FCA fines broker over telephone sales: FCA has fined Moorhouse Group Limited £159,300 for failing to have in place controls to ensure customers to whom it sold motor and liability-related insurance products on the telephone received the right information. The firm's client base included small and medium-sized businesses (SMEs) including some very small ones (micro-SMEs). FCA found customers did not receive information about limitations and exclusions of add-on products, so could not reach a balanced decision on whether the products were suitable. In addition to the fine, FCA has required the firm to contact customers who bought commercial vehicle add-on insurance during 2012 to inform them of the investigation and encourage them to raise with the firm any concerns about the way in which the firm sold the product to them. (Source: FCA Fines Broker over Telephone Sales)
FCA fines Deutsche Bank £227 million for IBOR failings and misleading it: FCA has levied its largest fine of LIBOR and EURIBOR (together IBOR) misconduct. It has fined Deutsche Bank £227 million, including a 30% early settlement discount. The fine is so large because FCA says the firm also misled it. On the same day, three US agencies levied fines of US$800 million, US$775 million and US$600 million. FCA found that between January 2005 and December 2010 trading desks at the bank manipulated its IBOR submissions across all major currencies, and that the misconduct involved at least 29 individuals in London, Frankfurt, Tokyo and New York. The bank had inadequate systems and controls that allowed the conduct to continue unchecked, and did not put any controls specific to IBOR in place even after it was put on notice that there was a risk of misconduct. Because of this, and other failings in audit and investigation, the bank took over two years to provide FCA with recordings it asked for. Moreover, the bank (i) told FCA it could not share with it a report commissioned by the German regulator when this was not true and (ii) attested to FCA that its systems and controls in relation to LIBOR were adequate when the person drafting the attestation knew this was not true. FCA's investigation was also hampered by the bank being unable to provide information that was timely, accurate or complete. (Source: FCA Fines Deutsche Bank £227 Million for IBOR Failings and Misleading It)
FCA makes new rules: FCA has held several board meetings since its last Handbook Notice. We have reported in previous editions of FReD on the rules made at many of them. At its latest meeting, on 23 April, it made:
- the Training and Competence Sourcebook (TC) (Qualifications Amendment No 12) Instrument 2015: this amended TC from 24 April to add some new qualifications and amend some existing ones;
- the Client Asset Sourcebook (CASS) (Amendment No 2) Instrument 2015: this amends CASS and the Consumer Credit Sourcebook (CONC) partly from 1 May and partly from 1 June. The amendments make minor changes and clarifications to CASS 6 and 7, and ensure that CASS applies to loan-based crowdfunding; and
- the Alternative Dispute Resolution Directive Instrument 2105: this amends the Dispute Resolution Sourcebook (DISP) from 9 July to implement the Alternative Dispute Resolution Directive.
Financial Ombudsman Service (FOS) also made a change to its voluntary jurisdiction rules in respect of advising on conversion or transfer of pension benefits, effective from 24 April. (Source: FCA Makes New Rules)
FCA looks at de-risking: A new page on FCA's website considers the trend for banks to de-risk by citing money laundering concerns as reasons not to do business with generic types of customer. FCA says that, generally, banks should consider their position on a case-by-case basis and that it would not normally expect them to refuse business on the basis solely of compliance with anti-money laundering (AML) legislation. It acknowledges that the decision to accept or maintain a business relationship is ultimately a commercial one for the bank but says it will now consider during its AML work whether firms’ de-risking strategies give rise to consumer protection and/or competition issues. (Source: FCA Looks at De-Risking)
FCA publishes second charge mortgage forms: FCA has published supplements to its application pack for credit firms who wish to add second charge mortgage business to their applications. (Source:Supplement for Second Charge Mortgage Broking and Supplement for Second Charge Mortgage Lending/Administration)
FCA updates on FC guidance: FCA has published a summary of the feedback it received on proposed changes to its Financial Crime (FC) guidance. FCA has taken into account comments, but disagreed with respondents who suggested it should make few changes before the EU's fourth Money Laundering Directive is implemented. The main changes relate to:
- how FCA expects firms to establish source of wealth and source of funds; and
- arrangements intermediaries should make in respect of oversight and management of third-party introducers and other intermediaries.
(Source: FCA Updates on FC Guidance)