Since our last publication, three consultation papers have been published by the FCA /PRA in relation to extending the Senior Managers and Certification Regime to all FCA firms. In other news, the FCA has published a feedback statement on the high-cost credit market, and a consultation paper on assessing creditworthiness in consumer credit.

UK

Extending the Senior Managers and Certification Regime

Three consultation papers have been published by the FCA / PRA in relation to extending the Senior Managers and Certification Regime to all FCA firms.

  • Individual accountability: extending the SM&CR to all FCA firms (FCA CP17/25)
  • Individual accountability: extending the SM&CR to insurers (FCA CP17/26)
  • Strengthening individual accountability in insurance: extension of SM&CR to insurers (PRA CP14/17)

FCA & PRA, July 2017

FCA feedback statement on high-cost credit market

The FCA has published a feedback statement on the high-cost credit market, together with a technical annex, a report which sets out the FCA's survey findings of consumers' experiences of high-cost short-term credit (HCSTC) products and a technical report which summarises the methodological approach used for the price cap research. The feedback statement follows a call for input published in November 2016 and covers a number of topics including: the HCSTC price cap; High-cost credit product findings; and future developments such as overdrafts, RTO, catalogue credit and home collected credit. The FCA has identified a number of issues that could cause consumer harm which it will investigate further with the aim of issuing a consultation paper on proposed solutions in Spring 2018.

FCA, 31 July 2017

FCA consults on assessing creditworthiness in consumer credit

The FCA has published a consultation paper on assessing creditworthiness in consumer credit, together with a summary of its research findings (which mainly involved a firm survey and earlier FCA qualitative research). The FCA is concerned about the risk of potential harm to consumers from poor culture and practice by consumer credit firms, which could lead to consumers being granted credit that they cannot afford to repay, causing financial distress. Therefore, the FCA is seeking to clarify:

  • the distinction between affordability and credit risk;
  • the factors that should be used when deciding the proportionality of assessments;
  • the role of income and expenditure information; and
  • its expectations around firms’ policies and procedures.

FCA, 31 July 2017

FCA update on work on motor finance

The FCA has published a press release providing an update on its work on the motor finance market. Many credit products are now available and consumers’ use of motor finance has grown rapidly in recent years. The FCA announced it would look at this market in its 2017-18 Business Plan in order to develop its understanding of these products and how they are sold in order to assess whether the products caused harm to consumers and whether the market is functioning as well as it could.

FCA, 31 July 2017

Banking Act 2009 (Service Providers to Payment Systems) Order

A draft copy of the Banking Act 2009 (Service Providers to Payment Systems) Order 2017 has been published on legislation.gov.uk. Legislation.gov.uk, 26 July 2017 FCA consultation on information about current account services

The FCA has published a consultation paper on information about current account services. The consultation is of interest to firms that accept deposits and provide payment accounts as defined by the Payment Account Regulations. It affects the majority of current and potential participants in the personal current account (PCA) and business current account (BCA) markets, as well as organisations that offer comparison services. The FCA wants to make it easier for customers to access and assess information about providers that best suit their needs, as it feels information available to customers that allows comparison between firms is rarely provided in a consistent manner. The FCA also wants to incentivise BCA and PCA providers to improve their service and performance. The consultation closes on 25 September 2017. FCA, 25 July 2017

Second FCA consultation paper on implementing IDD

The FCA has published its second consultation paper on implementing the Insurance Distribution Directive ((EU) 2016/97) (IDD) (CP17/23). The FCA intends to publish a third consultation paper, in late September 2017, on its remaining proposals for IDD implementation. The FCA notes that, given the 23 February 2018 deadline for implementing IDD and the timing of the adoption of the delegated acts, it is likely that its third consultation will be issued while CP17/23 remains open for comments. FCA, 24 July 2017

EU

ESRB 2016 annual report

The European Systemic Risk Board (ESRB) published its annual report for 2016.

The report describes the work that the ESRB has carried out during its sixth year of operation. It is split into three sections:

  • Section 1: Systemic risks in the financial system of the EU, which considers the four main risks to financial stability in the EU that the ESRB has identified.
  • Section 2: Policy measures addressing systemic risks, which reviews the ESRB's work in the area of macro-prudential policy.
  • Section 3: Ensuring implementation and accountability, which discusses the follow-up to ESRB recommendations, the ESRB's obligation to report to the European Parliament and the institutional framework.

ESRB, 28 July 2017

Final EBA guidelines on major incident reporting under PSD2

The EBA has published its final report which looks at the guidelines for major incident reporting, which have been developed in close co-operation with the European Central Bank, under the Directive on payment services in the internal market. The guidelines contribute to the PSD2 objective of minimising disruption to users, PSPs and payment systems. EBA, 27 July 2017

EBA consults on draft RTS and ITS on EBA electronic central register under PSD2

The EBA has published a consultation paper on the draft regulatory technical standards (RTS) and implementing technical standards (ITS) on the EBA electronic central register under the revised Payment Services Directive ((EU) 2015/2366) (PSD2) (EBA/CP/2017/12). The EBA is holding a public hearing on 4 September 2017 in relation to this. The consultation closes to responses on 18 September 2017. EBA, 24 July 2017