FCA Publications – January to March 2014

by | Apr 7, 2014

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The following abbreviated summary of FCA publications and announcements has been compiled by IFA Magazine, based on information published on the FCA’s own website. It is not the FCA’s own listing, which can be found at www.fca.org.uk/news.

TR14/5: Supervising Retail Investment Firms: Delivering Independent Advice (TR14/5)

Thematic Review

Published: 20/03/2014  

The FCA has completed the second cycle of work into findings looking at how firms and advisers were implementing the Retail Distribution Review (RDR).

FCA and Bank of England Agree Memorandum on Supervision of Markets and Market Infrastructure


17th March 2014     1 Page


The FCA and the Bank of England, including the Prudential Regulation Authority (PRA), declare that they have agreed a Memorandum of Understanding on how they are to co-operate in relation to the supervision of markets and market infrastructure, which includes financial market infrastructures (FMIs).

The annual agreement is in fulfilment of a requirement contained in the Financial Services Act 2012, and incorporates feedback from industry. This is the first time that the review has been conducted, following the commencement of the new regulatory responsibilities in April 2013.

Consumer Credit Countdown – Review into Debt Collection Practices of Payday Lenders

Press Release         Ref: PN/25/2014


12th March 2014

The FCA declares that payday lenders and other high cost short term lenders will be the subject of an in-depth thematic review into the way they collect debts and manage borrowers in arrears and forbearance.

The regulator says that the review would be one of the first actions the FCA takes as regulator of consumer credit, a function which was due to begin on 1st April 2014. It will look at how high-cost short term lenders treat their customers when they are in difficulty. This will include how they communicate, how they propose to help people regain control of their debt, and how sympathetic they are to each borrower’s individual situation.


Around 50,000 consumer credit firms were expected to come under the FCA’s remit on 1at April, of which around 200 are payday lenders. 

General Insurance Add-On Industry Required to Make Changes

Press Release      Ref: PN/24/2014

11th March 2014


The Financial Conduct Authority (FCA) declares that it proposes a shake-up of the £1bn general insurance add-on markets, including banning pre-ticked boxes, forcing firms to publish claims ratios and breaking the point of sale advantage for guaranteed asset protection (GAP) insurance, usually offered alongside car sales.

Changes to Regulatory Reporting: Adviser and Consultancy Charging, Authorised Professional Firms and Product Sales Data

Consultation Paper Ref: CP14/5

7th March 2014   37 Pages


Of interest to all financial advisers and authorised professional firms.

The regulator proposes a number of changes to the data it collects from certain regulated firms through the Retail Mediation Activities Return (RMAR) and annual questionnaire for Authorised Professional Firms (APFs). The aim is to:

·        Provide greater clarity around the adviser charging data that firms should report through Section K of the RMAR;


·        Introduce changes to data collection so as to reduce the reporting obligation for firms

·        Retire Section L of the RMAR, which relates to consultancy charging.

Consultation findings are to be incorporated in a Handbook Notice policy statement in late 2014

No final date was specified for responses.

The FCA’s Regulatory Approach to Crowdfunding over the Internet, and the Promotion of Non-Readily Realisable Securities by Other Media

Policy Statement    Ref: PS14/4

6th March 2014  37 Pages

The statement summarises and gives response feedback to CP13/13 (The FCA’s regulatory approach to crowdfunding and similar activities).

It also publishes the rules that were due to come into force on 1st April 2014. The FCA says that it plans to review the crowdfunding market and regulatory framework in 2016, to identify whether further changes are required.

Quarterly Consultation Paper No. 4

Consultation Paper  Ref: CP14/4

6th March 2014  19 Pages

The FCA proposes to:

·        Make minor changes to the Handbook impacting AIFMs, UCITS managers and certain AIF depositaries

·        Make minor changes to the complaints data reporting form and update guidance

·        Clarify the scope of mortgage Product Sales Data performance data reporting for firms who own regulated mortgage contracts but who do not have the ‘entering into’ permission, and

·        Amend the Handbook to implement the Financial Policy Committee’s recommendation on interest rate stress tests for mortgages.

Consultation Period ended 4th April

How the FCA Could be More Transparent 

Discussion Paper   Ref: DP13/1

5th March 2014  34 Pages

The regulator is opening a discussion on the following:

o   How the FCA could be more transparent: disclosing information about whistle-blowing, saying more about information received and actions taken, and publishing more about enforcement activities;

o   Information that could be released about firms, individuals and markets, the transparency of the authorisations process and the redress process, and the transparency of the FCA’s thematic work and early interventions;

o   Information that firms could be required to release;

o   Improved transparency in the annuity market;

o   Contextualisation of complaints data; and

o   Publication of claims data for insurance products.

Consultation period ends 26th April 2014

Review of Implementation of Platform Rules

Thematic Review 

3rd March 2014    Video length 6 minutes 30 seconds

The FCA presents a video on its findings about how firms are preparing for the implementation of the new platform rules. The video may be found at http://player.vimeo.com/video/87689875.

Platforms have become an important part of the investment market, the regulator says, with as many as 3 million customers using them to invest a total of more than £250bn of assets. Around 80% of new retail investment business is now done through platforms.

The FCA confirmed its new rules on platforms last year, when it committed to support firms in preparing for the implementation of these rules. It was decided to carry out a thematic review to assess how platforms were preparing for the implementation of the new rules on 6 April 2014.

Final Rules for Consumer Credit Firms

Policy Statement   Ref: PS14/3

28th February 2014   294 Pages

The Policy Statement contains detailed rules for consumer credit firms, in respect of the FCA’s assumption of the regulation for around 50,000 consumer credit firms from the Office of Fair Trading (OFT) on 1st April 2014.

The Statement follows from last October’s consultation paper outlining proposals which included setting higher standards for high-cost short-term credit, including payday lending, and debt management firms.

The FCA says that, while it has carried across many standards from the Consumer Credit Act (CCA) and the OFT guidance, it has also set higher standards for payday and other high-cost short-term lenders and for debt management firms.

Annuity Comparison Websites – Thematic Review and Guidance for Firms

Guidance Consultation   Ref: GD 14/1

14th February 2014    4 pages

Likely to be of most relevance to operators of annuity comparison websites and annuity providers.

The FCA recently carried out a thematic review of 13 annuity comparison websites, to assess whether they were fair, clear and not misleading. The regulator found good practice in the presentation of alternative options to buying an annuity, such as deferring or pension drawdown, and the use of jargon-free language. But all the websites raised other concerns, with key information and risk warnings often missing or insufficiently prominent.

The FCA says that this guidance will make clear its expectations of firms and will also improve the level of compliance across the sector, level the playing field for firms, and ultimately lead to better consumer outcomes.

Consultation period ended14th March 2014

Transition Management Review

Thematic Review   Ref: TR 14/1

10th February 2014    13 pages

The FCA’s review looked at how firms move investment portfolios between different managers and markets for asset owners (such as pension funds). It explored the size of the market and the business models carried on within it, and it examined the levels of oversight, governance and controls within the firms conducting transition management.

Key findings:

  • Scale of TM industry – Transition Management extends to £165bn of assets being moved annually, via around 700 mandates.
  • Complexity of TM – Complexity and the fast pace of business give rise to a need for careful management.
  • Regulatory obligations are clear – The existing rules and guidance (particularly SYSC 10 and COBS 2 and 11) set a high standard, and no changes are necessary.
  • Oversight and governance can be limited – Transition management is often a small part of a firm’s business and can sometimes be overlooked by control functions and senior management.
  • Transparency – Deficiencies in transparency and communication were found at some firms.

Follow ups will ensue with individual firms to ensure ongoing compliance.

CPP Redress Scheme Opens – Customers Have Until End of August 2014 to Claim

Press Release   Ref: FCA/PN/09/2014

3rd February 2014

The FCA reminds the public that  seven million people who bought Card Protection and/or Identity Protection products from Card Protection Plan Limited (CPP) or from their bank or card providers can start claiming compensation from mid-February.

Final claims must be presented by 30th August 2014, with the first compensation payments expected to be made from late March 2014. The total redress bill may reach to £1.3 billion

General Guidance on the AIFM Remuneration Code

Finalised Guidance  Ref: FG14/2

31st January 2014   22 pages

The FCA has finalised its guidance on the AIFM remuneration code (SYSC 19B). The announcement follows on from the consultation of September-November 2013, and the guidance explains, among other things, how an AIFM should:

  • Take into account proportionality.
  • Consider payments made to partners if the AIFM is structured as a partnership.
  • Pay its relevant staff in units, shares or other instruments.

Incoming Statutory Regime for Primary Information Providers – Including Feedback on CP13/8 and Final Rules

Policy Statement   Ref: PS 14/2

31st January 2014   32 pages

This Policy statement publishes final rules on the statutory regime for Primary Information Providers (PIPs), and includes the responses received to CP13/8 and earlier consultations CP12/3, CP13/5 and CP13/6 and supplementary consultation (August 2013).

Regulated Information Services were brought into formal statutory regulation by the Financial Services Act 2012. Going forward, they will be known as Primary Information Providers (PIPs). The FCA declares that the new statutory regime will be based largely on the existing framework for the approval and oversight of Regulated Information Services, set out in the Criteria for Regulated Information.

Distribution of Retail Investments: Referrals to Discretionary Investment Managers and Adviser Complaints Reporting

Policy Statement   Ref: PS 14/1

31st January 2014   11 pages

This policy statement publishes final rules on the first two of the proposals the FCA consulted on in CP13/4, in July 2013. Details of the third proposal are to follow in June 2014.

The rules are part of the Retail Distribution Review (RDR). The sections dealt with here:

  • Ban new referral payments by a discretionary investment manager (DIM) to an adviser when the adviser recommends that a client places additional money with the same DIM from whom they receive payments following a pre-RDR referral.
  • Ban referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them.

Proposed Amendments to the Listing Rules in Relation to Sponsor Competence and Other Amendments to the Listing Rules

Consultation Paper Ref: CP 14/12

31st January 2014  30/1/14

This consultation paper sets out the FCA’s proposals to amend the Listing Rules and Guidance on sponsor competence as well as seeking market views on joint sponsor arrangements.

Consultation period ends 30th April 2014


£31m Compensation Payout Under Arch Cru Consumer Redress Scheme

Press release  27th January 2014 1/14

The FCA confirms that compensation has now begun to be paid by financial advisers to people who invested in the CF Arch cru Investment and Diversified funds as a result of unsuitable advice. Over £8.26m has so far been received by consumers, and the final payout is put at £31.47 million.

The money paid out under the scheme, which was overseen by the Financial Conduct Authority (FCA), is in addition to any redress investors may have received under a separate process administered by Capita Financial Managers.

Financial Services Compensation Scheme – Management Expenses Levy Limit 2014/15

Consultation Paper Ref: CP 14/1

20th January 2014  15 pages

This joint Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) consultation paper (CP) outlines the proposed management expenses levy limit (MELL) for the Financial Services Compensation Scheme (FSCS) for 2014/5.

The MELL being consulted on for 2014/15 is £80 million.  This consists of FSCS management expenses of £74.7 million, plus a contingency reserve of £5.3 million.

Consultation period ended 17th February 2014

Supervising Retail Investment Advice: Inducements and Conflicts of Interest

Finalised Guidance  Ref: FG14/1

16th January 2014   18 pages

The Guidance follows on from the September 2013 consultation (GC13/5) on how payments made by providers to advisory firms under service or distribution agreements can breach Principle 8 (Conflicts of interest) and the COBS inducements rules, and so undermine the objectives of the Retail Distribution Review.

The FCA is now publishing finalised guidance, along with a summary of the feedback received.

Mortgage Market Review

Policy Statement   Ref: PS 13/12

16th December 2013    97 pages

This Policy Statement, on data collection, is the third and final publication in a series of Mortgage Market Review (MMR) policy documents. The MMR introduces a package of reforms for the mortgage market, with a focus on responsible lending.

The statement follows on from Consultation Paper CP13/02 (Mortgage Market Review – Data Reporting) from May 2013, which set out proposals on collecting additional data about mortgages, enabling the FCA to monitor and supervise conduct in the mortgage market following MMR, and to monitor compliance with the new prudential requirements for non-deposit taking mortgage lenders (non-banks).

Most of the relevant reforms will take effect from 26th April 2014. The data collection rules will come into force on 1st January 2015.

Changes to the Listing Rules

Policy Statement   Ref: PS 13/11

13th December 2013    29 pages

This Policy statement, fully entitled ‘Consequential Changes to the Listing Rules resulting from the BIS Directors’ Remuneration Reporting Regulations and Narrative Reporting Regulations, reports on the main issues arising from Consultation Paper 13/7 of the same name, and publishes the final rules.

Apart from a minor amendment to the timetable for implementing the new rules, the document has not been amended since the consultation process.

The implementation date will be 13th December 2013 for listed companies with a financial year ending on or after 30 September 2013 that have not published their annual financial report on or before that date. Others which are already preparing their annual financial report in compliance with the existing rules may continue to publish after 13 December 2013.

Quarterly Consultation Paper No. 3 (CP13/18)

Consultation Paper  Ref: CP13/18 

20th December 2013    78 pages

The FCA proposes to:

  • Make minor amendments relating to the transfer of consumer credit regulation from the Office of Fair Trading (OFT) to the FCA
  • Introduce an administrative charge to recover costs of dealing with late publication of periodic financial reports under the disclosure and transparency rules
  • Improve authorised fund managers’s ability to communicate electronically with unitholders
  • Amend the procedures for processing a waiver application

Consultation period ends 17th January 2014 for Chapter 2, and 6th February for all other chapters

CP13/17 – Use of 

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