FCA demands action on ETVs and SIPPs: FCA has:

  • published the results of its thematic review into offers of enhanced transfer values (ETVs) when financial advisers try to persuade investors to transfer, usually, from employer defined benefit schemes into defined contribution schemes. It found some examples of good practice but also much bad practice. It noted several scenarios in which customers may not have been properly advised on the consequences of opting out of defined benefit schemes. It noted there is a particularly high risk of unsuitable transfers, given the Government's current pension reform agenda;
  • found significant common failings by operators of Self Invested Personal Pensions (SIPPs), many of whom it found failed properly to take into consideration all relevant factors in order to enable them to comply with applicable rules. It has written to the CEOs of all SIPP operators asking them to take action to ensure their firms comply with the rules. It has already taken enforcement action against some firms, and intends to make more visits to firms over the coming months; and
  • published a consultation paper on the standards the Government requires it to set to ensure those delivering the "Guidance Guarantee" in relation to the new choice of pension requirements meet appropriate regulatory standards. It asks for comment on its proposals by 22 September.

(Source: FCA Demands Action on ETVs and SIPPs)

FCA fines for market abuse: Following a tribunal decision that upheld FCA's decision that Ian Hannam had engaged in two instances of market abuse, FCA has announced it has fined Mr Hannam £450,000. Tracey McDermott described the case, which found Mr Hannam had disclosed inside information in emails otherwise than in the proper course of his employment, as long and complex. FCA's predecessor had originally given Mr Hannam a decision notice in February 2012, and the tribunal's assessment of whether the information, was inside information and, if it was, whether it was disclosed in the proper course of employment, ran to 130 pages. She welcomed the tribunal's decision and said: "It should leave market participants in no doubt that casual and uncontrolled distribution of inside information is not acceptable in today’s markets." (Source: FCA Fines for Market Abuse)

FCA updates on AIFMD: FCA has updated its website to advise that it received 984 applications for authorisation under the AIFMD by the end of 18 July, of which 609 firms will be authorised by 22 July. It reminded firms that they can no longer take advantage of the one-year transitional period, but also reminded firms that are not yet authorised that there are certain rules with which they cannot comply because they cannot market funds outside the UK until they are authorised. Meanwhile the Alternative Investment Management Association (AIMA) was critical of Member States that have not yet implemented the AIFMD or have not implemented it correctly. AIMA said this restricts fund managers from marketing and investors from investing. (Source: FCA Updates on AIFMD)

FCA consults on interim management standards publication: FCA is consulting on a proposal from Treasury to remove the requirement for issuers to publish interim management standards. Amendments to the Transparency Obligations Directive would lead to the removal of this requirement anyway, but Treasury wishes to implement this provision early. FCA therefore proposes to remove the requirement from autumn 2014, just over a year before the EU implementation deadline. Issuers can still publish the statements if they wish. FCA asks for comment by 4 September. (Source: FCA Consults on Interim Management Standards Publication)

FCA prosecutes unauthorised forex trader: FCA is prosecuting Phillip Boakes for a number of offences related to an unauthorised foreign exchange trading business, including unauthorised deposit taking under the Financial Services and Markets Act and various counts of theft, fraud and related offences. (Source: FCA Prosecutes Unauthorised Forex Trader)

FCA uses new suspension powers: FCA has used its powers of suspension for the first time, to impose a ban on two companies in The Financial Group in relation to recruitment. FCA found the group, which relies heavily on appointed representatives and individual advisers for its business model and profit, had failed over a period of nearly five years properly to supervise them. It said the failings stemmed from a culture that believed the representatives and advisers were the firm's customers and, as a result, it performed inadequate monitoring and control of their activities. FCA said the ban, on recruitment of new appointed representatives and advisers for four and a half months (six months less a 30% early settlement discount), was designed to punish the firm, given its reliance on these persons for its revenue. FCA's predecessor had already investigated the firm, and imposed a penalty on its former CEO. FCA would have imposed a fine of more than £13 million in total on the two firms were it not for their financial position. It has also required the firms to carry out various past business reviews. (Source: FCA Uses New Suspension Powers)

Payday lender applies for imposition of requirement: FCA has published a request for imposition of requirement from Ariste Holding Limited, trading as Cash Genie. The firm holds an interim permission for consumer credit business, including short-term credit and payday loans. FCA noted several concerns over aspects of its business and has required the firm to have a skilled persons review with a view to setting up a consumer redress scheme for any consumers who have suffered because of the firm's breach of regulatory requirements. (Source: Payday Lender Applies for Imposition of Requirement)

FCA publishes NED CRR modification guidance: FCA has reminded firms of the limitations stemming from the Capital Requirements Regulation (CRR) that took effect on 1 July on non-executive directors (NEDs) holding various combinations of directorships. It sets out the application process for modifications to the basic restriction. (Source: FCA Publishes NED CRR Modification Guidance)