In November 2008, the FSA published Consultation Paper 08/19: Regulating retail banking conduct of business (CP08/19). In CP08/19, the FSA sought views on a proposed new framework for regulating retail banking conduct of business.
The FSA has now published Policy Statement 09/6: Regulating retail banking conduct of business - Feedback on CP08/19 and final rules (PS09/6).
In PS09/6 the FSA reports that in light of the responses to CP08/19 it has decided to implement the new framework it proposed. A new Banking and Payment Services (BPS) conduct regime, covering all retail banking services within the FSA’s remit, will take effect from 1 November 2009.
The final text of the FSA Handbook rules and guidance is set out in Appendix 1 of PS09/6. As a result of the responses to CP08/19 the FSA has made certain changes and these include:
- Clarified in chapter 1 of the Banking Conduct of Business sourcebook (BCOBS 1) how BCOBS interacts with the Payment Services Regulations 2009 (PSRs).
- Redrafted BCOBS 4 to require appropriate information and statements to be ‘provided or made available’.
- Inserted guidance at the start of BCOBS 4 to clarify when appropriate information should be ‘provided or made available’.
- Added guidance relating to disclosure of how interest is calculated, changes to charges, the availability of basic bank accounts and the cheque clearing process.
- Added a rule, similar to that in the PSRs, on charges for statements.
- Added guidance, under its post-sale service rule, on the processing of payment instructions and guidance that refers to the Statement of Principles produced by the British Bankers Association (BBA).
- Inserted a reference to the EU Switching Principles and the BBA/BSA/TISA cash ISA transfer guidelines.
The FSA has also identified certain areas where additional rules or guidance may be desirable but where further cost benefit analysis is required. The FSA plans to consult on the following in its Quarterly Consultation Paper in July 2009:
- Provisions relating to liability for losses for unauthorised transactions outside the scope of the PSRs.
- Provisions on the advance notification of changes to interest rates that are at a customer’s disadvantage.
- A rule to mirror rule 2.1.2 in the New Conduct of Business sourcebook (COBS) on exclusion of liability.
- Transitional provisions.
The FSA will also be conducting further work on whether it should introduce any new requirements in relation to the provision of advice on deposits, including structured deposits.
The FSA is also planning to develop information for consumers that clearly outlines their rights under BCOBS and the PSRs and what they can expect from their retail banking provider. The FSA plans to publish this information shortly before the new regime comes into effect.
The BBA and the Building Societies Association are currently developing industry guidance that would contain suggestions on how firms could meet the requirements under BCOBS. It is also expected to contain guidance on consumer credit, which will be monitored by the Banking Code Standards Board or a successor organisation.