19 Jul 2016

Compliance, Conduct and Risk Bulletin July 2016

Compliance, Conduct and Risk Bulletin July 2016

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FCA proposed amendments to their handbook in Quarterly Consultation

FCA propose to align the claims handling rules with the Insurance Act 2015

FCA to implement new requirement from the Non-Financial Reporting Directive (2014/95/EU) (EU NFR) for issuers to disclose their diversity policy in their corporate governance statement.

Alterations to be made to the definition of prescribed markets in the Handbook Glossary for the purposes of DTR 5 following the repeal of the Prescribed Markets and Qualifying Investment Order.

The FCA will dis-apply the CASS audit requirements to certain debt management firms.

FCA to make changes to the transparency reporting requirements for investment fund managers to reduce information gaps and allow effective monitoring of their risk-taking activities.  

Find out more: Financial Conduct Authority 

Financial Advice Working Group established

The Group was established in response to recommendations made by the Financial Advice Market Review (FAMR) report which was published in March of this year.

The Working Group will take forward three recommendations of the FAMR:

  • Work with employer groups to develop a guide to the top ten ways to support employees’ financial health and devise a strategy for rolling this out.
  • Publish a shortlist of potential new terms to describe “guidance” and “advice”
  • Lead a task force formed of interest stakeholders to design a set of rules with the aim of increasing consumer engagement.

The Group includes a selection of consumer industry experts from the FAMR Expert Advisory Panel, the Financial Services Consumer Panel and the FCA Practitioner Panel.

Find out more: Financial Conduct Authority Market Review

Minor FCA Handbook changes proposed in relation to a payment shortfall

The FCA is consulting on proposed changes to their requirements for firms when dealing with customers experiencing a payment shortfall.

The rules set out in MCOB chapter 12 are designed to ensure that firms do not impose unfair or excessive charges.

MCOB Rule 12.4.1BR states the way in which firms are expected to allocate payments received from customers who are experiencing a payment shortfall.

After reviewing a number of firms’ allocation of payment processes, the FCA have decided it would be helpful to amend MCOB 12.4.1BR and the Glossary definition of ‘payment shortfall’ to give a better understanding of their expectations and to assist in securing an appropriate level of customer protection.

The FCA propose that when a customer is suffering a payment shortfall, the firm must ensure that no part of any payment received from the customer is allocated towards paying un-capitalised interest or charges incurred because of a payment shortfall before the balance of the shortfall has been cleared.

Further, the FCA intend for the definition of a payment shortfall to not include outstanding amounts other than missed contractual monthly instalments of capital or interest (or both).

The definition will be amended to make it clear that interest (on missed payments), fees and charges, and ancillary items do not form part of a payment shortfall. 

Find out more: Financial Conduct Authority Minor Handbook changes

FCA Annual Report 2015/16 and Competition Report 2013-1

The FCA have published their annual report for 2015/16, providing an overview of the FCA’s work over the past year.

The report assess whether the regulatory body have met their objectives and delivered against the key priorities they set out in their Business Plan for 2015/16.

The report covers the integration of the some 25,000 firms into their regulatory regime following the FCA taking over regulation of consumer credit in April 2014.

Throughout the report the FCA underlines its proportionate regulatory approach based on assessment of risk. One of the priorities for the year 2015/16 was to address risks to the objective of enhancing market integrity. A number of risks were identified including; individual accountability, enhancing wholesale market integrity, international engagement, and, preventing financial crime.

Find out more: Financial Conduct Authority Annual Report


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