FCA publishes annual report: FCA's Annual Report for 2014-2015 highlights the key areas of FCA's work in the past year as:

  • its work on regulating consumer credit, which will bring the number of regulated firms to 73,000;
  • launching Project Innovate;
  • implementing the new Senior Managers Regime (SMR);
  • market studies, including cash savings, retirement income and review of competition in the wholesale sector; and
  • its response to the Davis review.

The report appends details of skilled persons reviews and enforcement activity during the year. It used its powers under s166 Financial Services and Markets Act 53 times in the year, with over half the reviews relating to conduct of business issues and nearly half the reviews relating to firms within the C4 conduct category. On enforcement, FCA closed 115 cases over the year, and had 226 open cases at year end. Open cases related predominantly to market abuse and integrity issues and to mis-selling, and also to wholesale conduct and unauthorised business. FCA also summarises feedback on its enforcement activities from firms it investigated during the year and details on the length of time it has taken to resolve issues using various tools. (Source: FCA Publishes Annual Report)

FCA advises on de-risking: FCA has committed its support to the Financial Action Task Force (FATF) on de-risking drivers. It says it expects banks to be particularly interested in FATF's comments on correspondent banking, and specifically that there is no routine requirement that banks carry out full customer due diligence on each relevant customer of a bank for which they provide correspondent banking services (Source: FCA Advises on De-Risking)

FCA updates on SMR: FCA has published its feedback and final rules on introducing the SMR, including the Certification Regime (CR) and Conduct Rules. It:

  • highlights the minor changes it has made since it published its near-final rules (specifically, on non-executive directors);
  • looks at practical issues firms will face in transitioning to the new regime. FCA hopes it has now made several aspects of its rules and expectations clearer;
  • provides specific guidance on areas such as where individuals share responsibility, and uses examples to help firms understand which rules will apply in certain scenarios; 
  • recognises the potential anomalies for investment advisers as some will be covered by the CR and others by the approved persons regime, and says it will consider in due course whether to make further changes to the approved persons regime to address this;
  • says it will also report further and separately on regulatory references;
  • in relation to the Conduct Rules, like PRA, below, has given thought to the burden on firms of reporting known or suspected breaches and has changed its rules so as to require firms to report only annually in respect of known or suspected breaches by any relevant person other than a senior manager;
  • explains the transitional and grandfathering rules, and what notifications and forms firms should use, and by which dates; and
  • in a separate part of the paper, consults on introducing the CR to UK and relevant incoming firms for wholesale market activity. Specifically, it has noted that, while many individuals involved in the wholesale markets would fall under the CR regime, more junior wholesale staff and individuals currently approved under Controlled Function 30 (CF30) but not subject to a qualification requirement would not necessarily be captured. FCA would make any individuals who could pose significant harm to the firm or its customers subject to the CR. The changes would expand the current CF30 and would also address the risks of algorithmic trading. FCA is also consulting on amendments to remove the territorial limitation for material risk takers in the CR and Conduct Rules.

The paper includes maps, references to forms and the final rules. Still outstanding from FCA are:

  • guidance on the presumption of responsibility;
  • other guidance on enforcement;
  • senior management responsibility for whistle-blowing;
  • regulatory references; and
  • maybe, guidance on reporting breaches of conduct rules.

It plans several papers over the next few months to address these issues. It asks for comment on its proposals on wholesale activities by 7 September. (Source: FCA Updates on SMR

FCA makes Pension Wise recommendations: FCA has published a policy statement of recommendations to those providers that deliver Pension Wise. The statement considers what action FCA might take if it feels any provider has fallen short of the standards it should meet. (Source: FCA Makes Pension Wise Recommendations)

FCA appoints new director: FCA has announced Jonathan Davidson's appointment as new director of supervision – retail and authorisations. (Source: FCA Appoints New Director)