.A little more than 100 days old, the U.K.'s Financial Conduct Authority ("FCA") is already beginning to flex its muscle. It has been actively consulting on possible new rules and has announced several high-profile enforcement actions. The country's Serious Fraud Office has also made its presence known, joining the U.K.'s Director of Public Prosecutions in publishing a draft Code of Practice concerning the use of deferred prosecution agreements. SFO Press Release (comments on the draft are being accepted through September 20, 2013).

Last week the FCA explained its regulatory approach. "The FCA's approach to advancing its objectives" describes how it intends to meet its three operational objectives: protecting consumers; protecting and enhancing the integrity of the U.K. financial system; and promoting effective competition in the interests of consumers in the markets.

Of particular interest to the FCA has been the investment management and investment advisory industry. On July 25th, the Authority published a review of how advisory firms have implemented some of the core aspects of the Retail Distribution Review ("RDR") which was effective in January of this year. The RDR made significant changes to the investment advice market, clarifying how consumers pay for financial advice and establishing minimum professional standards for all investment advisers. The review of the RDR notes shortcomings in company implementation in several areas including how firms explained the services they provide and the fees they charge. See also FCA Press Release.

Earlier in July, the FCA opened a consultation on the application of the RDR rules. The proposal discusses payments to advisers for referrals to discretionary investment managers ("DIMs"), which are prohibited for new business under the RDR rules. The proposal clarifies what happens when an adviser recommends that a client place additional money with the same DIM from whom they receive payments following a pre-RDR referral. The consultation also bans referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them. Comments on the draft are being accepted through October 4, 2013.

This month the FCA also published a consultation paper on the client asset regime for investment business. Among other things, the consultation includes proposals increasing the speed of distribution of client money if a firm fails; applying "hindsight" to value certain margined transactions carried out for clients; and amending the secondary pooling event rules to capture the possibility of the failure of central counterparties. Comments to the consultation paper's provisions regarding the European Market Infrastructure Regulation are being accepted through August 12, 2013. All other comments are being accepted through October 11, 2013.

Also, late last month the FCA provided guidance on how private parties, such as consumer bodies and regulated persons, should bring information to the attention of the FCA.