products may be failing to provide fair value.

For GAP insurance products overall, only 6% of the amount customers pay in premiums is paid out in claims. In some cases we’ve seen firms paying out up to 70% of the value of insurance premiums in commission to parties in the distribution chain, such as motor dealerships.

Our GI product governance rules have been in place since 2021 and require insurers to ensure their products provide fair value.

See our recent press release and portfolio letters to understand what action you need to take. Any firms unable to prove they’re providing fair value to customers should expect further regulatory action.

We have set out our final policy position confirming the introduction of a gateway for firms who approve financial promotions.

Under the new rules, those approving financial marketing for unregulated firms will have to demonstrate they have the necessary skills and expertise, as well as understand the product to ensure the promotion is accurate and fairly balances risk and reward. They will also be required to report regularly to us on what they sign off and on any concerning adverts they cancel approval for.

Firms will need to apply between 6 November 2023 and 6 February 2024 to continue approving adverts, ahead of the new rules coming into force on 7 February 2024. Firms who have submitted an application can continue to approve adverts after this window until they receive a decision on their application.

To help firms prepare, we have also published information on applying to approve financial promotions.

These reforms build on our recent work, including: 

• strengthening advertising rules for high-risk investments 
• our proposals to revamp social media guidance for promoting financial products and services online
• taking assertive action in removing misleading adverts.

Higher quality adverts and a more informed consumer base will help support a thriving market for people to invest and save.

This month we published findings from our assessments of firms’ sanctions systems and controls, including examples of good and bad practice, to help firms deliver even greater compliance. Firms must calibrate their individual sanctions systems, processes and governance to the right risk level as we will continue our focus on this area and will take action where firms are not meeting our expectations.

The terms of reference of our review of the Politically Exposed Persons (PEPs) regime, were also unveiled this month. The review aims to maintain the UK’s high standards and clean markets while being robust and proportionate when considering risk around domestic PEPs. That’s why we are engaging with PEPs, firms and other stakeholders to understand whether we can make improvements to how the regime applies in the UK. Where we find persistent problems in managing that risk level, we will act.

Fighting financial crime is one of our top priorities and a key commitment in our 3-year strategy. We are taking an increasingly proactive, assertive and data-led approach to help ensure firms are effective in preventing financial crime, such as sanctions evasion and money laundering.

Our objective is to work with you to ensure UK financial services firms have the right systems and controls in place to make the UK increasingly inhospitable to financial crime.

The new Form A, used for Senior Management Function and Controlled Function applications, will be launched shortly.

The form will be gradually rolled out to frequent users of Form A based on the Senior Manager & Certification Regime (CM&CR) category.

Once available to your firm, you will be contacted by gateway.userresearch@fca.org.uk with information on how to access the improved form. You can find further support on our webpage.

During the transition period you can choose to continue submitting Form A applications using the old form, but this will be decommissioned once the new form rollout is complete.

We have published the findings of our initial data exercise on bank account access and closures.

The information supplied suggests that no firm closed an account between July 2022 and June 2023 primarily because of a customer’s political views. The Payment Accounts Regulations ban banks or building societies discriminating on this basis. The most common reasons providers gave for closing, suspending or declining an account was because it was inactive/dormant or because there were concerns about financial crime.

We will be doing further work with firms to verify the data and to better understand the reasons behind, for example, the closure of accounts due to reputational risk.

We want feedback on our proposals for transferring part of the regulatory requirements on insurance firms from current legislation into our rules.

We are bringing retained EU law into the Handbook to maintain the existing regulatory requirements.

The Treasury have announced their plan to repeal Insurance Distribution Directive (IDD) delegated acts. They intend the requirements of the regulations be included in our Handbook. So, we are consulting on changes to various sourcebooks intended to replace the provisions of the retained EU law being repealed.

Our proposals should be read alongside the Treasury’s draft statutory instruments.

We set out our expectations for cryptoasset businesses complying with a change in money laundering regulations legislated by the Government in July 2022. From 1 September 2023, UK cryptoasset businesses are required to collect, verify and share information about cryptoasset transfers, known as the ‘Travel Rule’.

The Travel Rule aligns practices for cryptoasset businesses sending and receiving transactions with those common in other areas of financial services.

Among our expectations are for cryptoasset businesses to take all reasonable steps and exercise all due diligence when complying with the Travel Rule. This includes fully complying with the Travel Rule when sending or receiving a transaction to a UK cryptoasset firm and remaining responsible for achieving compliance, even when using third-party suppliers.

In September, we said that we would offer authorised or registered cryptoasset firms more time to implement certain changes required by the new marketing rules due to come into effect on October 8.

Eligible cryptoasset firms must apply for the extension that would give them until 8 January 2024 to introduce features requiring greater technical development, like the 24-hour cooling-off period.

Cryptoasset firms must still be ready to comply with all other requirements of the rules by the October deadline.

To further support cryptoasset firms we also published examples of good and poor practice on firms’ preparations for the new marketing rules.

As part of our QCP issued on 1 September 2023 we consulted on a rule clarification regarding the interaction between SUP 12.4.10A and MIPRU 3.2.4R for Principal firms that use Appointed Representatives (ARs) for undertaking Mortgage Credit Directive (MCD) activities.

For clarity, the intention of the rules has not changed and MCD Principal Firms must hold PII which includes cover for the activities of their current and former ARs, as set out in our Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU).

For general information about Principal firms’ PII obligations, please see our website.

Direct Line Group has agreed a voluntary requirement having charged some existing home and motor customers more for their renewal than they would have done if they were a new customer.

Direct Line Group will carry out a review to identify all instances where a customer has been overcharged and provide appropriate redress. Affected customers will be contacted directly.

This is the first time a formal voluntary requirement has been agreed with a firm in relation to our motor and home insurance pricing rules.

In a review of later life mortgage firms, we have worked with the largest firms to improve their advice processes and prompted the removal or amendment of almost 400 misleading promotions.

The review looked at firms responsible for around half of all lifetime mortgage sales. It found in many cases advice did not meet the standards expected. For example, a lack of evidence that sufficient consideration of a consumer’s individual circumstances had been given and advice that lacked discussion of suitable alternatives.

We expect all firms to assure themselves they comply with existing rules and guidance and higher standards under the consumer duty.

We recently published our Consumer Credit (PSD) Returns Consultation Paper CP23/21, where we outline our proposals for collecting agreement level data on the Sales and Performance of consumer credit agreements.

We worked closely with firms and trade bodies, and encourage those affected to go through our proposals and give feedback to enable us to collect good quality data that supports our objectives in the consumer credit market while ensuring any burden on firms is proportionate to the benefits.

The consultation closes on 15 November 2023.

We have developed a user guide to assist firms in complying with the reporting requirements.

It outlines the steps involved, from uploading templates and submission sheets through to validation of errors messages, copying datastrings and when to provide these to the FCA.

All firms must ensure that we have the correct information for them by checking, amending (if required) and confirming their firms details at least annually, using Connect, in line with SUP 16.10 reporting requirements. Some of this information is published on the Financial Services Register. 

We have written to all dual regulated firms (firms supervised by the FCA and the PRA) to inform them that they will need to attest to their firm details within 60 business days of their Accounting Reference Date (ARD), from 1 December 2023. 

For more information, visit our website. 

Using data is key to our strategy to reduce and prevent harm from principal firms and ARs. From 1 December 2023, all principal firms will need to send us regular data about their ARs.

Principals must report data for all ARs they had during the relevant reporting period, including for any AR relationships that ended during that time.

When to report will depend on your account referencing date (ARD). Read more about what AR data principal firms must report to us and when.

To coincide with the launch of Hollywood film, ‘Dumb Money’, we are working to help consumers understand the impact that hype can have on investment decisions and encourage them to carry out careful research if tempted by an opportunity they find online.

The film chronicles the GameStop saga of early 2021, where inexperienced investors were tempted into the purchase of a high-risk investment.

The advert is part of the FCA’s ongoing InvestSmart campaign which encourages consumers to make better-informed investing decisions that suit their financial circumstances and attitude to risk.

We have updated the Defined Benefit Advice Assessment Tool (DBAAT) explainer videos to help firms understand how to use the DBAAT and interpret the results from a file review by us. You can also email us if you have any questions about how to use it.

The DBAAT was updated in June 2023 to incorporate rule changes that came into force since 1 October 2020 and our non-Handbook guidance in FG21/3. The latest version includes a section on assessing abridged advice and contingent charging. The information collection, suitability and disclosures sections have been fully updated to reflect the changes made in PS20/6.

As part of the authorisation application process, we are inviting mortgage intermediaries, via an email from their case officer, to apply for limitations on their permissions. These limitations will stop a firm broking second charge mortgages and lifetime mortgages where these products are not included in their submitted business plan.

A firm having limitations does not mean we have concerns regarding the firm’s business practices. We will still have assessed the firm as meeting our threshold conditions to broker first charge mortgages. These limitations will provide accurate information about the firm’s services to consumers on the Financial Services Register.

Along with the Bank of England, we have published the 2023 Q2 Mortgage Lending Statistics data for regulated firms carrying out mortgage lending and mortgage administration.

The data we publish includes:

• the outstanding value of all residential loans
• total gross advances by loan-to-value and income multiples
• value of new commitments
• proportion of mortgage loans above Bank Rate

The value of gross mortgage advances in 2023 Q2 was £52.4 billion, which was £6.3 billion lower than the previous quarter, and 32.8% lower than in 2022 Q2. This was the lowest observed since 2020 Q2.

Our Annual Public Meeting will take place on Wednesday 4 October 2023, 10am-12pm.

We will discuss our 2022/23 Annual Report and Accounts.

There will be an opportunity for questions to our Chair, Chief Executive, and executive directors.

We will look at how we have delivered against our strategic objective to make markets work well, and our 3 operational objectives of securing an appropriate degree of protection for consumers, protecting and enhancing the integrity of the UK financial system, and promoting effective competition in the interests of consumers.

Who should attend? 

Firms, consumers, trade associations and any other interested parties. 

Where? 

The event will be held virtually. Register via our booking page.