Regulator updates

Treasury consults on bringing funeral plans into FCA's perimeter

HM Treasury is consulting on a proposal to bring funeral plans into the remit of the Financial Conduct Authority (FCA). The deadline for feedback is 25 August 2019.

The FCA posted a webcast to help solo-regulated firms prepare for the Senior Managers & Certification Regime (SMCR), which applies to them from 9 December 2019. The hour-long webinar took place on 3 June but became available on demand, subject to registration. The FCA also published a checklists webpage.

FCA and PRA issue statement on LIBOR to RFR transition

The FCA and PRA issued a joint statement on firms’ preparations for the transition from the London interbank offered rate (LIBOR) to risk-free rates (RFRs).

Prospectus Regulation rules appear in Official Journal

Two delegated regulations supplementing the EU Prospectus Regulation (PR3) appeared in the EU's Official Journal. The regulations will apply from 21 July 2019.

New UK regulations for Prospectus Regulation

The Financial Services and Markets Act 2000 (Prospectus) Regulations 2019 amend legislation to implement PR3 in the UK. They come into force on 21 July 2019.

FCA sets near-final rules to implement Prospectus Regulation

The FCA issued PS19/12, responding to feedback from consultation and setting near-final Handbook rules to ensure alignment with the PR3.

FCA sets final rules to implement revised Shareholder Rights Directive

The FCA issued PS19/13, responding to feedback from consultation and setting final rules to implement requirements of the revised Shareholder Rights Directive. It also issued CP19/21, proposing amendments to its Decision Procedure and Penalties Manual (DEPP) and Enforcement Guide (EG). That consultation closes on 26 July.

Bank of England and PRA annual reports

The Bank of England (BoE) and PRA each issued an annual report for 2018/19, including information on their activities throughout the year and financial statements, the latter all in the BoE document.

FCA launches quarterly consultation

The FCA issued Quarterly Consultation Paper No 24 (CP19/19), in which it consults on proposed changes to the Handbook, including in relation to statements of responsibilities under SMCR and waiver applications.

PRA consults on SMCR changes

The PRA issued consultation paper CP12/19, proposing to amend the prescribed responsibility for recovery plans and resolution packs under SMCR. The deadline for responses is 7 August 2019.

Banking package appears in Official Journal

Two regulations and two directives designed to reduce risks in the banking sector (the 'banking package') were published in the EU's Official Journal. They amend existing legislation on capital requirements and recovery and resolution for banks and were adopted by the Parliament and Council on 20 May.

FCA publishes first annual perimeter report

On 19 June, the FCA published its first annual perimeter report. The "perimeter" refers to what and whom the FCA regulates and affects the extent to which FCA can protect consumers from harm caused by the financial services and products they purchase.

The report discusses the complexity of the perimeter, changes to financial markets, challenges to the perimeter and FCA's response to those challenges.

FCA consults on adequate financial resources

The FCA issued a consultation paper, CP19/20, about how it assesses adequate financial resources and the meaning of the term for its threshold conditions (Handbook, COND) and principles for businesses (Handbook, PRIN).

FCA issues June regulation round-up

The FCA published its June 2019 regulation round-up, with a special focus on new rules for overdrafts and Buy Now Pay Later products.

Consumer finance

FCA issues new rules for P2P crowdfunding

The FCA issued PS19/14, setting new rules to prevent harm to investors on peer-to-peer platforms. These include a limit for new retail customers at 10% of investable assets and the application in certain circumstances of the Mortgage and Home Finance Conduct of Business (MCOB) sourcebook. The latter is in force; the remaining rules apply from 9 December 2019.

Advocate General opines on pre-contractual obligations under Consumer Credit Directive

Advocate General Kokott's opinion in Michel Schyns v Belfius Banque SA (C 58/18) on the relationship between different pre-contractual creditor obligations under the Consumer Credit Directive (2008/48/EC) was published. It was originally delivered in German in February.

FCA publishes analysis of retail intermediaries market

The FCA published its analysis of the retail intermediary sector in 2018, based on information drawn from mortgage, insurance and investment intermediaries' returns.

UK Finance issues advice on discontinuing or refusing banking services

UK Finance published a set of proposed principles for banks to follow when they cannot offer, or keep providing, banking facilities to customers. The principles, developed in consultation with the FCA, are intended to ensure customers are treated fairly.

FCA sets sweeping new overdraft rules

The FCA announced that, in PS19/16, it had set final rules to overhaul the overdraft market, with the aim of making overdrafts simpler, fairer, and easier to manage. It also issued CP19/18, setting out further proposals. The deadline for feedback is 7 August 2019.

FCA sets final rules on Buy Now Pay Later

The FCA set final rules on Buy Now Pay Later (BNPL) products in PS19/17, including to prevent firms charging backdated interest on money repaid during offer periods.

New 'breathing space' for individuals with debt problems

HM Treasury announced a new scheme to give individuals with problem debt 60 days' protection from enforcement action and further interest, provided they consult debt advisers.

FCA responds to Treasury Committee on consumer access to financial services

The FCA responded to the House of Commons Treasury Committee’s report on consumer access to financial services, which had made a number of recommendations relating to the regulator. Parliament published the response.

Payment services

FCA updates approach document on payment services and electronic money

The FCA issued an updated version (version 4) of its approach document on the Payment Services Regulations 2017 and Electronic Money Regulations 2011, adding guidance on refused payment fees.

Facebook launches new cryptocurrency

Facebook announced its intention to launch a cryptocurrency, Libra, aimed especially at payments for the unbanked. An independent association is to govern the Libra Blockchain, on which Libra rests, and the Libra Reserve, which would hold assets in various currencies to back it. The announcement drew wary responses from lawmakers and officials, particularly in the US.

EBA opinion on strong customer authentication under PSD2

The EBA issued an opinion on strong customer authentication (SCA) under the revised Payment Services Directive (PSD2), responding to concerns about what approaches are compliant and challenges posed by the 14 September 2019 deadline. The FCA issued a response to the opinion.

General insurance

FCA blog on general insurance complaints handling

A blog by FCA director of general insurance and conduct specialists Karina McTeague on how general insurance complaints handling can be improved was posted by the Personal Finance Society.

Financial crime

HMT and OFSI publish materials on sanctions

HM Treasury and the Office of Financial Sanctions Implementation (OFSI) issued guidance and FAQs on financial sanctions and penalties for breaches.

FCA reviews money-laundering risks in capital markets

The FCA published a thematic review (TR19/4) of money-laundering risks in capital markets, advising firms to consider their approaches to anti-money laundering in light of the report.

Treasury issues AML advice

HM Treasury issued an advisory notice on anti-money laundering controls overseas, following statements by the Financial Action Task Force on jurisdictions with deficient regimes.


Complaints Commissioner criticises FCA complaints handling in relation to fraud allegations

The Complaints Commissioner issued two reports criticising the FCA for its supervision of a firm accused of inappropriate investments and fraudulent activity. The FCA published its responses.

FCA investigates Woodford suspension and expresses concern over UCITS loopholes

The FCA chief executive, Andrew Bailey, confirmed in a letter to Nicky Morgan MP that the regulator had opened an investigation into the suspension of the £3.7bn Woodford Equity Income Fund after several investors tried to withdraw.

In oral evidence, Mr Bailey defended the FCA and expressed concerns about the possibility of regulatory arbitrage afforded by loopholes in the Undertakings for Collective Investments in Transferable Securities (UCITS) Directive.


ESMA chair gives speech on international co-operation

The chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, gave a speech in Dublin on cross-border regulation and supervision, equivalence and the impact of Brexit.

FCA speech on innovation

Nick Cook, the FCA director of innovation, gave a speech on the role of innovation in financial services and at the FCA itself.

BoE speech on governance and AI

The BoE executive director of UK deposit takers supervision, James Proudman, gave a speech on governance in banking and the rise of artificial intelligence (AI) in financial services.

Chancellor speech on UK financial services

In his 2019 Mansion House speech, Chancellor Philip Hammond discussed fintech, financial services and announced a review of the UK regulatory system in light of Brexit.