It has been a busy month for papers and publications at the FCA. These include:
New Consumer Duty CP
The FCA is consulting on plans to introduce a new Consumer Duty, which aims to set a higher level of consumer protection in retail financial markets.
The Duty will have 3 key elements:
- A new Principle – the FCA is consulting on the wording.
- Cross-cutting rules clarifying the Principle’s overarching expectations of firm conduct.
- A suite of rules and guidance setting more detailed expectations in relation to four outcomes – communications, products and services, customer service and price and value.
Feedback is invited by July and expect to consult on proposed rule changes by the end of 2021.
Senior Managers and Certification Regime
Having been subject to delay because of COVID-19, the Senior Managers and Certification Regime (SM&CR) is now fully effective for all firms authorised under the Financial Services and Markets Act. The FCA has taken the opportunity of this milestone to remind firms that this is a beginning, not an end. Boards and accountable Senior Managers should be making sure that SM&CR continues to work effectively in the years to come. All firms should review our expectations and consider how they can best meet them. Larger firms are likely to need to ensure that they have effective systems and processes.
Pensions Stronger Nudge CP
The FCA has published proposals for pension providers to ‘nudge’ consumers to Pension Wise guidance, at the point they wish to access, or transfer for purposes of accessing, their pension savings.
The proposed rules will require pension providers to:
- refer the consumer to Pension Wise guidance
- explain the nature and purpose of Pension Wise guidance and encourage the consumer to take the guidance
- offer to book a guidance appointment and where the consumer accepts that offer, take reasonable steps to book the appointment or provide the consumer with sufficient information to book their own appointment
They also require pension providers to confirm and record whether the consumer:
- declined the offer to receive the Pension Wise guidance (opted out)
- received Pension Wise guidance or
- received regulated advice
Comments are sought by 29 June 2021. The outcome should be published in Q4 2021.
Discussion paper on strengthening financial promotion rules for high-risk investments
Intended to help retail investors make more effective decisions, the discussion paper seeks views on 3 areas where changes could be made to address harm to consumers from investing in inappropriate high-risk investments:
- the classification of high-risk investments
- the segmentation of the high-risk investment market
- the responsibilities of firms which approve financial promotions
Feedback closing date is 1 July 2021.
Operational resilience: preparing for the switch from analogue to digital phone lines
The current analogue phone network will be switched off across the UK at the end of 2025 as we transfer over to a digital phone network, delivered through Voice over IP (VoIP).
This is a major change to the UK’s telecoms networks and will affect anything that currently plugs into existing analogue telephone wall sockets. Firms should be making plans to ensure there is no disruption to the services they provide.
Find out more about the switch here.
All reporting firms have now been moved to the FCA’s new data collection platform RegData. The move to RegData replaces Gabriel as the FCA’s data collection platform.