FCA confirms final IGC rules: FCA has confirmed the final rules requiring firms to set up and maintain independent governance committees (IGCs). IGCs will represent the interests of scheme members in assessing the value for money of pension schemes. They will be able to challenge providers to make changes if necessary. From 6 April firms that operate personal workplace pension schemes will have to set up an IGC. It must contain at least five members and will have a duty to act independently of the firm. (Source: FCA Confirms Final Rules for Independent Governance Committees)

FCA to gather evidence on PPI complaints process: FCA plans to gather evidence on current trends in complaints on Payment Protection Insurance (PPI). FCA will use the evidence to assess whether the current approach is meeting its objectives of securing adequate protection for consumers and enhancing the integrity of the UK financial system. It will then consider whether further intervention will be necessary. FCA expects work to commence shortly and plans to give its view on the evidence in the summer. (Source: FCA to Gather Evidence on PPI Complaints Process)

FCA issues January 2015 Data Bulletin: FCA has published its second Data Bulletin for January 2015. This issue highlights elements of the authorisation process and includes items on:

  • authorisations under the spotlight;
  • approved persons;
  • financial promotions; and
  • policy initiatives with data implications.

The bulletin also contains details of upcoming FCA events. (Source: FCA Data Bulletin Issue 2, January 2015)

FCA updates on IRHPs: FCA has published an update on the banks that are reviewing their sales of interest rate hedging products (IRHPs). It notes the nine banks involved have sent a redress determination letter to the 17,000 businesses that are in the review, 14,000 of which offered cash redress, and have paid £1.8 million in redress to date. FCA reminds customers who bought caps that they would need to complain before the end of March in order to be included in the review. 1,000 out of a potential 7,000 have complained. FCA expects all work to be complete by the summer. (Source: FCA Updates on IRHPs)

FCA publishes supervisory notice on client money requirement: FCA has published a first supervisory notice addressed to LQD Markets (UK) Limited, placing a requirement on the firm to not deal with or release client money except as expressly permitted by the notice. The notice clarifies the requirement is a primary pooling event under the Client Assets Sourcebook (CASS). FCA has issued the notice because it has identified numerous CASS breaches at the firm. The firm identified a shortfall of $1million on 23 January, following an FCA request, and since then further shortfalls of $800,000 and $500,000 have been identified. The firm cannot meet its liabilities to repay and FCA is concerned that customers who ask for their money back first will be paid in full, leaving nothing for the others. (Source:FCA Publishes Supervisory Notice on Client Money Requirement)

FCA updates consumer credit FAQs: FCA has updated its website with questions about the consumer credit regulatory regime. (Source: FCA Updates Consumer Credit FAQs)

FCA updates on AIFMD reporting: FCA has updated its website on reporting under the AIFMD. It says it will not take enforcement action against firms who did not meet their reporting obligations because of FCA's failure to provide the relevant product reference number, provided the firm reports at the latest within a month of receiving the number. It will also give a grace period to firms who are unable to report because the GABRIEL system is not working properly. (Source: FCA Updates on AIFMD Reporting)

FCA achieves prison sentence for illegal CIS operators: Following an FCA prosecution, Alex Hope and Raj Von Badlo have been sentenced to seven and two years' imprisonment, respectively, for their role in defrauding others and operating and promoting a collective investment scheme (CIS) without authorisation. (Source: FCA Achieves Prison Sentence for Illegal CIS Operators)

FCA publishes crowdfunding review: FCA has published a review of the regulatory regime for crowdfunding and promoting non-readily realisable securities by other media. It focuses on how the rules it made in March are working in practice. Business loan-based crowdfunding overtook loan-based crowdfunding for consumers for the first time in 2014. Investment-based crowdfunding in 2014 is likely to be three times the amount raised in 2013, with equity-based crowdfunding increasing by over 200%. 50 loan-based crowdfunding platforms applied for interim permission, and FCA has fully authorised one to date and is reviewing a further eight applications. FCA estimates 56 active firms in this market at the end of 2014. There has also been an increase in firms carrying out investment-based crowdfunding. 14 are fully authorised, with 10 applications underway, and FCA has identified 11 appointed representatives that conduct regulated activities in relation to investment-based crowdfunding. FCA has engaged with the markets, looking at governance, management information and controls, and the websites of the firms. It has intervened in several financial promotions of investment-based crowdfunding firms, but has found good levels of compliance in loan-based crowdfunding firms, especially on anti money-laundering and know your customer checks. FCA's website review showed some websites lacked balance between prominence of benefits and risks, and cherry-picked information or downplayed important information. FCA looked particularly at "mini-bonds", which are becoming increasingly popular. It found a number of misleading promotions for these products. It also looked at use of social media and plans to publish guidance on how the financial promotion rules interplay with use of these media. Finally, FCA gives guidance to co-operative and community benefit societies in how they should promote their withdrawable shares on crowdfunding platforms. (Source: FCA Publishes Crowdfunding Review)