Compliance Insights Articles

As we get stuck into 2020, let's take a look at what’s coming up from the FCA. Dear CEO Letter – Non-Financial Misconduct The Senior Managers and Certification Regime is now rolled out to most firms within the industry, and the FCA are keeping a close eye on how firms embed the Regime. Within the first week of January, the FCA published a ‘Dear CEO’ letter aimed at wholesale general insurance firms – which have been under the Regime for just over a year - warning of the poten

The past two years have brought a whirlwind of new regulatory requirements, guidance and legislation that financial services firms have had to keep up with. But this doesn’t make the existing regs any less important – in fact, some of the new requirements make familiarity with existing ones all the more vital. A great example is the importance of SYSC to Senior Managers, whom the Senior Managers and Certification Regime makes individually accountable for the areas in their re

High on the FCA’s cross-sector priorities for 2019/20 is ‘operational resilience’. The Regulator has recently turned its attention to technological changes and advances, particularly where these might impact on consumers or on regulator supervision, so it’s no surprise that high on the agenda is potential disruption caused by failure – or something more nefarious – of IT systems and other technologies. Acknowledging that apart from the increasing use of new technologies in fi

With just over two weeks to go until commencement, solo-regulated firms should be finalising their preparations for the start of the Senior Managers and Certification Regime. Firms can use the FCA’s checklist to make sure they’re on the right track, but we’ve had a number of queries from firms who are struggling with some of the finer points of the Regime, so this week we’ll take a look at final stage troubleshooting. Statement of Responsibilities One of the most common topic

Aiming to strengthen accountability and responsibility in financial services, the Senior Managers and Certification Regime will complete its roll out across the industry when solo-regulated firms come under the Regime on 9 December 2019. With deadline day less than a month away, this week we’ll take a look at how firms can make the most of the run-up to implementation day. Solo-regulated firms can take heart from banking firms, which have been subject to the regime since Marc

As solo-regulated firms are preparing to leave behind the Approved Persons Regime and implement the Senior Managers and Certification Regime, November is the ideal time for Senior Managers to revise the changes that will affect them from 9th December. Senior Management Functions will replace Controlled Functions, and there are likely to be fewer SMFs in the organisation than there were CFs. There are a range of additional and enhanced responsibilities and expectations, includ

With the FCA’s Vulnerability Consultation, in addition to recent media focus on mental health, it’s clear that firms are taking this as an opportunity to review their vulnerability processes. In fact, the drive is not limited to financial services, OFCOM is also taking steps in relation to vulnerability. This presents an opportunity for firms to re-think the way they see vulnerability, from a rather linear approach to a focus on the impact that firms can have. By linear appro

As part of the FCA Business Plan 18/19 the FCA are currently reviewing arrangements that firms have in place when outsourcing. They recently launched a discussion paper on the subject and aim to release proposals in late 2019. The catalyst for the cross-sector review of outsourcing is the fact that 17% of breaches reported to the FCA were due to a supplier of a regulated firm, rather than the firm itself. This represents the second highest root cause category of breaches! It’

This winter sees the introduction of the conduct rules for solo-regulated firms, insurance firms and banking are already complying with SM&CR and thus the conduct rules. Whilst the rules themselves are quite high level (this article is not covering the rules themselves, if you would like a reminder of the conduct rules please read our blog "SM&CR Conduct Rules Training Requirements") there are a few specific steps firms must take to comply with the new COCON requirements. The

The FCA’S 2019/20 business plan sets out upcoming regulatory changes over the next 10 months, as well as giving an indication of what is likely to be upcoming in 2020/21. In this article, we’ll take a look at the major upcoming changes as well as highlighting areas that the Regulator is assessing and monitoring for potential future changes. Cross sector priorities Brexit The FCA’s focus in late 2019 will remain the supporting of a smooth transition post-Brexit, with the main

Clearly, vulnerability is becoming a central issue in society, as can be seen by the increase in the usage of the word over time. The days of keeping illnesses to yourself are eroding as society changes to a more open, accepting and non-judgemental outlook. As vulnerability and mental health are discussed more, customers seem more willing to ask for help when it is needed. Only last week a client of ours received a call from a customer who was suicidal. Gladly the agent follo

The Financial Conduct Authority have recently published a stocktake report of the Senior Managers & Certification Regime in the banking sector. The Regime was introduced for banks over three years ago, so the review provides a useful exercise for firms about to join the Regime in December, affording a concise overview of some misunderstandings and potential improvements. Solo-regulated firms will also be reassured to find many positives within the review, with those interview

Under the incoming Senior Managers and Certification Regime, Core and Enhanced firms will have to allocate Prescribed Responsibilities to appropriate Senior Managers. The Prescribed Responsibilities are specific areas or high-level duties that the assigned Senior Manager must have oversight and ultimate responsibility for, such as the firm’s policies and procedures for countering the risk of the firm being used for financial crime. It is up to each firm to allocate these resp

The FCA published its Policy Statement on Buy Now Pay Later (BNPL) offers on 12 June 2019. This publication summarises the feedback to the Consultation (CP 18/43) alongside the final rules. Buy Now Pay Later offers are credit offers with a promotional period – usually up to 12 months – during which no repayments are required to be made. Where the customer repays the amount in full within the promotional period, then it is usually the case that no interest is charged. However,

At a high level PSD2 aims to: contribute to a more integrated and efficient European payments market improve the level playing field for payment service providers promote the development and use of innovative online and mobile payments make payments safer and more secure protect consumers encourage lower prices for payments PSD2 includes, amongst other things, services relating to the operation of payment accounts (for example, cash deposits and withdrawals from current accou

For solo-regulated firms the commencement of SM&CR is fast approaching, and 9th December will be here before we know it. Most firms will have their preparations in full swing by now, whether that is ensuring their senior managers that are in controlled functions will map across to the desired senior manager function, setting up recruitment procedures for senior managers and certification staff or creating a fit and proper assessment to be used at recruitment and annually ther

Following the Competition and Markets Authority’s response to the super-complaint submitted by Citizens Advice, the Financial Conduct Authority have published an update which sets out the regulator’s current position on some of the issues highlighted in the response. The super-complaint related to five markets, of which the FCA regulate three; mortgages, cash savings and general insurance. The CMA, however, acknowledges that harm from loyalty penalties is not just confined to

Having already taken action in the payday market, followed by the rent to own and motor finance sectors the FCA’s next target is bank overdraft charges. The FCA can’t be accused of failing to follow their published approach to regulation where they promise to categorise firms as either fixed or flexible portfolio firms. Firms with greater potential for harm fall within the FCA's fixed portfolio while other firms fall within the flexible. As part of managing their portfolios t

To celebrate the launch of our CONC Guide, an easy to understand overview of CONC, I thought it would be useful to produce an overview of the key provisions in CONC which impact most consumer credit firms. I’ll start by giving a little bit of an overview of CONC, or the Consumer Credit Sourcebook to give it it’s full title. It’s a part of the FCA Handbook which was introduced when the regulation of consumer credit was transferred from the Office of Fair Trading to the FCA in

Last month, the Financial Conduct Authority published its 2019/20 business plan, setting out the regulator’s priorities for meeting its objectives: to protect consumers, ensure market integrity and promote effective competition. There is, unsurprisingly, a continued focus on culture and accountability, with one of the main cross-sector priorities being firms’ culture and governance, highlighting the important role good culture can play in reducing potential harm to consumers.