Since our last publication, the PRA has published a follow-up to its statement on consumer credit, and the FCA is consulting on the extension of access to FOS to SMEs

UK

PRA follow-up to its statement on consumer credit

The PRA has published a letter as a follow-up to its statement on consumer credit, which was published in July 2017. The statement raised ten issues for firms to consider and this letter now sets out the key findings from the PRA and identifies points for firms to action. It looks at:

  • Management information (MI) and governance;
  • Medium-term economic downturn risk;
  • Creditworthiness and affordability assessments;
  • 0% interest credit card offers;
  • Unsecured personal loans; and
  • Guaranteed future value (GFV) in motor finance, and stressed falls in car prices

PRA, 17 January 2018

 

FCA consults on SME access to FOS

The FCA has a published a consultation paper (CP18/03) on extending access to the Financial Ombudsman Service (FOS) to small and medium-sized enterprises (SMEs). The FCA proposes to change its definition of an "eligible complainant" in the Dispute resolution: complaints (DISP) section of the Handbook to include a new category of small businesses. This will be defined as businesses that are too large to be micro-enterprises, but have an annual turnover below £6.5 million, an annual balance sheet total less than £5 million and fewer than 50 employees. The consultation closes on 22 April 2018 and the FCA intends to publish a policy statement and final rules in the summer 2018, with changes ti DISP to come into effect in December 2018. 

FCA, 22 January 2018

 

Joint PRA and FCA consultation on 2018/19 management expenses levy limit for FSCS

The PRA and FCA issued a joint consultation paper on the management expenses levy for the Financial Services Compensation Scheme (FSCS). The PRA and FCA must set a limit for the total management expenses that the FSCS can levy on firms. The proposed levy of £7.7 million would apply from 1 April 2018 to 31 March 2019 and would cover the proposed management expenses budget and an unlevied contingency reserve. The consultation closes on 16 February 2018.

PRA & FCA, 18 January 2018

 

FCSC plan and budget for 2018/19

The FSCS has published its Plan and Budget for 2018/19, outlining the expected management costs and initial levy forecast that firms will pay in 2018/19. The final levy will be confirmed in April 2018.

FSCS, 19 January 2018

 

PSR responds to Treasury Committee concerns on future of UK free-to-use ATMs and outlines related work programme

The Payment Systems Regulator has published a letter responding to concerns raised by the House of Commons Treasury Committee regarding the future of the UK's free-to-use ATM network and expectations of the PSR's role.

Payment Systems Regulator, 17 January 2018

 

FCA policy statement on third consultation on IDD implementation

The FCA's third policy statement (PS18/1) on implementing the Insurance Distribution Directive has been published, setting out near-final rules.

FCA, 19 January 2017

 

FCA regulation round-up January 2018 The FCA has published its regulation round-up newsletter for January 2018 which includes an article asking regulated firms to help the FCA reduce the number of calls from consumers responding to letters, emails or sales literature they have received from regulated firms. The FCA asks regulated firms to review their use of its details on their websites, emails and sales literature and remove the FCA's phone number, reminding firms that it is not a regulatory requirement for firms for give the FCA's phone number within their status disclosure and refers firms to Chapter 4 of its General Provisions Sourcebook (GEN).

FCA, 18 January 2017

 

EU

European Parliament publishes letters on IDD postponement

The European Parliament has published a letter sent by the chair of the Committee on Economic and Monetary Affairs (ECON) dated 9 January 2018 welcoming the legislative proposal to postpone the application of the Insurance Distribution Directive (IDD) to 1 October 2018. The letter confirms the European Parliament is also positively considering a postponement of the date of transposition of the IDD (as well a postponement to the date of application) by a few months, such as 1 July 2018 in order to ensure member states properly implement the new regulatory framework for the benefit of consumers and industry.

European Parliament, 16 January 2018

 

EBA final report on implementation of guidelines on methods for calculating contributions to deposit guarantee schemes

The EBA has published its final report on the implementation of its guidelines on methods for calculating contributions to deposit guarantees schemes (DSCs). The report which assesses authorities' compliance with the guidelines outlines that the guidelines have broadly met the aim of introducing different contribution levels for institutions according to their riskiness, and the approach taken by member states in line with the guidelines seems to ensure a good level of transparency. Therefore there does not appear to be a specific need to amend the guidelines, however further analysis and greater experience of the risk-based systems in use is needed before proposing any changes to the guidelines, and some changes to the way information is disclosed to the contributing institutions may be considered in the future.

EBA 17 January 2018