The FCA has published its Regulation round-up for September 2015.  One of the key topics this month is the changes the FCA is making to its supervisory model, including how it classifies firms.  The new supervisory model will continue to look at the way individual firms and people behave, but will also increasingly, look at how markets work as a whole, with greater emphasis on sector and market-wide analysis.

The new model changes the way the FCA classifies firms with a move away from the C1-C4 conduct categories that have been used previously.  Now firms will be classified as either ‘fixed portfolio’ or ‘flexible portfolio’. Fixed portfolio firms will be subject to firm or group-specific supervision (Pillar I) while Flexible portfolio firms will be subject to event-driven reactive supervision (Pillar II) and thematic issue or product supervision (Pillar III) only.  It is noted in the introduction to the Regulation round-up that all firms who will be changing classification are being contacted directly this week. The FCA’s approach is summarised in the guide for fixed portfolio firms and the guide for flexible portfolio firms.   

Also of interest:

  • Connect has replaced all applications that were previously submitted via the Online Notifications and Applications system.  If your firm does not have access to Connect you will need to register before you can create or submit any notifications.
  • The Mortgage Credit Directive (MCD) applies new rules from 21 March 2016 to firms dealing with first and second charge mortgages (lenders, administrators and intermediaries).  Firms can choose to voluntarily apply the new rules from 21 September 2015.
  • All firms acting as lenders, administrators, intermediaries (including arrangers) or advisers in relation to consumer buy-to-let (CBTL) mortgage activity must be registered by the FCA from 21 March 2016.  Authorised firms are now able to register as a CBTL firm via a new form on the Connect system.