FCA consults on competition powers: FCA has published a consultation paper on the new competition powers it will have from 15 April. From that date FCA will regulate competition concurrently with the Competition and Markets Authority. The paper seeks views on draft guidance on FCA's new powers under the Competition Act 1998 and on market studies and making market investigation references. It also consults on draft legislation introducing minor amendments to the FCA Handbook. The consultation will close on 13 March. (Source: FCA Competition Concurrency Guidance and Handbook Changes)

FCA finalises BRRD rules: FCA has published feedback on its consultation on implementation of the BRRDs and its final rules. FCA needs to implement the BRRD in respect of firms it prudentially regulates that are "Prudential Sourcebook for Investment Firms (IFPRU) 730K" firms (around 230 firms) and group entities in a group that contains a 730K investment firm or credit institution. Following responses, FCA says:

  • the BRRD is not clear on whether the definition of a "financial institution" may include an IFPRU 125K or 50K firm. For the time being, it has not included them in its rules but will explore whether this is the legislators' intention. It has also excluded from its rules incoming EEA and any third-country firms;
  • it cannot conduct a case-by-case assessment of each affected firm to assess precisely which obligations should apply. Its research shows that 83% of IPRU 730K firms will be able to use simplified obligations, and will continue with its proposal to use its assessment approach to determine which firms must use the "general" obligations;
  • it agrees that some areas it suggested be covered in a recovery plan are not essential for firms using simplified obligations; and
  • it will delay application of its rules on the contractual recognition of bail-in until 1 January 2016.

Otherwise, its proposals remain unchanged except for some minor amendments and clarifications. It has also confirmed it will not make any rules to specify particular early intervention triggers, nor will it require firms to keep detailed records of financial contracts as part of recovery plans. Finally, it says it will discuss respondents' views on the minimum requirement for own funds and eligible liabilities (MREL) with the Bank of England, which is the resolution authority and so will determine the MREL. FCA's rule changes amend the Glossary, IFPRU and the Supervision Manual. The IFPRU changes in relation to bail-in take effect from 1 January 2016 but the rest took effect from 19 January 2015. (Source: FCA Finalises BRRD Rules)

FCA advises on AIFMD reporting: FCA has added a new set of FAQ to its website to help firms use GABRIEL to meet their reporting obligations under AIFMD. (Source: FCA Advises on AIFMD Reporting)

FCA suggests cash savings changes: FCA has published its cash savings market report, which identified a number of issues. The most pressing of these were a lack of competition between providers and a reluctance by consumers to switch. FCA has set out a number of proposals to address these issues, including:

  • asking providers to be more transparent about how reductions in interest rates on variable rate savings accounts are applied;
  • requiring clearer information to be given to borrowers enabling them to easily compare different accounts and understand how to switch. FCA will expect providers to improve communication of rate changes and bonus rate expiry to customers;
  • making it easier for customers to view and compare accounts from different providers in one place; and
  • making the switching process easier and reducing the current 15-day switching time for cash ISAs.

FCA is consulting on these proposals until 18 February. (Source: Cash Savings Market Study)

PRA and FCA consult on financial services compensation: PRA and FCA have published a joint consultation paper on the FSCS - Management Expenses Levy Limit (MELL) 2015/16. It proposes a total of £74.4 million. The consultation will run for four weeks closing on 16 February 2015 and the resulting rules will take effect from 1 April 2015. (Source: FCA Consultation Page - Financial Services Compensation Scheme - Management Expenses Levy Limit)

FCA writes to consumer credit CEOs: FCA has written to the CEOs of consumer credit interim permission holders, reminding them of when their landing slot for making application for full authorisation ends. It stresses that, if an application is not lodged before the deadline, the firm will have to cease consumer credit activities. FCA also takes the opportunity to highlight the significant failings it has found in high-cost short-term credit firms. Specifically, it notes:

  • poor practices in credit broking, particularly in lead generators, where firms do not act in customers' interests;
  • ensuring customers can afford to repay loans;
  • treating fairly customers in financial difficulties; and
  • putting in place adequate policies and procedures for governance and compliance monitoring.

It also notes that firms contemplating buying portfolios should conduct thorough due diligence not least on compliance with the Consumer Credit Act and Unfair Terms in Consumer Contract Regulations. (Source: FCA Writes to Consumer Credit CEOs)

FCA updates on reporting: FCA has updated its website on reporting requirements for firms to include additional forms for credit broking and complaints returns. (Source: FCA Updates on Reporting)

FCA publishes copy trading guide: FCA has published a "one-minute guide" to copy, or mirror, trading in retail markets in contracts for differences. (Source: FCA Publishes Copy Trading Guide)