FCA updates on MiFID 2: FCA has published the notes from a round table it held on UK implementation of the second Markets in Financial Instruments Directive (MiFID 2), where it met key trade associations. FCA plans to continue its monthly meetings with the associations and to consult in December on all the changes it will need to make to its Handbook, although it thinks the timetable is challenging. It will divide the consultation into conduct and wholesale issues. The nature of its approach will vary – sometimes it will include links to EU material, and sometimes it will copy out. FCA noted that for conduct issues a challenge is that it will wish to apply MiFID 2 provisions to non-MiFID business. It confirmed it was working with Treasury and, in response to a concern that the timescales did not leave much time for FCA to respond to issues raised in the consultation, it said it hoped it had already gathered views as a result of its earlier discussion paper. (Source: FCA Updates on MiFID 2)
FCA publishes debt management review: FCA has published the findings from its thematic review of the fee-charging and free-to-customer debt management sector, conducted between June 2014 and May 2015. FCA found:
- firms that failed to adequately assess customers’ financial circumstances before recommending a course of action;
- firms not making clear the type of service they provide and that free advice is available;
- firms encouraging vulnerable customers to buy products and services which were not suitable and impeded their ability to repay their debts;
- failures and inaccuracies in the information provided by advisers signing people up to debt management plans with their firm;
- firms failing to properly consider alternative options to debt management plans.
FCA reviewed the practices of eight firms, of varying sizes and business models. It has required some to review past cases and provide appropriate redress where customers have suffered harm. FCA noted that those firms who are now applying for authorisation will have to show that they meet the consumer credit rules, including treating customers fairly. FCA will also assess the level of fees charged by fee-charging debt management firms. (Source: FCA Releases Findings from Debt Management Thematic Review)
FCA to encourage smarter communications: FCA has published a discussion paper on "Smarter Consumer Communications". The paper challenges firms to consider introducing innovative ways to communicate and engage with consumers. This might include using videos or infographics. FCA’s previous thematic work and market studies have revealed that the type of information consumers receive, when they receive it and the way it is delivered can drive consumer outcomes, whether good or bad. Clear and engaging information also helps to promote competition and deliver products and services that consumers want. Examples of smarter communications include using:
- plain language, short format, bullet points and clear graphics;
- interactive apps to help consumers understand and manage their product;
- infographics to explain complex information and concepts to consumers in an engaging way; and
- videos to help consumers engage with the essential terms and conditions of a product.
FCA is seeking feedback on the discussion paper by 25 September. (Source: FCA Discussion Paper Calls on Firms to Deliver Smarter, Effective Communications)
FCA updates on consumer credit permissions: FCA has published guidance explaining the most common misconceptions firms have about consumer credit permissions. Many of these arise in activities relating to exempt agreements, or secondary consumer credit activities. FCA also updated on numbers of applications it had received and their status as of the end of March. It said most firms that had achieved authorisation at that time were limited permission credit brokers. It noted a large number of firms who had withdrawn their application, often to become appointed representatives of other firms. It had refused 18 applications. (Source: FCA Updates on Consumer Credit Permissions)
FCA gives high earner report guidance: FCA has published guidance for firms on completion of the forms for submitting high earner reports. (Source: FCA Gives High Earner Report Guidance)
Up next from FCA: During the third quarter of 2015, FCA plans:
- consultation on implementing UCITS V;
- consultation on fair, reasonable and non-discriminatory access to regulated benchmarks;
- a policy statement on the review of the client money rules for insurance intermediaries (this was due before the end of Q2);
- consultation on review of pensions rules and future plans;
- policy statements on complaints handling and redress, and changes relating to consumer credit (also due in June).
(Source: Policy Development Update 24)
FCA updates on pensions: FCA has updated on the impact of the new pensions flexibilities. It has also asked firms for information on barriers that consumers might face when trying to access their pensions savings. (Source: FCA Updates on Pensions)