Up next from FCA: FCA's latest policy development update promises, by the end of the summer:
- a policy statement on fees;
- a consultation paper on fair, reasonable and non-discriminatory access to benchmarks;
- a policy statement on the client money rules for insurance intermediaries;
- consultation with PRA on the reform of the legacy credit unions sourcebook; and
- policy statements on improving complaints handling and changes to consumer credit rules.
It has not specified a date for publishing policy statements on individual accountability and approved persons. (Source: Policy Development Update 23)
FCA feeds back on retail distribution of CoCos: FCA has published its final rules on retail distribution of regulatory capital instruments – or contingent convertible securities (CoCos). FCA regards CoCos and common equity tier 1 share instruments issued by mutual societies as particularly susceptible to inappropriate distribution to retail investors. Its temporary product intervention rules restricting retail distribution of these instruments came into force on 1 October 2014 for a year. FCA has consulted on making the restrictions permanent and on new requirements when some regulatory share capital instruments issued by mutual societies are distributed to the retail markets. FCA has now made permanent rules that:
- apply when firms sell, promote or approve promotions relating to CoCos to retail clients (but do not apply to other intermediation activities); and
- limit exposure of any retail investor in mutual society shares to 10% of their net assets.
The new rules come into force:
- on 1 July in respect of firms that deal or arrange deals in mutual society shares for retail clients who are not high net worth or sophisticated investors, and require the firm to give the client a prescribed risk warning, and obtain a prescribed statement from clients to whom they provide non-advised, non-MiFID sales. The statement includes restrictions on investing more than 10% of a client's available assets; and
- on 1 October to amend the rules on non-mainstream pooled investments to ban the sale or promotion of CoCos to retail clients who are not high net worth or sophisticated investors or in certain other limited circumstances.
FCA to appeal on Macris: FCA is to appeal the Court of Appeal's ruling that FCA should have given Achilles Macris the right to make representations on certain matters set out in FCA's final notice to JP Morgan relating to the "London Whale" trades. FCA did not give Mr Macris third party rights because it did not consider that he was identified in the notice. The Court of Appeal decided that Mr Macris was identified. (Source: FCA to Appeal on Macris)
FCA seeks views on payment account terms: FCA has issued a call for input on the services that it proposes to include on the list of key services linked to payment accounts that are subject to a fee in the UK. It is required to compile such a list under the Payment Accounts Directive (PAD). FCA is also consulting on its suggested terms and definitions to describe these services. The consultation closes on 17 July. FCA will publish a feedback statement in September. (Source: FCA Call for Input: Terms and Definitions for Services Which are Linked to Payment Accounts and Subject to Fees)
FCA consults on barriers to innovation: FCA has issued a call for input on regulatory barriers to innovation in digital and mobile solutions. Following this, it will make a statement in the autumn outlining the action it will take to encourage greater innovation. The consultation closes on 7 September. (Source:FCA Call for Input: Regulatory Barriers to Innovation in Digital and Mobile Solutions)