FCA makes CRD4 rules: FCA has published its rules implementing CRD4 for its regulated community.
The package comprises:
  • general guidance on proportionality in relation to the Remuneration Code for, respectively, IFPRU (Prudential Sourcebook for Investment Firms) and BIPRU (the Prudential Sourcebook for Banks, Building Societies and Investment Firms) firms;
  • the CRD 4 Instrument 2013, which makes IFPRU and amends the Glossary and the Senior Management Arrangements, Systems and Controls Sourcebook (SYSC);
  • the CRD 4 (GENPRU and BIPRU Amendments) Order 2013, which amends the General Prudential Sourcebook (GENPRU) and BIPRU;
  • the CRD 4 (Consequential Amendments) Instrument 2013 which makes amendments to many parts of the Handbook;
  • the CRD 4 (Governance and Remuneration) Instrument 2013,which amends the Glossary and SYSC;
  • the CRD 4 (Reporting) Instrument 2013 which amends the Glossary and the Supervision Manual (SUP); and
  • the CRD (AIFMD and UCITS Consequential Amendments) Instrument 2013 which amends the Prudential Sourcebook for UCITS firms (UPRU), the Interim Prudential Sourcebook for Investment Businesses (IPRU (INV)) and SUP.
FCA has also published a list of transitional provisions, and has set out prudential categorisations for
investment managers. In principle, the changes all take effect from 1 January 2014. (Source: FCA
FCA makes more rules: In addition to the CRD 4 implementation rules and the MMR data reporting rules

discussed elsewhere, FCA made, over two board meetings in mid-December:

  • the Handbook Administration (No 32) Instrument 2013. This makes minor changes to various modules of the Handbook at a number of dates;
  • the Conduct of Business Sourcebook (COBS) (Key Features Illustrations for Personal Pensions) (Amendment No 2) Instrument 2013: this takes effect on 6 April 2014 and amends COBS in respect of adjustments to projections for in-force personal and stakeholder pensions;
  • the Conduct of Business (Platforms) (Amendment No 2) Instrument 2013. This took effect on 13 December 2013 and has the effect of delaying the date on which changes to COBS in respect of reporting of information on fund information and voting rights take effect. These rules will take effect at the end of 2015, although the rules and guidance on requests from authorised fund managers for liquidity management purposes will take effect on 31 December as originally planned;
  • the SUP (Reporting and Audit Requirements) (Amendment) Instrument 2013. This takes effect on 31 December and amends SUP in respect of the removal of the Mortgage Lending and Administration Returnrestriction that requires firms to report in sterling;
  • the Compensation Sourcebook (Investments by Large Unincorporated Associated and Certain Large Partnerships) Instrument 2013. This took effect from 13 December and ensures FCA's rules properly implement the eligibility criteria from the Investors Compensation Directive; and
  • the Listing Rules (Annual Financial Report) Instrument 2013. This took effect from 13 December and removes certain overlaps between the Listing Rules and new reporting requirements.
FCA fines for appointed representative failings: FCA has fined Porta Verde Financial Services
Limited £25,000 for failings in its appointment, management and monitoring of two appointed
representatives (ARs). The firm was a regulatory consultancy, which provided compliance support and oversight to start-up businesses and was principal to 22 ARs. FCA found that:
  • one AR sold certain home emergency cover to customers; and
  • another AR sold insurance for satellite television equipment.
In both cases, customers complained to the then Financial Services Authority (FSA) about misleading
information they had been given on calls from the ARs. Although the firm made changes to the ARs'
sales scripts once the FSA told it of the problems, customers were still misled or missold policies. FSA
eventually asked the firm to consider remedial action for customers, which the firm eventually agreed
to. The AR agreements were terminated in June 2012 and the firm has since applied to cancel its
permission. FCA said the fine would have been over £350,000 had the firm not produced evidence of
significant financial hardship. (Source: FCA Fines for Appointed Representative Failings)
FCA publishes MMR FAQs: FCA has published a set of FAQs for mortgage lenders to help them prepare
for implementation of the mortgage market review (MMR). The full list of questions now relate to:
  • contract variations, product switches and further advances;
  • arrears and payment shortfalls;
  • advice and execution-only;
  • responsible lending; and
  • pipeline business.
FCA makes MMR data reporting rules: FCA has published a feedback statement and final rules on
data reporting under the MMR. The new rules will come into force on 1 January 2015, but FCA warns
firms they will need to start planning for change now. The SUP (Product Sales Data and Mortgage
Lenders and Administrators Return) (Amendment) Instrument 2013 amends SUP:
  • in respect of the requirements to report individual product sales and performance data on regulated mortgage contracts; and
  • in respect of integrated regulatory reporting.
The new rules include detail on data items and relevant forms. (Source: FCA Makes MMR Data
FCA consults further on consumer credit fees: FCA is consulting on an amendment to its proposals
for fees for firms applying for consumer credit permissions. Following industry feedback, it proposes not
to change the proposed application fees for limited permission firms, but will now differentiate for full
authorisation applicants, depending not only on whether the application is straightforward, moderately
complex or complex. There will be bandings for firms whose annual consumer credit income is (i) up to
£50,000; (ii) over £50,000 to £100,000; (iii) over £100,000 to £250,000; (iv) over £250,000 to £1,000,000;
and (v) over £1,000,000. The effect of this is that the smallest firm making a straightforward application
would pay only £600 while the largest firm making a complex application would pay £15,000. There will no
longer be a "very complex" category. Comments are due by 16 January 2014. (Source: FCA Consults
FCA fines for APER breach: FCA has fined Christopher Wilford, former finance director of Bradford &
Bingley, £30,000 for failing to provide the board with up-to-date information in advance of a rights issue.
It found Mr Wilford had received information that the financial outlook for the firm might be worse than
expected but did not raise this with the board for investigation. FCA found he had breached the
Statements of Principle for Approved Persons (APER). (Source: FCA Fines for APER Breach)
FCA bans individuals for OPS failings: FCA has banned three individuals from the industry and
banned a further individual from holding any senior position following investigations by it and the Pension
Regulator into two financial advisory firms. CBW Trustee Limited and CBE Pensions Forensics Limited
had appointed the firms to advise six occupational pensions schemes (OPS). FCA found that advice investments around, which resulted in the schemes investing in potentially unsuitable assets and
generated £4 million in commissions. FCA found:
  • Michael Conway was a director of CDW but did not disclose that he might benefit from services provided to it by one of the financial advisory firms. He also influenced advice for personal gain, and facilitated a sham introduction agreement. He received over half of the commission;
  • Andrew Powell allowed CDW to influence his advice, despite misgivings, and personally benefited from this;
  • Martin Gwynn owned one of the advisory firms. He did not get regulatory approval for appointing Andrew Powell as a director, did not monitor Mr Powell's advice and did not properly investigate payments to Mr Conway and others; and
  • Daniel Conway was a director of the other advisory firm which was partly owned by Michael Conway. He was appointed with no prior experience of advising OPSs and failed to take steps to understand his role or to offer independent or suitable advice.
Both advisory firms have since lost their permissions. (Source: FCA Bans Individuals for OPS
FCA confirms fine for mis-sales of GTEP: FCA has confirmed a fine of £100,000 on Westwood
Independent Financial Planners for mis-selling Geared Traded Endowment Policies (GTEPs). The firm had
appealed to the Tribunal, but the Tribunal upheld FCA's decision. The firm, a Scottish firm, has now
entered sequestration. (Source: FCA Confirms Fine for Mis-sales of GTEP)