Financial Conduct Authority
SME access to FOS - FCA publishes call for input - 17 March 2023
The FCA has published a call for input on the thresholds that allow certain small and medium-sized enterprises (SME) to refer complaints to the Financial Ombudsman Service (FOS). Since 1 April 2019, the FOS has been able to consider complaints made by micro-enterprises and certain small businesses. The FCA now wishes to understand whether the current thresholds continue to be appropriate to provide access to SMEs that it thinks are likely to have insufficient resources to resolve disputes with firms through the legal system.
The FCA’s review will also be informed by the latest evidence available from the Legal Services Board's small business survey and the SME Financial Monitor survey, together with data collected from the FOS and the Business Banking Resolution Service.
Responses to the call for input can be made until 28 April 2023. The FCA will then publish its response, which will include information on whether it proposes to carry out any further work.
FCA call for input
FCA survey
Simplified advice regime - FCA publishes speech - 21 March 2023
The FCA has published a speech by Therese Chambers, FCA Director of Consumer Investments, on the proposed simplified advice regime and the wider financial advice and guidance boundary review. Ms Chambers refers to the FCA Consultation Paper on broadening access to financial advice for mainstream investments (CP 22/24), published in November 2022. Feedback to this paper suggests that the premise of a core investment advice regime will work for many, but not all, business models. The FCA recognises the need to offer as much regulatory clarity for firms as possible and acknowledges the limitations of the ‘target market’ definition.
The second piece of work discussed by Ms Chambers is the joint review by the FCA and HM Treasury of the boundary between advice and guidance. Ms Chambers confirms that accumulation products, including general investment accounts, ISAs and pensions wrappers, will be within the scope of this review; defined benefit transfer advice, even below the £30,000 threshold for advice, will be out of scope. Details and timings of the review will be provided in due course.
Disclosure is cited as “one of the key and pertinent aspects” of the FCA’s regulatory approach. The FCA is currently evaluating responses to its Discussion Paper on the Future Disclosure Framework (DP22/6). There has been a positive response to a principles-based and flexible approach to communicating disclosures to consumers.
Finally, Ms Chambers notes that the FCA has seen good progress in implementing the Consumer Duty, which “represents a watershed moment in our approach to the regulation of retail financial services”. She notes that, under the current regime, firms may provide information to their customers to enable them to understand their options and the risks and consequences of any decision. For example, firms can explain consequences of decisions which may result in a significant tax liability or options available for taking an annuity, so that consumers could, for instance, consider whether they want a single life policy or a joint life policy which continues to pay out to the customer’s partner. The FCA already expects firms to be supporting customers in this way, but the Consumer Duty’s focus on good outcomes, including avoiding foreseeable harm, will enhance this position.
Press release
Climate Financial Risk Forum - Webpage updated with new materials - 22 March 2023
The FCA has updated its webpage on the Climate Financial Risk Forum (CFRF) with several new guidance documents. The CFRF was established in 2019 and shares best practice across financial regulators and industry to advance the financial sector’s response to the financial risks from climate change. The FCA’s webpage now signposts a fourth set of materials on disclosure, data and metrics and scenario analysis, including:
- an updated version of the CFRF climate disclosures dashboard, which incorporates recent regulatory developments and progress made by industry in preparing climate-related disclosures;
- webinars on disclosure, data and metrics considering the limitations of portfolio climate data, forward-looking portfolio climate metrics and climate data coverage, plus supporting content;
- an updated version of its online climate scenario analysis narrative tool;
- a guide on developing scenario analysis aimed at asset managers of all sizes but which may be of interest to other financial institutions, particularly those that use scenario analysis as a tool to assess future risks; and
- a paper setting out learnings from the 2021/22 climate biennial exploratory scenario written by the UK Centre for Greening Finance and Investment and the CFRF's Scenario Analysis Working Group.
Updated webpage
FCA appointments - Joint Executive Directors of Enforcement and Market Oversight - 23 March 2023
The FCA has published a statement announcing the appointment of Therese Chambers and of Steve Smart as joint Executive Directors of Enforcement and Market Oversight.
The FCA press release notes that the “expansion of the FCA’s enforcement and market oversight leadership team… reflects the vital role that enforcement work plays in delivering its 3 year strategy and its commitments to reducing the growth in financial crime, ensuring consumer outcomes meet the higher standards of the New Consumer Duty, stepping in where firms restrict competition and much more...”.
Press release
Authorisation timelines - FCA publishes service and performance metrics - 21 March 2023
The FCA has published an update on its operating service metrics for authorisations and its performance metrics. The data shows that the FCA did not meet its targets in January/February 2023 in a number of areas. It observes that it is seeing incomplete and poor-quality applications in the payment services and e-money authorisations, registrations and notifications sphere and refers to the guidance published on its website for prospective cryptoasset businesses and mortgage intermediaries.
FCA Authorisations Update
Performance metrics
Financial Ombudsman Service
Increased award limits - announced by the FOS - 20 March 2023
The Financial Ombudsman Service (FOS) has announced increases in its award limits for complaints referred to it with effect from 1 April 2023, as follows:
- £415,000 for complaints about acts or omissions by firms on or after 1 April 2019; and
- £19,000 for complaints about acts or omissions by firms before 1 April 2019.
Press release
Complaints data - published by the FOS - 22 March 2023
The Financial Ombudsman Service (FOS) has published its complaints data for the second half of 2022. 220 businesses feature in its data for this period compared to 212 in the previous six-month period. The average complaint uphold rate across all products was 34%, compared to 37% in the first half of 2022. The FOS saw an increase in the volume of complaints about motor finance, with the majority about charges, fees and commission.
Business complaints data: July - December 2022
Webpage
