FCA removes unfair terms information: FCA has removed much of its website resource on unfair contract terms. It says it needs to review and update these in light of the forthcoming Consumer Rights Act and the CMA's guidance. It notes that, while it has withdrawn certain undertakings from the site, the firms to which they were addressed must still comply with them. (Source: FCA Removes Unfair Terms Information)
FCA speaks at AFME annual conference: Martin Wheatley has spoken at the Association for Financial Markets in Europe's (AFME) Annual European Market Liquidity Conference. His speech provided a look back over the last decade from a regulator's perspective. In his speech he addressed:
- FCA's wholesale approach;
- the Fair and Effective Markets Review;
- FX rigging issues;
- MiFID 2; and
- FCA's wholesale markets review.
He concluded by saying that he expects the next decade to be as full of change as the last one and that whilst the changes will pose challenges they also offer opportunities. He closed by stating that those looking back in 10 years' time will be able to properly assess how well the financial services industry as a whole has addressed the global financial crisis. (Source: From Intellectual Certainty to Debate)
FCA issues retirement risk warnings rules: FCA has published new rules designed to protect consumers who wish to access pensions savings from 6 April. The new rules require firms to give customers new, personalised, risk warnings, based on asking customers specific questions, before the customer can make a decision on their pension product. FCA has suggested that, among other factors, firms should take into account:
- the state of a consumer’s health;
- tax implications;
- the impact on means-tested benefits; and
- investment scams,
when designing the risk warnings. Firms will need to keep records to show that consumers have received relevant warnings and whether they have taken regulated advice or guidance from Pension Wise. FCA is introducing the new rules without consultation. However, it has confirmed that it will undertake a review of "at-retirement" rules in the summer of 2015. It will consult at that time on whether any changes need to be made to the new rules. (Source: FCA Publishes Rules on Retirement Risk Warnings)
FCA seeks comments on pension transaction costs: FCA and the Department for Work and Pensions (DWP) have jointly published a call for evidence on the disclosure of transaction cost information for workplace pension schemes. FCA and DWP are particularly seeking evidence regarding:
- what costs should be included in the transaction cost reporting;
- how such costs should be captured and reported;
- whether information about other factors that impact on investment return should also be provided;
- how Independent Governance Committees and trustees will receive costs information and whether additional disclosure requirements on other parties are necessary to enable this; and
- when, how and in what format members and/or other prescribed persons should receive transaction cost information.
Interested parties should send their comments by 4 May. (Source: FCA and DWP Publish Call for Evidence on Transaction Costs)
FCA publishes pension charges rules: FCA has published final rules requiring firms to implement a charge cap for default funds used for automatic enrolment. From 6 April, firms providing workplace pension schemes used by employers for automatic enrolment will have to cap the charges within default funds to 0.75% per year of funds under management. Firms will also be prevented from
- paying or receiving consultancy charges and paying commission for advice not expressly agreed by scheme members; and
- charging active and deferred members of schemes differently based on whether they are contributing to the scheme or not.
FCA consults on pension transfer rules: FCA has published a consultation paper on proposed changes to its pension transfer rules, designed to reflect the Government’s new flexible pensions regime. The Government’s new regime will bring advice on transfers from defined benefit (DB) schemes to occupational defined contribution (DC) schemes into FCA’s remit. Consumers will be required to take advice before transferring out of a DB scheme and it will be the responsibility of trustees to check advice has been taken. FCA is consulting on changes to its rules following a proposed amendment to the Regulated Activities Order that will make advising on the conversion or transfer of safeguarded pension benefits, which are benefits other than money purchase or cash balance benefits, into flexible benefits, a regulated activity. FCA will also now require those advising on pension transfers to have the pension transfer specialist qualification when giving advice on all transfers from DB to DC regardless of when the transferred benefits are being accessed. (Source: FCA Publishes Consultation on Pension Transfers)
FCA makes new rules: FCA has published its latest Handbook Notice, confirming the rule changes it adopted at its February board meeting, as well as confirming the rules it made in January on Independent Governance Committees. In addition to the rules on pension schemes discussed elsewhere, it made:
- changes to the Glossary and the Conduct of Business Sourcebook (COBS) to reflect new disclosures for authorised collective investment schemes from 1 March; and
- a decision to revoke the Building Societies Regulatory Guide from 2 April.
(Source: FCA Handbook Notice)`