REGULATORY

Consultation to improve access to financial advice

HM Treasury and the Financial Conduct Authority (FCA) have launched a joint consultation exploring what can be done to improve customers’ access to financial advice. As well as looking at savings and investments, the review will gather examples of problems in the mortgages and consumer credit markets. This work will cover similar ground to the FCA’s planned Emerging Distribution Models (non-advised sales) market study which has therefore been placed on hold to await the outcome of this latest review.

HM Treasury & FCA, 12 October 2015  FCA announces Call for Inputs on competition in the mortgage sector

The Financial Conduct Authority (FCA) has launched a Call for Inputs on competition in the mortgage sector. This provides an opportunity for interested parties to help the FCA identify potential areas where competition may not be working well and could be improved. A market study may begin next year. The Council of Mortgage Lenders welcomed the move. FCA, 7 October 2015

New rules on whistleblowing announced by PRA and FCA

The Prudential Regulation Authority (PRA) has issued a policy statement (PS24/15) on whistleblowing in deposit-takers, PRA-designated investment firms and insurers. The Financial Conduct Authority (FCA) has also published a policy statement on whistleblowing reporting on a package of rules designed to build-on and formalise examples of good practice already found in the financial services industry. These rules also act as non-binding guidance for other firms.

PRA and FCA, 6 October 2015

UK

Consumer finance growing steadily

The Finance & Leasing Association has found a 6% growth in consumer finance new business in August, compared with the same month last year. Financing & Leasing Association, 9 October 2015

New car finance volumes grow 8% in August

The Finance & Leasing Association has found that point-of-sale consumer new car finance was up 8% by volume and 11% by value in August, compared with the same month last year.

Financing & Leasing Association, 9 October 2015

32% of UK business invested by asset finance industry

The Finance & Leasing Association has found that asset finance new business grew by 5% in August compared with the same month last year – the twenty-third consecutive month of growth. Financing & Leasing Association, 9 October 2015  

Bank of England Bank Rate maintained at 0.5%

The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-1 to maintain Bank Rate at 0.5%. It also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion. Bank of England, 8 October 2015

EU

EBA consults on its benchmark rate under the MCD

The European Banking Authority (EBA) is consulting (EBA/CP/2015/16) on a formula for its proposed benchmark rate under the Mortgage Credit Directive (MCD). The MCD will require lenders to provide two illustrative samples of the pre-contractual European Standardised Information Sheet (ESIS) for variable rate mortgages. In respect of instructions on how to complete the ESIS, creditors are told to calculate the illustrations using the highest level of a cap on the borrowing rate, or where there is no cap, the highest borrowing rate in at least the last 20 years or the longest period for which data is available, or “based on the highest value of any external reference rate used in calculating the borrowing rate where applicable or the highest value of a benchmark rate specified by a competent authority or EBA where the creditor does not use an external reference rate." In the UK, this is reflected in MCOB 5A Annex 2. This work therefore arises from the fact that the EBA may be called upon by lenders to provide an EBA benchmark rate. The consultation closes on 20 November 2015 and the EBA expects to publish its benchmark rate in the first part of 2016 in readiness for MCD implementation.

EBA, 12 October 2015