We have referred to the transitional rules in recent articles. We thought it might be useful to set these out in full in the table below.
Aspect |
Requirements to qualify for transitional treatment |
One-page summary |
Not applicable, the one-page summary is required in all suitability reports from 1 October 2020 although certain elements relating to workplace pension may be omitted – see below. |
Contingent charging |
Firms may charge contingently where they can demonstrate that:
|
Consideration of workplace pension scheme (WPS) |
Firms may:
… where they can demonstrate that:
|
Cash flow modelling* |
Firms need not carry out cashflow modelling as set out in the new rules where they can demonstrate that:
|
* The new rules on cash flow modelling
The rules shown below are applicable from 1 October 2020 unless the transitional conditions listed above apply.
Where a firm prepares a cashflow model, it must:
- produce the model in real terms in line with the CPI inflation rate;
- (if the net income is being modelled) ensure that the tax bands and tax limits applied are based on reasonable assumptions;
- take into account all relevant tax charges that may apply in both the ceding arrangement and the proposed arrangement; and
- include stress-testing scenarios to enable the retail client to assess more than one potential outcome.
ATEB Compliance is now Thistle Initiatives
Huw Reynolds Compliance email, Update
Our new website is: www.thistleinitiatives.co.uk and you can keep up to date with all of our usual regulatory and company updates here.