FCA is consulting on proposed rules and guidance for the secondary annuity market due to start in April 2017. The proposed rules cover the new regulated activities, namely buying annuity incomes, buying back annuity incomes (by the relevant annuity providers) and acting as a market intermediary. FCA’s proposals seek to help provide appropriate consumer protection while promoting effective competition in the interests of the consumer. They address disclosure, presentation of offers, restrictions on charging, compensation and prudential arrangements, and other regulatory requirements. The consultation closes on 21 June. Treasury has launched a consultation on draft secondary legislation to amend the Regulated Activities Order 2001 (RAO), the By Way of Business Order and other secondary legislation under the Financial Services and Markets Act 2000 (FSMA). As well as formally creating the new specified activities this legislation proposes to:
- allow appointed representatives, acting under the responsibility of an authorised principal, to be exempt from the requirement to be authorised to act as intermediaries in the secondary market and for the buying back of annuities;
- ensure that unauthorised persons are prevented from engaging in financial promotions in relation to investment activity on the secondary annuities market; and
- make clear that those buying rights to annuity income streams in this market will always be deemed to be doing so by way of business, and will therefore always be subject to the requirement to be authorised or exempt under FSMA and the RAO.
Treasury’s consultation closes on 2 June. (Source: FCA consults on secondary annuity market guidance and Treasury consults on secondary annuity market legislation)