FCA gives debt management application guidance: FCA has added to its pages on consumer credit authorisations by setting out what it expects to see when examining a debt management firm's business model. (Source: FCA Gives Debt Management Application Guidance)
FCA feeds back on Innovate: FCA has published feedback from the roundtables it has held with small innovators, non-regulated businesses and existing regulated firms to discuss Project Innovate. Key conclusions included:
- FCA should include in its project both disruptive and incremental innovation, and should at all times ensure innovation has a positive effect on consumers;
- FCA should consider innovation in business models, not just technological developments;
- Start-ups have a low awareness of FCA and find it time- and cost-consuming to understand the regulatory system, and would find it useful to have pre-application meetings with, and feedback from, FCA; and
- FCA's website is not user-friendly to start-ups looking to understand how to get authorised.
(Source: FCA Feeds Back on Innovate)
FCA holds MiFID 2 conference: FCA has held its conference on the revised Markets in Financial Instruments Directive and Regulation (MiFID 2 and MiFIR). Among the FCA speakers were:
- David Lawton, who spoke on trading consequences of the package. He discussed transparency in the wholesale markets and wholesale conduct, the regulatory regime for commodity markets, high-frequency trading, best execution, dealing commission (he mentioned that FCA is supportive of ESMA's approach to ban use of dealing commission for all research) and retail investor protection. He noted that, while we still await many decisions and key supporting measures, firms cannot wait for these before starting their implementation planning; and
- Maggie Craig, who spoke on investor protection. She said MiFID 2 shows a desire to improve certain protections but criticised the way in which it still encompasses the sectoral approach. She focused on the governance and other organisational requirements and then moved on to discuss changes in conduct of business protections, such as suitability and appropriateness, inducements, research and execution. She said firms would have to be aware of the reasons for the new rules if they were to implement them properly.
FCA fines Barclays for client asset failings: FCA has fined Barclays £37,745,000 for failing properly to protect client assets. It found that as a result of the failings clients risked costs, delays or at worst losing their assets had Barclays become insolvent. The failings occurred in the investment banking division of the bank and £16.5 billion of client assets were at risk. FCA found breaches of Principles 3 and 10 and of associated rules in the Client Assets Sourcebook (CASS). It found weaknesses in systems and controls and a focus on business lines and products traded, rather than proper consideration of which legal entity was conducting the relevant business. As a result of the failings, assets with third-party custodians were not properly safeguarded and, among other things, the bank did not make accurate Client Money and Assets Returns to FCA. FCA commented that the bank took three years to detect the problem, during which time FCA had repeatedly warned firms of the importance of client asset requirement compliance. Tracey McDermott commented that "all firms should be clear after Lehman that there is no excuse for failing to safeguard client assets". (Source: FCA Fines Barclays for Client Asset Failings)
FCA warns on TLPI fund: FCA has published warnings for investors and advisers on potential mis-selling claims for customers that invested in the EEA Life Settlements Fund. The fund is an unregulated collective investment scheme comprising traded life policy investments (TLPIs). Firms had been warned in 2012 that they should re-examine any sales of TLPIs. FCA told investors they have until 1 December to make any complaints or claims, as from then on it may be too late to make certain claims. (Source: FCA Warns on TLPI Fund)