Treasury Committee
Complaints - Treasury Committee letter raises concerns over the FCA’s handling of complaints and FCA responds - June 2020
The House of Commons Treasury Committee has published a letter, dated 30 April 2020, from Mel Stride MP (Chair of the Treasury Committee) to the FCA, regarding a recently published report by the Financial Regulators Complaints Commissioner raising concerns about the FCA’s handling of complaints. Among other things, Mr Stride MP comments that "whilst it is troubling that the Commissioner has stated that these requirements are not currently being met in some of the cases that reach him … the FCA is making genuine attempts to address these complaints-handling problems … The Treasury Committee will expect to see real progress from the FCA in this area and will be seeking regular updates including in our evidence sessions with the FCA".
The FCA confirms that it has, and will continue to, effect changes to address the issues identified, including changing the senior management in charge of its complaints function, significantly increasing resources for complaints handling and improving training and guidance material.
Letter from Mel Stride MP (Chair of the Treasury Committee) to the FCA regarding its handling of complaints
Financial Regulators Complaints Commissioner report raising concerns over the FCA’s handling of complaints
Press release
Financial Conduct Authority
COVID-19 - FCA publishes statement on its expectations regarding the APR for benchmark administrators and firms using Appointed Representative arrangements - 30 June 2020
The FCA has published a statement setting out its expectations to help benchmark administrators and firms using Appointed Representative (AR) arrangements apply the Approved Persons Regime (APR) during the COVID-19 pandemic. Among other things, the statement confirms that:
- the FCA intends to issue a modification by consent to the 12-week rule (which allows individuals to perform controlled functions without approval for a temporary period), to allow temporary arrangements for up to 36 weeks;
- in relation to furloughed approved persons, unless an individual is permanently leaving their post, they can retain their approval during their temporary absence and will not need to be re-approved by the FCA when they return; and
- the FCA does not expect firms to notify it under Form D of the temporary arrangements envisaged in the statement.
FCA statement on its expectations for firms and benchmark administrators using ARs apply the APR during COVID-19
COVID-19 - FCA extends assessment deadline for solo-regulated firms under the SMCR - 30 June 2020
The FCA has announced that it is extending the deadline for solo-regulated firms to undertake their first assessment of the fitness and propriety of their certified persons under the Senior Managers and Certification Regime (SMCR) from 9 December 2020 to 31 March 2021 in light of the disruption caused by COVID-19.
To ensure consistency, the FCA also intends to consult on extending the implementation of the following requirements from 9 December 2020 to 31 March 2021: (i) the application of the conduct rules for non-senior managers; (ii) the deadline for submission of information about directory persons to the register (although the FCA still intends to publish the details of certified employees of solo-regulated firms on the financial services register from 9 December 2020); and (iii) references in the FCA’s rules to the deadline for assessing certified persons as fit and proper.
If firms are able to certify staff earlier than March 2021, they should do so. Firms should not wait to remove staff who are not fit and proper from certified roles.
Press release: FCA extends implementation periods for solo-regulated firms under the SMCR in light of COVID-19
FCA Policy Statement PS20/7: FCA regulated fees and levies 2020/21 - July 2020
The FCA has published a Policy Statement (PS20/7) setting out its regulated fees and levies for 2020/21 for funding the FCA, the Financial Ombudsman Service (FOS), the Money and Pensions Services (MaPS), debt advice delivered by the devolved authorities and the illegal money lending levy that is raised to cover the expenses incurred by HM Treasury in tackling illegal money lending. The total 2020/21 annual funding requirement (AFR) remains as consulted on at £587.6 million, representing an increase of 5.2% over 2019/20.
Firms can use the online fees calculator to calculate their individual fees based on the final rates.
FCA Policy Statement PS20/7: FCA regulated fees and levies for 2020/21
Webpage
New Legislation
Corporate Insolvency and Governance Bill 2019-21 - receives Royal Assent - 25 June 2020
The Corporate Insolvency and Governance Bill 2019-21 has received Royal Assent. The Act will provide certain businesses with additional flexibility to comply with legal obligations in light of the COVID-19 pandemic. The vast majority of provisions under the Corporate Insolvency and Governance Act 2020 commenced on 26 June 2020, though most of the temporary business protection measures it enacts have retrospective effect from 1 March 2020. As noted in a previous edition of this Bulletin, there are a number of specific provisions in the Act for the financial services sector.
Corporate Insolvency and Governance Act 2020
Webpage
Association for Financial Markets in Europe
COVID-19 - AFME publishes paper addressing key considerations under the SMCR - June 2020
The Association for Financial Markets in Europe (AFME) has published a paper addressing some key considerations under the SMCR in light of the ongoing COVID-19 pandemic.
The paper focuses on how senior managers discharge their personal responsibilities on an ongoing basis and what will amount to ‘reasonable steps’ for these purposes. To this end, the paper suggests areas for firms and senior managers to consider as part of their response to COVID-19, including:
- ensuring that senior managers’ responsibilities remain clear;
- ensuring that if there have been any temporary or permanent changes to reporting lines, they are reflected in structure charts and, if appropriate, the management responsibilities map;
- considering whether the risks inherent in senior managers’ responsibilities have changed as a result of COVID-19 and ensure that appropriate controls are in place; and
- ensuring the appropriate documentation of senior managers’ involvement in decisions, particularly if it has occurred outside of formal meeting structures.
AFME paper on SMCR responsibilities in light of COVID-19
Financial Services Consumer Panel
Digital advertising in financial services - FSCP publishes Discussion Paper - June 2020
The Financial Services Consumer Panel (FSCP) has published a Discussion Paper on potential consumer harm caused by the digital advertising of financial services. While digital advertising and marketing techniques enable personalised, targeted marketing, the FSCP identifies certain concerns regarding their impact on vulnerable customers in the high-cost credit market, a lack of transparency and the role of unregulated brokers in pensions-to-cash markets. The FSCP asks the FCA to take a number of steps in response to these concerns, including through larger-scale consumer research.
FSCP Discussion Paper on digital advertising in financial services
