REGULATORYINFORM

AUG:19

QUARTERLY NEWSLETTER

TREASURY COMMITTEE REPORT ON CONSUMERS’ ACCESS TO FINANCIAL SERVICES The Treasury Committee, following an inquiry launched on the 9 November 2018, has published its report on consumers’ access to financial services. The inquiry was launched to assess, among other things:

• the Financial Conduct Authority’s definition of vulnerability and whether it can be practically applied by financial services providers

• whether certain groups of consumers are excluded from obtaining a basic level of service from financial services providers

• whether vulnerable consumers pay more for financial services products.

TREASURY COMMITTEE, 10 MAY 2019

FCA SMALLER FIRMS SURVEY ON HOW REGULATION IMPACTS THEMIn January 2019 the Financial Conduct Authority (FCA) announced that it was carrying out a survey of smaller firms on how FCA regulation specifically impacts them. This would help ensure FCA cost benefit analyses and judgements of proportionality take account of smaller firms’ circumstances.

The independent consultancy Kantar Public, on behalf of the FCA, conducted in-depth interviews, initially with a small representative sample of around 30 firms. These interviews informed the design of an online questionnaire, which was sent to a larger sample of firms in April and May 2019. The FCA aimed to receive 2,000 responses. Firms were not required to participate but for those who did or will, Kantar anonymise all answers given.

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Over the last three months, Graham Haxton-Bernard our legal expert, has been collecting details of legislation, regulatory updates and other announcements which he thinks maybe of interest to you. These pages are designed to provide an essential ‘easy read’ for our members.

CONTACTS

Consumer Credit Trade Association A company limited by guarantee and registered in England. Registered number 00034278. VAT number 232 4655 76. Registered Office Address: Airedale House, Aire Valley Business Park, Dowley Gap Lane, Bingley, BD16 1W.

T: +44 (0)1274 714 959 F: +44 (0)1274 928365

Greg Stevens Chief Executive greg.stevens@ccta.co.uk

Graham Haxton-Bernard Head of Legal, Compliance and Regulatory Policy graham.haxton-bernard@ccta.co.uk

Anne Threapleton Head of Marketing and Communications anne.threapleton@ccta.co.uk

Debbi Gower Head of Finance, Complaints and Conciliation debbi@ccta.co.uk

Phillip Harding Membership Services Manager phillip.harding@ccta.co.uk

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FOS ANNUAL REVIEW 2018/2019The Financial Ombudsman Service (FOS) published its annual review for 2018/2019 covering the main stories in banking, borrowing, insurance, investments, pensions and PPI over the last financial year. Alongside its annual review, the FOS also published its independent assessor’s annual report, and its management response to it. The review quoted that 388,000 new complaints were received by FOS in the period, an increase of 14% on the previous year. The review also quoted an 89% overall increase, in the period, of new complaints in relation to consumer credit products and services and a 130% increase in the period of new complaints in relation to payday loans (HCSTC).

FOS, 15 MAY 2019

FCA NOTICE OF UNDERTAKING ON UNFAIR TERMS IN DEBT MANAGEMENT CONTRACTThe Financial Conduct Authority has published an undertaking from Capital Financial Management Limited regarding potentially unfair terms in its debt management contract. The undertaking has been provided under the Consumer Rights Act 2015 and the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). The undertaking is in relation to: i) two cancellation charge terms, which had the potential to be considered unfair as they gave the firm sole discretion in respect of the costs it could charge, if consumers cancelled the contract; and ii) a third term where it was not clear what notice period consumers had to give to cancel the contract.

FCA, 23 MAY 2019

FCA LIVE WEBINAR: PREPARING FOR THE SENIOR MANAGERS & CERTIFICATION REGIME (SM&CR)The live webinar took place on 3 June 2019 in which it was explained why the SM&CR is important and how firms should plan for and implement the regime.

A Q&A session with the speaker panel followed the main presentation speakers:

• David Blunt, Head of Conduct Specialists, FCA

• Anisha Acharya, Supervision Hub, FCA

• Peter Ewing, SM&CR, FCA

• Alex Smith, Culture and Governance, FCA

• Robert Sinclair, Association of Mortgage Intermediaries

The webinar is now available on demand at: https://event.on24.com/wcc/r/2006354/521E1DB55DF2F0CBFD728AC36BDD16C7?mode=login&email=graham@ccta.co.uk

BARONESS MANZOOR TO CHAIR FINANCIAL OMBUDSMAN SERVICEThe Financial Conduct Authority has confirmed that Baroness Zahida Manzoor CBE has been appointed chair of the Financial Ombudsman Service, and will replace Sir Nicolas Montagu on 2 August 2019. Baroness Manzoor has previously served as the Legal Services Ombudsman for England and Wales, and the Legal Services Complaints Commissioner.

FCA, 5 JUNE 2019

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FCA ANNOUNCES OVERDRAFT OVERHAUL FINAL RULESThe Financial Conduct Authority (FCA) announced it is introducing reforms to fix a dysfunctional overdraft market. These changes will make overdrafts simpler, fairer, and easier to manage and will protect the millions of consumers that use overdrafts, particularly more vulnerable consumers. The changes represent the biggest overhaul to the overdraft market for a generation. The reforms include:

• stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts

• banning fixed fees for borrowing through an overdraft – calling an end to fixed daily or monthly charges, and fees for having an overdraft facility

• requiring banks and building societies to price overdrafts by a simple annual interest rate

• requiring banks and building societies to advertise arranged overdraft prices with an APR to help customers compare them against other products

• issuing new guidance to reiterate that refused payment fees should reasonably correspond to the costs of refusing payments

• requiring banks and building societies to do more to identify customers who are showing signs of financial strain or are in financial difficulty, and develop and implement a strategy to reduce repeat overdraft use.

Extensive FCA research with consumers showed that they also wanted to see the cost of borrowing set out in pounds and pence alongside an APR and interest rate. UK Finance have agreed to implement this alongside the FCA’s remedies.

Andrew Bailey, chief executive of the FCA said: “The overdraft market is dysfunctional, causing significant consumer harm. Vulnerable consumers are disproportionately hit by excessive charges for unarranged overdrafts, which are often ten times as high as fees for payday loans. Consumers cannot meaningfully compare or work out the cost of borrowing as a result of complex and opaque charges that are both a result of and driver of poor competition. Our radical package of remedies will make overdrafts fairer, simpler and easier to manage. We are simplifying and standardising the way banks charge for overdrafts. Following our changes we expect the typical cost of borrowing £100 through an unarranged overdraft to drop from £5 a day to less than 20 pence a day”.

The FCA said the new rules would start by April 2020.

FCA, 7 JUNE 2019

NEW FCA WEBPAGE: CHECKLISTS FOR SOLO-REGULATED FIRMS IMPLEMENTING SM&CRThe Financial Conduct Authority has published a webpage containing checklists to assist solo-regulated firms in implementing the Senior Managers and Certification Regime (SM&CR).

These checklists bring together information from the SM&CR guide for solo-regulated firms about what they need to do to implement SM&CR, depending on the firms’ categorisation.

FCA, 5 JUNE 2019

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FCA PUBLISHES EXPECTATIONS OF CMC’S ‘DEAR CEO’ LETTER In the letter the Financial Conduct Authority (FCA) reiterates its expectations of claims management companies (CMCs) when they carry out financial promotions and/or act for their customers.

This is because the FCA has recently seen an increase in problem cases, and want to ensure customers’ interests are protected. The problems the FCA have found indicated there has recently been an increase in the volume of cases where:

• CMCs are acting for their customers without getting their appropriate consent or completed letters of authority

• CMCs are submitting letters of authority and claims in fictitious customer names

• there is no relationship between the customer and the financial service provider receiving the claim

• CMCs’ financial promotions do not comply with FCA rules.

FCA, 4 JUNE 2019

The Policy Statement (PS 19/17) summarises the feedback the FCA received, and sets out its response to it. The FCA are going ahead with their proposals in CP18/43, subject to some small technical changes to the definition of BNPL credit. The FCA also confirmed extending the implementation period for the backdating interest remedy, so that firms have enough time to implement this significant change properly. Affected firms need to comply with:

• the disclosure rules and guidance by 12 September 2019

• the rule preventing backdated interest from being charged on repaid amounts by 12 November 2019.

The FCA will monitor the market to assess whether its new rules and guidance are leading to improved consumer outcomes. If it sees evidence of consumer harm from, for example, changes to pricing that are designed to recover revenue from the consumers it is seeking to protect with its rules and guidance, the FCA will take further action.

FCA, 12 JUNE 2019

FCA’S ANNUAL PUBLIC MEETING 2019The Financial Conduct Authority (FCA)’s Annual Public Meeting 2019 took place this year on 17th July at The Brewery, 52 Chiswell Street, London, EC1Y 4SD. The meeting ran from 9.30am until midday.

At the meeting the FCA discussed its 2018/19 Annual Report and Accounts and there was an opportunity for questions to the Chair, Chief Executive and directors of the FCA.

FCA, 27 JUNE 2019

FCA PUBLISHES FINAL RULES AND GUIDANCE ON BUY NOW PAY LATER PRODUCTSThe Financial Conduct Authority (FCA) has published its final rules and guidance on Buy Now Pay Later (BNPL) products in its Policy Statement PS19/17: ‘Buy Now Pay Later offers – feedback on CP18/43 and final rules’. In December 2018, the FCA consulted in CP18/43: ‘High-cost Credit Review Feedback on CP18/12 on a package of remedies relating to BNPL offers, including:

• three proposed disclosure remedies, designed to improve the information consumers receive about these offers i.e. adequate explanations, prompts and guidance on advertising and other communications that firms should present BNPL offers in a clear and balanced way, highlighting relevant risks in a prominent manner. This could include the limitations that might apply to promotional or introductory offers, and the circumstances and method by which they apply interest

• a proposal to prevent firms charging backdated interest on money that the consumer has repaid during the BNPL offer period.

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CCTA | REGULATORY INFORM 5

THE FCA WILL MONITOR THE MARKET TO ASSESS WHETHER ITS NEW RULES AND GUIDANCE ARE LEADING TO IMPROVED CONSUMER OUTCOMES. IF IT SEES EVIDENCE OF CONSUMER HARM, THEY WILL TAKE FURTHER ACTION.

GOVERNMENT TO INTRODUCE ‘BREATHING SPACE’ SCHEME FOR PEOPLE WITH DEBT PROBLEMSHM Treasury has announced a new scheme that will give 60 days of breathing space to individuals struggling with problem debt. During the period, people will be protected from enforcement action, and their interest will be frozen, though they will be required to seek advice from professional debt advisors to get back on track with payments. The scheme will cover various kinds of debt, including arrears owed to the Government in the form of council tax, personal tax, and benefits overpayment repayments. The scheme also includes a Statutory Debt Repayment Plan (SDRP), which on the other hand would enable someone in problem debt to enter a statutory agreement to repay their debts to a manageable timetable. The Government indicated that the two interventions should be viewed separately. A debtor would be able to enter breathing space without then entering an SDRP, and a debtor would also be able enter an SDRP without having first entered a breathing space.

As part of these plans, and to acknowledge the links between problem debt and mental health issues, the government is also confirming that individuals receiving NHS treatment for mental health crisis will not need to seek debt advice during the 60-day period. This will remove a key barrier to access for this group. They will continue to receive the same breathing space protections, which will last for the whole of their treatment. The announcement follows a consultation that concluded in January 2019, with the scheme set to be put to a parliamentary vote by the end of 2019, and implemented in early 2021.

HM TREASURY, 19 JUNE 2019

FCA PUBLISHES ITS FIRST ANNUAL REPORT ON THE ‘PERIMETER’The Financial Conduct Authority (FCA) perimeter determines which firms require authorisation and what level of protection consumers can expect for the financial services and products they purchase. The report, which will be published yearly, sets out:

• what the FCA does and doesn’t regulate

• what challenges the perimeter presents and the actions the FCA is taking to overcome them

• what this means for consumers

• whether there are any issues with the perimeter which might require legislative or other changes.

Andrew Bailey, chief executive of the FCA, said: “We appreciate that the current perimeter is complicated. The boundary between which firms and activities do or don’t require regulation, is being constantly tested. The recent behaviour of some firms operating around the perimeter has caused serious consumer harm and reduced trust in regulated financial services markets. We (the FCA) will publish this report annually from now on, in order to highlight issues around the perimeter”.

FCA, 19 JUNE 2019

FCA CONFIRMS REGULATED FEES AND LEVIES 2019/20The Financial Conduct Authority (FCA) has published PS19/19, FCA regulated fees and levies 2019/20: Including feedback on CP19/16 and ‘made rules’, in which it sets out the periodic regulatory fees and levies for the FCA, Financial Ombudsman Service general levy, Devolved Authorities, Money and Pensions Service, and the illegal money lending levy.

FCA, 1 JULY 2019

FOS OPENS CONSULTATION ON FUTURE FUNDING SYSTEMThe Financial Ombudsman Service (FOS) opened a consultation on its proposed future funding system, the key proposals of the consultation being: the rebalancing of the proportion of the FOS’s income it gets from levies compared with case fees; a reduction in the number of ‘free’ cases from 25 to ten per firm, and to 50 for each group within the FOS’s group account arrangement; and the maintenance of reserves of a minimum of six months’ of operating income. The consultation ended on 13 August 2019.

FOS, 2 JULY 2019

CCTA | REGULATORY INFORM 6

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THE BOUNDARY BETWEEN WHICH FIRMS AND ACTIVITIES DO OR DON’T REQUIRE REGULATION, IS BEING CONSTANTLY TESTED. THE RECENT BEHAVIOUR OF SOME FIRMS OPERATING AROUND THE PERIMETER HAS CAUSED SERIOUS CONSUMER HARM AND REDUCED TRUST IN REGULATED FINANCIAL SERVICES MARKETS.

FCA LAUNCHES ITS CREDIT INFORMATION MARKET STUDY AND PUBLISHES ITS TERMS OF REFERENCEThe Financial Conduct Authority (FCA) has said: ‘Credit information plays a critical role in many markets. It can impact consumers’ access to a range of financial services (including mortgages, loans and credit cards) and in some cases the price they pay for them. This is significant as, according to the FCA Financial Lives Survey, nearly four in five adults hold at least one credit or loan product. Furthermore, those vulnerable customers for whom a lender’s decision is more finely balanced are most likely to be affected if the credit information market is not working well.

The market study will focus on the following themes:

• the purpose, quality and accessibility of credit information

• market structure, business models and competition

• consumers’ engagement and understanding of credit information and how it impacts their behaviour.

In exploring these themes, the market study will assess how the sector is working now and how it may develop in the future’.

The FCA’s particular highlights for the year include:

• improving protection for users of high-cost credit

• its work on stopping people becoming scam victims

• promoting innovation, including with the launch of the Global Financial Innovation Network

• preparations for EU Withdrawal

• extension of the Senior Managers & Certification Regime to insurers

• helping consumers take action on payment protection insurance

• improving outcomes for consumers in the asset management sector.

The report also outlines progress in sector-specific work undertaken by the FCA within its seven sector priorities (wholesale financial markets; investment management; pensions and retirement income; retail banking; retail lending; general insurance and protection; and retail investments).

The report reflects on the key pieces of work undertaken by the organisation, with particular highlights including: continuing actions to improve protection for users of high-cost credit; preparations for Brexit; a campaign to assist with PPI claims; action to stop people becoming victims of scams; and promoting innovation.

For retail banking the highlights included the FCA’s work on ring-fencing, PPI and delivering the revised Payment Services Directive, and for retail lending its measures in relation to Creditworthiness, Mortgage Market Study and Motor Finance.

FCA, 9 JULY 2019

NEXT STEPS

The FCA will begin to gather information from credit reference agencies, data contributors, providers of credit information services, users of credit information, and consumer organisations and will report on its preliminary conclusions in Spring 2020 including, if appropriate, a discussion of potential remedies.

Any views on the Terms of Reference should be sent to CreditInformationMarketStudy@fca.org.uk by the end of July 2019.

FCA 27 JUNE 2019

FCA ANNUAL REPORT AND ACCOUNTS 2018/2019The Financial Conduct Authority (FCA) has published its Annual Report and Accounts for the year ended 31 March 2019. In the Annual Report the FCA provides details of its progress against the priorities outlined in its business plan for 2018/2019. The FCA summarises its work over the year in addressing its cross sector priorities: firms’ culture and governance; financial crime (fraud and scams) and anti-money laundering; data security, resilience and outsourcing; innovation, big data, technology and competition; treatment of existing customers; long-term savings, pensions and intergenerational differences; and high-cost credit.

CCTA | REGULATORY INFORM 7

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CREDIT INFORMATION PLAYS A CRITICAL ROLE IN MANY MARKETS. IT CAN IMPACT CONSUMERS’ ACCESS TO A RANGE OF FINANCIAL SERVICES (INCLUDING MORTGAGES, LOANS AND CREDIT CARDS) AND IN SOME CASES THE PRICE THEY PAY FOR THEM.

FCA PUBLISHED 2018/19 COMPETITION REPORTThe Financial Conduct Authority (FCA) has published its annual competition performance report for 2018/19, setting out progress over the year to 31 March 2019 against its competition objective. The report is intended to complement the FCA’s wider annual report for the same period. The FCA published the finalised version of its FCA Mission: Approach to Competition in October 2018. The sections within the competition performance report are structured in the same way as the four-step decision-making framework the FCA uses in its approach, with specific examples of its work over the year:

• identifying harm – the FCA outlines its work on fairness in pricing practices, including the publication on fair pricing in October 2018

• diagnosing the cause of harm – the FCA summarises the diagnostic tools available to it, and sets out the key milestones over the year for a range of market studies and strategic reviews it conducted. The FCA expects to publish an interim report on its market study on general insurance pricing practices, with a final report at the end of 2019. The FCA also refers to its first formal CA98 enforcement decision in February 2019, which concluded that three asset managers had breached competition law

• remedying harm – the FCA provides three examples of where it intervened to support consumer choice and where it intervened with supply side remedies to protect vulnerable consumers

• measuring the FCA’s impact – the FCA explains how it evaluates the impact of its work, including through the ex-post evaluation framework launched in December 2018.

FCA, 9 JULY 2019

FCA ENFORCEMENT ANNUAL REPORT 2018/2019 PUBLISHEDThe Financial Conduct Authority (FCA) has published its enforcement annual performance report 2018/2019 (Enforcement Report), covering the period to 31 March 2019. The Enforcement Report is intended to complement the FCA’s wider Annual Report covering the same period. In 2018/19, the FCA issued 265 Final Notices (243 against firms and individuals trading as firms and 22 against individuals), secured 288 outcomes using its enforcement powers (276 regulatory/civil and 12 criminal) and imposed 16 financial penalties totalling £227.3million.

The Enforcement Report sets out chapters on enforcement activity for retail and wholesale conduct, on referrals for failure to meet the FCA’s Threshold Conditions and on the FCA’s work to secure confiscation orders. The FCA’s Unauthorised Business Department has seen large increase in reports about potential unauthorised activity, an increase the FCA attributes to the success of its Scam Smart campaign, and also to the proliferation of fraudulent online trading platforms (generally based outside of the UK but targeting UK consumers).

Further chapters cover the FCA’s contribution to the National Economic Crime Centre (which now incorporates the Joint Money Laundering Intelligence Taskforce) and to international fora. The Enforcement Report also provides details of the FCA’s policy work during the year, including the publication in April 2019 of the finalised version of its FCA Mission: Approach to Enforcement, and a final chapter outlines the results of feedback from firms and individuals under investigation.

FCA, 9 JULY 2019

CCTA | REGULATORY INFORM 8

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FCA ANTI-MONEY LAUNDERING ANNUAL REPORT 2018/2019 PUBLISHEDThe Financial Conduct Authority (FCA) has published its Anti-Money Laundering Annual Report 2018/2019 (AML Report). The AML Report is intended to complement the FCA’s wider annual report for the same period. In the AML Report the FCA summarises its contribution to international standard-setting through the Financial Action Task Force (FATF) and other bodies, such as the Anti-Money Laundering Expert Group of the Basel Committee and the Anti-Money Laundering Committee of the Joint European Supervisory Authorities.

The FCA also contributed to the FATF’s Mutual Evaluation Report for the UK, which was published in December 2018. The FCA goes on to explain its risk based approach to financial crime supervision, and how it deploys the tools at its disposal. In particular it provides details on its October 2018 thematic review of risks in the e-money sector and its June 2019 thematic review of money laundering risks in the capital markets sector.

On information gathering, the FCA explains that it is becoming more data driven, making use of different information sources. An example of this is the Annual Financial Crime Data Return, which was introduced in 2017 and for which the FCA published details from the first year of submissions in November 2018. Other work highlighted in the AML Report includes:

• the May 2018 international anti-money laundering and financial crime techsprint held by the FCA, and a planned follow-up techsprint, looking at how new technology can be used more effectively to combat money laundering and financial crime

• the creation in 2018 of the Office of Professional Body Anti-Money Laundering Supervision within the FCA and the first year of FCA supervisory assessment of Professional Body AML Supervisors.

FCA, 9 JULY 2019

SM&CR: FCA EXTENDS SOLO-REGULATED FIRMS OPT-UP DEADLINEThe Financial Conduct Authority has extended the opt-up deadline for solo-regulated firms to join the core or enhanced tiers of the Senior Managers & Certification Regime from 9 September 2019 to 9 December 2019. Firms currently in the core and limited scope tiers that wish to opt-up to a higher tier must submit a Form O by 24 November 2019.

FCA, 5 JULY 2019

FINANCIAL SERVICES AND MARKETS ACT 2000 (REGULATED ACTIVITIES) (AMENDMENT) ORDER 2019Amendments have been made to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 by SI 2019/1067, which inserts new article 36FA. The new article introduces an exclusion from the scope of article 36A, which specifies that credit broking is a regulated activity, for introductions by registered social landlords (RSLs) and housing associations of individuals seeking to enter into a credit arrangement to social and community lenders, where the introductions are made on a fee-free basis. RSLs are also enabled to make fee-free referrals to tenants or potential tenants to these social

and community lenders, without requiring Financial Conduct Authority authorisation. Entities covered by the exclusion are credit unions, community benefit societies, community interest companies limited by guarantee, registered charities, subsidiaries of registered charities, and subsidiaries of RSLs. The Order comes into effect on 23 July 2019. Alongside the amendment order an Explanatory Memorandum is available.

2 JULY 2019

FOS 2018/2019 REPORT AND ACCOUNTS - TIME HORIZONSThe Financial Ombudsman Service (FOS) has published its annual report for 2018 to 2019. In the report, the FOS sets out, amongst other things, its commitments for 2018/19 and how it sought to meet those commitments. It further discusses the complaints it dealt with in 2018/19 confirming that it received in total 388,392 complaints this year (up 14% on the year before). In the report, the FOS discusses its strategic horizons programme using three time horizons as a framework for thinking about and planning for the future. The most immediate planning period, Horizon One, comprises its work on improving existing processes and ways of working. This extends to the FOS’s two new jurisdictions for complaints about CMCs and from more small businesses, as well as its existing areas of work. Improvements to communication and accessibility will be supported further by the FOS’ new website and customer portal when this is available later in 2019. In its second time horizon, Horizon Two, the FOS is developing plans to play its part in bringing PPI misselling to its conclusion. Horizon Three looks further into the future, considering how the FOS will need to evolve in the next five to ten years.

FOS, 15 JULY 2019

CCTA | REGULATORY INFORM 9

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FCA ISSUES CALL FOR EXPERTS FOR CREDIT INFORMATION MARKET STUDY MS19/1The Financial Conduct Authority (FCA) has issued a call for experts to contribute to its Credit Information Market Study (MS19/1), which it launched on 27 June 2019. The FCA updated its MS19/1 webpage on 15 July to add a request for representatives to join its new group of experts, which will explore how the credit information market might evolve in the future, including considerations about the purpose, quality, and availability of credit information; the structure of the market, business models, and competition; and the engagement and understanding of consumers regarding credit information, and how this affects their behavior. The FCA is seeking representatives from diverse backgrounds, including consumer groups, academia, industry, policy making and technology. The FCA plan to consult these experts in a variety of ways, including through an online survey, short interviews and workshops, primarily in September/October of this year and will be seeking the personal views of these experts based on their experience (rather than the views of their current or previous employers). All input will be collected on a non-attributable basis.

Interested parties or those wishing to nominate someone, email: CreditInformationMarketStudy@fca.org.uk including name, email address and a brief explanation to outline your/their expertise and suitability.

FCA, 16 JULY 2019

FCA SEEKS FEEDBACK ON PLANS TO REPLACE GABRIELThe Financial Conduct Authority (FCA) has started work on a new data collection platform in order to improve the way it collects data from firms. It plans to replace Gabriel, its existing main regulatory data collection system, with the new platform. As part of the development of this new system, the FCA has produced a webpage together with a survey for stakeholders to complete with regard to their experiences of using Gabriel. The FCA will provide updates on progress and plans to publish the feedback to this survey later in 2019. The FCA will then speak with stakeholders to discuss the feedback themes and plans for its data collection systems.

FCA, 16 JULY 2017

FCA ANNUAL PUBLIC MEETING 2019: CHAIR AND CEO SPEECHES ON STRATEGY PUBLISHEDThe Financial Conduct Authority (FCA) has published speeches by CEO Andrew Bailey and Chairman Charles Randell on the role and strategy of the body at the annual public meeting. Mr Bailey discussed issues including Brexit, high cost credit, and the enforcement action of the FCA, while Mr Randell addressed the work of the FCA in past and coming years, noting that in the next phase of its activities it will be focusing on its use of technology and its regulatory framework.

FCA, 17 JULY 2019

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CCTA | REGULATORY INFORM 10

FCA UPDATES ‘BREXIT’ WEBPAGEThe Financial Conduct Authority (FCA) has added a new document to its ‘Preparing Your Firm for Brexit’ website titled, ‘Is Your Firm Prepared for Brexit?’. The document gives an overview of issues that the FCA expects regulated firms to have given thought to in their preparations for Brexit, including planning for a no-deal scenario on 31 October 2019.

FCA, 18 JULY 2019

FCA LAUNCHES CONSULTATION GC19/3 GUIDING FIRMS ON VULNERABLE CUSTOMERSThe Financial Conduct Authority (FCA) has launched a guidance consultation paper, GC19/3: Guidance for Firms on the Fair Treatment of Vulnerable Consumers, in which it sets out proposed guidance on what the FCA considers that the FCA Principles for Businesses require of firms to ensure that vulnerable consumers are consistently treated fairly across financial services sectors. The FCA considers that the FCA Principles that have the most relevance to firms in the context of vulnerable customers are Principles 2 (skill, care and diligence), 3 (management and control), 6 (customers’ interests), 7 (communications with clients) and 9 (customers: relationships of trust). The Guidance is relevant to all firms involved in the supply of products or services to retail customers even if they do not have a direct client relationship with those customers. Once finalised, the guidance will have the status of non-handbook guidance. Feedback is due by 4 October 2019.

FCA, 23 JULY 2019

OPTIMISING THE SM&CR: POLICY STATEMENT 19/20 AND FEEDBACK TO CP 19/4 PUBLISHEDThe Senior Managers and Certification Regime (SM&CR) is being extended to 47,000 solo regulated firms on 9 December 2019 with the aim of setting a new standard of personal conduct for everyone working in financial services. The Financial Conduct Authority (FCA) has published final rules on the extension of the Senior Managers and Certification Regime (SM&CR) to FCA solo-regulated firms, including claims management companies. In January 2019, in CP 19/4 the FCA consulted on changes to optimise the SM&CR.

This Policy Statement summarises the feedback the FCA received to Consultation Paper 19/4, its response to the feedback and sets out its final rules. These rules are relevant to all SM&CR firms, including CMCs. In general, the FCA has implemented the proposed changes to the SM&CR as consulted on, which include:

• confirming that the head of legal function is excluded from the requirement to be approved as a senior manager

• clarifying the requirements and scope of the Certification Regime

• extending Senior Manager Conduct Rule 4 (SC4) to non-approved executive directors at limited scope firms.

It also makes the FCA’s near-final rules on the extension of the SM&CR, to FCA solo-regulated firms and CMCs and the rules on a new directory, final. The requirements for solo-regulated firms depend on whether firms are classified as limited scope, core or enhanced. Banking firms and insurers can start submitting data on directory persons using the FCA’s online system Connect or the

multi-entry facility from around September 2019. All other firms can start submitting data as of 9 December 2019, following commencement of the SM&CR for solo-regulated firms. Solo-regulated firms should be preparing for SM&CR which comes into effect on 9 December 2019. They should read the policy statement to understand how the changes may affect them. For more information, firms can visit: https://www.fca.org.uk/SMCR.

FCA, 26 JULY 2019

FCA REPORTS ON HIGH-COST CREDIT ALTERNATIVESThe Financial Conduct Authority (FCA) has published a report titled ‘Alternatives to High-Cost Credit’, setting out actions and recommendations to improve the availability and awareness of alternatives to high-cost credit. The FCA recognises in the report that not all consumers have access to mainstream credit options, and that non-credit or lower-credit options may exist. The report provides an update on the key issues the FCA identified in CP18/35 and it:

• examines the market for alternatives to high-cost credit by looking at consumer demand and the availability of credit and non-credit alternatives

• sets out the actions FCA has taken so far

• explains the FCA’s and other organisations’ roles in supporting alternatives to high-cost credit.

The report sets out a list of actions that the FCA will take and its recommendations.

However the FCA notes that its remit is limited to address some of the challenges around alternatives to high-cost credit and that others can take the lead more effectively.

FCA, 23 JULY 2019

CCTA | REGULATORY INFORM 11

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FOS UPDATES WEBPAGES ON UNAFFORDABLE LENDING AND GUARANTOR LOANSThe Financial Ombudsman Service (FOS) has updated its webpages providing information for businesses on guarantor loans, unaffordable lending and complaints relating to home credit. FOS has also updated its consumer webpage to include information on financial difficulties. The information applies to businesses covered by the FOS’s compulsory and voluntary jurisdictions. The pages highlight the most common complaints that the FOS receives, and how it handles those complaints.

FOS, 2 AUGUST 2019

ICO CHANGES GUIDANCE ON SUBJECT ACCESS REQUEST TIME LIMITSThe UK regulator has made a change to its guidance on when to respond to subject access requests. Article 12 of the GDPR establishes a one-month timescale for controllers to comply with data subject rights requests, including the subject access right. Prior to the update, the ICO’s guidance said organisations should calculate the time limit from the day after they receive the request (whether the day after is a working day or not), until the corresponding calendar date in the next month. The updated guidance now states that organisations should calculate the time limit from the day they receive the request (whether it is a working day or not), until the corresponding calendar date in the next month.

PDP NEWS, 20 AUGUST 2019

TREASURY COMMITTEE REPORTS ON REGULATORY PERIMETERThe Treasury Committee has published a report on the regulatory perimeter of the Financial Conduct Authority (FCA), in which it expresses concern about the complexity of the perimeter and the grey area at its edge. The report, which follows on from the FCA’s Perimeter Report 2018/19, focuses on the FCA’s powers at the perimeter, non-regulated activities carried out by regulated firms, the ability of the FCA to warn on consumer products outside the perimeter, the role of HM Treasury, the present system for changing the perimeter, and the information gathering powers of the FCA.

FCA, 2 AUGUST 2019

FCA PUBLISHES SM&CR BANKING STOCKTAKE RESULTSThe Financial Conduct Authority (FCA) has published the results of its review into the embedding of the Senior Managers and Certification Regime (SM&CR) in the banking sector. The FCA aimed to understand, through the review, how SM&CR has been embedded into the banking sector over the three years since its introduction, though notes that this does not constitute a full post-implementation review, and that no policy changes will be made based on it. In the report, the FCA found that, in general, the industry has made a concerted effort to implement the regime, though notes the concerns of some non-executive directors that the regime expected too much of Boards.

FCA, 5 AUGUST 2019

FCA PODCAST ON SM&CR AND CULTUREThe Financial Conduct Authority (FCA) has released an ‘Inside FCA Podcast’ discussing the FCA’s work to improve culture in financial services, and the Senior Managers and Certification Regime (SM&CR).

FCA, 6 AUGUST 2019

FCA UPDATES SM&CR INFORMATION FOR SOLO REGULATED COMPANIESThe Financial Conduct Authority has updated its web page for solo-regulated firms that will become subject to the Senior Managers and Certification Regime (SM&CR) on 9 December 2019. The new information includes guidance on statements of responsibilities and responsibilities maps, and a video giving an overview of the SM&CR.

FCA, 2 AUGUST 2019

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CCTA | REGULATORY INFORM 12