Regulation Matters April 2020

April 2020

Regulation Matters Welcome to this edition of Regulation Matters covering regulatory updates which impact financial advisers. If you have any questions about any of the subject matters and would like further information on the additional service available to support directly authorised firms, please contact 0800 085 0825 .

Regulation Matters is prodRegulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it inot and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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IN THIS ISSUE

Who is it relevant to? Summary

Action recommended / for your information?

Subject

FCA BUSINESS PLAN 2020/21

All firms

On 7th April the FCA published its 2020/21 business plan setting out its priorities for the year ahead.

Action Recommended

REGULATORY FEES & LEVIES

All firms

The proposed FCA fees for the next round of invoices have been published.

Action Recommended

FOS COMPLAINTS

Mortgage Advisers

New FOS resources for consumers and businesses on complaints concerning fraud and scams. Mortgage lenders renew and expand on their commitment to help existing customers. Actions recommended in last month’s issue of Regulation Matters (March 2020). Overview of FCA planned activity including publications currently delayed due to COVID-19.

Action Recommended

EXISTING MORTGAGE CUSTOMERS

Mortgage Advisers

For your information

REMINDER OF KEY REGULATION MATTERS

All firms

For your information

REGULATORY MATTERS ON THE HORIZON

All firms

For your information

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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FCA Business Plan 2020/21 AT A GLANCE

On 7th April the FCA published its 2020/21 business plan setting out its priorities for the year ahead. Unsurprisingly their immediate focus is to address the challenges presented by the COVID-19 pandemic. In the medium term, the FCA’s key priorities are to: 1.Transform how it works and regulates 2.Enable effective consumer investment decisions

3.Ensure consumer credit markets work well 4.Make payments safe and accessible, and; 5.Deliver fair value in a digital age.

The FCA has also identified six cross sector priorities (including financial crime, culture and operational resilience) along with its planned sector specific work in general insurance and protection, as well as the wholesale financial markets, investment management and retail banking. They specifically note that their supervisory focus will be shifting towards smaller firms over the coming year.

Want to know more? CLICK HERE (or turn to page 8) for a more detailed summary, including recommended actions.

Regulatory Fees & Levies AT A GLANCE

On 7th April, the FCA published its annual consultation paper (CP20/6) on regulated fees and levies to fund itself, the FOS, the Money and Pensions Service, debt advice delivered by the Devolved Authorities and HM Treasury’s illegal money lending expenses. The FCA’s annual funding requirement for 2020/21 is £587.6 million, an increase of 5.2%.

Want to know more? CLICK HERE (or turn to page 12) for a more detailed summary, including recommended actions.

FOS Complaints – Fraud & Scams AT A GLANCE

The FOS has published a new webpage to help consumers avoid scams and fraud. They also provide a summary of how they deal with complaints related to these areas (including a range of case studies). They also remind firms that they must be able to demonstrate that a complaint about a scam or fraud has been investigated thoroughly and have reflected carefully on the circumstances of the events.

Want to know more? CLICK HERE (or turn to page 13) for a more detailed summary, including recommended actions.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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Existing Mortgage Customers On 28th April 2020, UK Finance issued a blog post noting that mortgage lenders have renewed and expanded on a cross-industry voluntary commitment to help existing mortgage customers easily switch to a new deal when they reach the end of their term. The original commitment was announced in July 2018 by UK Finance, the Building Societies Association (BSA) and the Intermediary Mortgage Lenders Association (IMLA). The renewed commitment has been agreed as a result of the COVID-19 pandemic. IN SUMMARY

ELIGIBILITY To be eligible for a product transfer, the following criteria need to be satisfied: n Payments need to be up to date n The end of the fixed-rate term is approaching n No further borrowing is being sought n T here is a minimum remaining mortgage term of two years, and n An outstanding loan of at least £10,000. UK Finance also highlights that the commitment only applies to customers of lenders that are able to offer alternative products to their existing borrowers. They also highlight that advice is widely available from both mortgage brokers and lenders for those who want help to select the right mortgage product for them. Eligible customers will be contacted by their lender when the end of their term approaches, with around one million customers expected to reach the end of their fixed rate deal between now and the end of 2020. This clearly highlights the need for Mortgage Brokers/Advisers to ensure their planning in terms of future client contact is managed effectively.

Any eligible customer coming to the end of a fixed-rate mortgage is routinely offered a product transfer by their lender. This gives customers the option of switching to a new deal with their existing lender instead of automatically moving onto a reversion rate. It will allow eligible existing borrowers to opt for the security of fixing their monthly mortgage payments going forward, including borrowers who have been granted a payment holiday or have been furloughed.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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Reminder of key regulatory matters Below is a useful reminder of key regulatory matters affecting financial adviser firms including actions recommended in last month’s issue of Regulation Matters (March 2020) .

Subject

Recommended Action

Further Information

1

Capital Resource Requirements

Ensure your capital resources do not dip below the required levels.

Subordinated loans may be the solution in some cases. Refer to the FCA’s recent statement HERE . The FCA believes there is a need to intervene to encourage customers to consider switching. Refer to the FCA research HERE . The FCA has published a discussion paper which can be reviewed HERE .

2

FCA Research on mortgage switching

Consider your contact and diary management strategies in terms of dealing with existing/ previous mortgage customers.

3

Transforming Culture in Financial Services

Ensure you are conducting all aspects of your business in the spirit of the Principles, SM&CR and related requirements in pursuit of good client outcomes.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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Regulatory Matters on the Horizon

It’s an ever-changing market with a constant stream of new and updated regulation for financial advisers to worry about. We have provided a brief overview of the FCA’s planned activity as we currently understand it which has currently been deferred/delayed due to COVID-19. Below we have highlighted the current status of relevant FCA publications as we understand it which is under constant review and subject to change. Rest assured, as part of our service we will keep you informed and provide guidance to help you remain compliant.

Delayed Implementation of FCA Rules

Subject

Publication Type Expected Date Intended Audience

1

Pension Transfer Specialist qualifications.

Policy Statement – PS20/03

1st October 2021 PTS’s who also need to attain a QCF level 4 investment qualification. 1st February 2021 Relevant to individuals and firms with an interest in pension drawdown,

2

Retirement Outcomes Review

Policy Statement – PS19/21

including those providing advice and information in this area.

3

Making Platform Transfers Simpler

Policy Statement PS19/29

1st February 2021 Investment Advisers with clients utilising Platform services.

Delayed FCA Consultation Response Dates

Subject

Publication Type Expected Date Intended Audience

1

Various matters

Quarterly Consultation No. 27 Consultation Paper (CP19/32)

1st October 2020 All relevant sectors

2

Building Operational Resilience

1st October 2020 Enhanced scope SM&CR firms

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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Other Delayed FCA Publications In the table below is a list of proposed publications which are likely to be of relevance to the retail financial advice sector either directly or indirectly. These were all due to be published before the end of June 2020 but are currently delayed pending updates from the FCA at an appropriate point. Regulatory Matters on the Horizon (cont.)

Subject

Publication Type

Expected Date

1 2

Mortgage switching

Consultation Paper

TBC

Vulnerable Clients

Guidance & Research TBC

3

Options to change the FCA regulatory framework

Ref: Duty of Care Feedback Statement

TBC

4 5 6 7

Consumer Credit Act (CCA) review

TBC

TBC

General Insurance Pricing remedies

Final Report & Consultation Paper

TBC

Investment Platforms exit fee remedies

Consultation Paper

TBC

Value for Money

Consultation & Discussion Papers Key Findings – Multi- Firm Review

TBC

8

Sale & Advice of Equity Release

TBC

9

General Insurance

Value Measures Pilot

TBC

10 11 12 13 14 15

Intergenerational Differences

Feedback Statement

TBC

Pensions Transfer Advice: Contingent Charging and other proposed remedies

Policy Statement

TBC

Prudential requirements for MiFID Investment Firms

Discussion Paper

TBC

Directory of Certified Persons

Financial Services Register

TBC

Assessing Suitability Review 2

Multi-Firm Review TBC

Prohibiting the sale of investment products to retail clients that reference cryptoassets

Policy Statement

TBC

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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FCA Business Plan 2020/21

FCA’S FIVE KEY PRIORITIES 1.Transform how it works and regulates – The regulator acknowledges that it must continually adapt and raise its standards and has ambitious plans to transform itself and fundamentally change the way it works. Work has already started to achieve the following outcomes and will continue as it moves into 2020/21 and beyond: n  Make faster and more effective decisions – they will evaluate their range of regulatory tools and the speed at which they use them and identify harm. n Prioritise end outcomes for consumers, markets and firms – they will be clearer with firms about the outcomes firms are expected to achieve. n  More effective use of Intelligence and information – they will aim to identify harm and remove it more quickly. They will reduce the regulatory burden on firms by streamlining data and regulatory returns via digital regulatory reporting, as well as the operational impact on firms through better co-ordination between regulators. n Influence internationally on issues that affect UK markets and consumers – they are working with partners and stakeholders to plan for the future of regulation in a post-EU, tech enabled world. They plan to increase public confidence, strengthen the UK’s reputation as an international marketplace and ensure it continues to be a good place to do business. 2.Enable effective consumer investment decisions – The FCA notes that they currently see a significant risk of harm in the pension and retail investment markets. They acknowledge that this is part driven by the way consumers have been given additional responsibility for complex investment decisions due to the shift to DC pension arrangements and the 2015 pension freedoms. They also recognise that consumers are exposed to significant market volatility due to COVID-19. They want to ensure that consumers are supported to make effective investment choices in a fair market by targeting the following outcomes: n Investment products are appropriate for consumer needs – The FCA is concerned that some consumers are exposed to higher levels of risk than they expected or can absorb, including high risk products and/or disguised within an investment wrapper. T hey are keen to ensure that products are designed to meet consumers’ needs, deliver value for money and are marketed fairly and clearly in line with relevant standards. For example, the ongoing assessment of DB to DC transfer advice and their plans to start the assessment of decumulation advice.

The business plan confirms the FCA’s main areas of focus for 2020/21 setting out five overarching priorities, six cross sector priorities, four specific sector priorities and the immediate issues due to COVID-19. For each specific and cross sector area, the FCA has identified its key priorities, specific activities and how it will monitor change. Below we provide a summary of the priorities referred to above. Of particular note is the FCA’s intention to shift its supervisory focus towards smaller firms over the coming year, particularly those that consistently fail to meet their standards. They have also made a commitment to move to enforcement action much quicker with those identified as causing harm. They also note that the current regulatory framework is too focused on rules and process rather than principles and outcomes. The FCA plans to work with the government and its stakeholders to shape the future regulatory framework, which also needs to reflect a future outside of the EU. COVID-19 The FCA has already created a dedicated webpage for firms and consumers and we are prioritising our communications where detail relevant to out Tenet Select clients is published. If you would like access to further guidance and support on COVID-19, including our dedicated support library with daily bulletins and client facing guides, please call 0800 085 0825 for further information on the additional services available to directly authorised firms. Going forward the FCA states that it will focus its attention to ensure that: n Markets function well. n The most vulnerable are protected. n The impact of firm failure is minimised. n It tackles scams. n Consumers and small firms are treated fairly. The FCA explains that the huge uncertainty about the scale and duration of the economic shock resulting from COVID-19 has made planning ahead much harder than usual. It will take forward the priority areas of its work over the next one to three years (see below) where it can do so without diluting its focus on the impact of COVID-19. However, it acknowledges that it may be months before it can fully focus on the activities in the plan. It notes that, even then, the shape and scale of the issues it may need to address may have changed significantly as a result of the virus. It will consider publishing an update to the plan where necessary.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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FCA Business Plan 2020/21 (cont.)

n Consumers make effective decisions about their investments – The FCA considers that the investment distribution process is not working well enough for consumers to make effective decisions about their investments. It wants consumers to have access to high-quality advice and support and be aware of how to protect themselves from scams and fraud. T o help tackle the increasing consumer harm it has seen in the retail investments sector, it is proposing a consumer harm campaign to initially help consumers make better-informed investment decisions. It is consulting (in CP20/6) on a proposal to undertake this campaign and the basis of recovering the 2020/21 costs from fee-payers. T he FCA will continue to assess developments in the financial support market through its RDR and FAMR evaluation to make sure they are meeting consumer needs. n Firms and individuals operate under high regulatory standards and act in consumers interests – The FCA wants to ensure that firms have higher standards of governance, a stronger grip over networks of individuals in their distribution chains and that the regulatory system can better tackle the significant cost of misconduct it sees in this market. 3.Ensure consumer credit markets work well – Business conducted in the consumer credit market tends to be limited (or ancillary to other mainstream regulated activity) in the typical IFA model. However it is worth noting that the FCA expects COVID-19 to have a major impact in this market and proposes to put measures in place that will allow firms greater flexibility where it is in consumers’ best interests. Over the next one to three years they intend to deliver the following outcomes, which may or may not affect some of your clients depending on their needs and circumstances: n  Consumers can find products that meet their needs n Consumers do not become over-indebted by being given credit they cannot afford n  Affordable credit is available to smooth consumption n C onsumers can take control of their debt at an early stage when they fall into financial difficulty 4.Make payments safe and accessible – The FCA’s focus here is payment service providers which both your clients and your business are likely to use to varying degrees as part of the modern economy. They want to ensure that consumers as well as SME’s can safely access a variety of payment services. They also note the COVID-19 emergency and the impact this may have on

payments, firms’ financial strength and consumers’ ability to access cash and payment services. The FCA plans to scrutinize, among other things, the data handling, systems and controls, financial crime prevention measures, operational incidents and outage times so that: n Consumers transact safely with payments firms n  Regulatory responsibilities are met while competing on quality and value n  Consumers and SME’s have access to a variety of payment services.

5.Deliver fair value in a digital age – The FCA wants consumers to be confident that they are getting fair access, price and quality from digital innovation and competition. They plan to target the following three outcomes: n  Consumers can choose from products that meet their needs, at a suitable quality and price – Consumers should be able to access, assess and act on available information to make informed buying decisions and be confident they are receiving appropriate quality and service for the price they pay. n  Digital innovation and competition support greater value for consumers - As markets become increasingly digital, the FCA’s regulatory framework develops in ways that ensure that digital markets continue to deliver fair value for consumers. The FCA expects adequate controls to prevent undue bias or discrimination. n  Vulnerable consumers are not exploited or targeted with poor value products or services, and access to key products and services is fair - The FCA expects firms to have robust policies on fair value for vulnerable consumers and not to target them with poor value products and services. It goes without saying that firms need to take extra care when dealing with those who are (or potentially) vulnerable.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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FCA Business Plan 2020/21 (cont.)

CROSS SECTOR PRIORITIES The FCA has identified the six areas set out below where it will undertake work during the coming year. 1.EU withdrawal and wider international work – The FCA is committed to maintaining its influence as a leading global regulator. This includes strengthening its international position and ensuring that both it and the UK financial services industry are prepared for the end of the Brexit transition period. 2.Climate change – The FCA will continue its policy research to understand how retail investment products are designed, the accuracy of disclosure, and whether this enables consumers to make effective decisions on “green products”. 3.Innovation and technology – The FCA will: n  Invest in new technologies and skills so that it can make better use of data to regulate efficiently and effectively. n  Deepen its engagement with industry and society on artificial intelligence, specifically machine learning, and focus on how to enable safe, appropriate and ethical use of new technologies. n  Strengthen its rules to prevent money laundering. n  Work with domestic and international stakeholders to support a joined-up approach to cryptoassets. n  Replace its Gabriel system with a new platform for collecting firms’ data. This will provide an improved user experience and will include a single identity log-on with its Connect system. n  Take forward its work with the Bank of England (BoE) on Digital Regulatory Reporting. n  Maintain its international collaboration through the Global Financial Innovation Network (GFIN), including seeking to facilitate international sandbox experiments and deepening international knowledge-sharing of innovation approaches and new market trends. n  Explore if and how to expand its sandbox services to foster and encourage the wider adoption of appropriate technologies, particularly for RegTech. 4.Operational resilience – The FCA emphasizes that it expects all firms to have contingency plans to deal with major events and to have tested the plans. They are actively evaluating the contingency plans of a wide range of firms. 5.Financial Crime – The FCA will: n  Start to implement changes to how it reduces financial crime in line with its commitments in the government’s Economic Crime Plan. This includes greater use of data to identify firms or areas that are potentially vulnerable.

n  Continue to take enforcement action where it uncovers serious misconduct, particularly where there is a high risk of money laundering. n  Consult on extending the financial crime data return (REP-CRIM) to more firms to help strengthen its risk- based supervision as part of its wider anti-money laundering (AML) strategy. n  Test how well professional body supervisors in the legal and accountancy sectors have embedded AML strategies. n  Focus its work on ensuring that firms meet its requirements to have effective systems and controls to detect, disrupt and reduce the risk of financial crime. 6.Culture in financial services - The FCA expects compliance with the requirements of the SM&CR as they become applicable and that firms foster healthy cultures where conduct and fair customer outcomes are at the forefront of their business. The FCA will continue to focus on the four key culture drivers in firms: purpose, leadership, approach to rewarding and managing people, and governance, and their effectiveness in reducing the potential harm from firms’ business models and strategies. SECTOR SPECIFIC PRIORITIES The FCA has summarised the outcomes it is working to deliver in four industry sub-sectors during the period ahead (Wholesale Financial Markets, Retail Banking, Investment Management, and General Insurance & Protection). Of most relevance to the IFA sector are the key outcomes they are pursuing in the GI & Protection market, which are summarised as follows: n C ustomers take out GI&P products and services that are suitable for their needs and deliver on their promises at the time of claim - The FCA wants to ensure that consumer communications about products are clear and not misleading both when they take out products for the first time and when they look to renew or switch. It will continue to assess how firms are applying its work on value measures, renewals and switching in its engagement with the market. n C ustomers are not unfairly excluded from GI&P products and services - This is particularly relevant in the light of increasing use of data algorithms, which can automatically discriminate against consumers with protected characteristics. The FCA wants firms to consider the needs of vulnerable consumers and signpost them to specialist providers in the travel insurance market where their needs are too complex for firms to meet. T he FCA intends to publish further work on its market study on general insurance pricing practices following the publication of its interim report in October 2019. The timing of this work is subject to review in light of COVID-19.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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FCA Business Plan 2020/21 (cont.)

n C ustomers get high-quality, fair value, GI&P products and services that deliver on what is intended at the time of claim - Following its finalised guidance on the general insurance distribution chain ( FG19/5 – Nov 2019 ) , the FCA wants to see efficient value chains that ensure the product gives consumers the intended value. n T he GI&P sector is operationally resilient and supplies important products and services with minimal disruption to customers and markets - The FCA has not expanded on this outcome. For those with an interest in the wholesale markets, retail banking and investment management sectors, the FCA’s main areas of focus are listed below. Full details of the outcomes the FCA is pursuing for these sectors can be reviewed in their 2020/21 Business Plan on the FCA website HERE .

Retail Banking – The FCA wants to ensure that: n The sector is operationally resilient and supplies important products and services with minimal disruption to consumers and markets n The incidence of financial crime including fraud is minimised within the payments services and the banking sector n Consumers and SMEs can access services that meet their needs, including cash n Customers get high-quality products and services from retail banks. WHAT SHOULD FIRMS DO NOW? Notwithstanding the immediate issues all firms are facing as a result of COVID-19 (e.g. operational resilience). Ensure that your client’s needs (new and existing) are at the heart of everything you do in pursuit of a good client outcome, delivered by appropriate and fairly priced products and services that also consider the needs of the potentially vulnerable, within a culture of robust governance and individual accountability from the top. Given the FCA’s intention to switch more of their focus to smaller firms, you should ensure that you have considered the areas above in the context of the sectors in which you operate, against current processes practices/controls and make appropriate adjustments where required. You should also ensure that your MI capabilities and client files are complete and in good order given the FCA’s ongoing suitability review work in the DB transfer market, and in consideration of their plans to look at the suitability of decumulation advice more widely. Now may be a good time to review your systems and controls and ensure that you have implemented the relevant aspects of the Senior Managers regime, but also ensuring that you are aware of your future obligations and related actions in terms of the Certification regime and Conduct Rules training for relevant employees. Should you need support in reviewing your systems and controls or SM&CR implementation please contact us on 0800 085 0825 for further information on the additional services available to directly authorised advisers.

Wholesale Markets – The FCA wants to achieve the following: n O rderly transition from LIBOR n C lean markets that make it difficult to commit market abuse and financial crime n W holesale markets that deliver a range of good value, high-quality products and services to market participants n M arkets remain orderly in a range of market conditions, and n M arkets meet users’ needs Investment Management - The FCA will: n C ontinue to assess the impact of remedies from its 2017 Asset Management Market Study n C ontinue to prioritise effective governance and proper implementation of the SM&CR n E valuate how “host” authorised corporate director firms discharge their responsibilities n C ontinue to assess asset managers’ exposure to LIBOR risk.

CLICK HERE to return to page 3.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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The FCA has published their annual consultation paper with proposed fees and levies for the 2020/21 period, with final rates expected to be published in July. COVID-19 Minimum Fees – the FCA proposes to freeze the minimum fee for 2020/21. In short the 71% of firms that are small enough to qualify will see no change from last year (£1,151). Settlement Terms - To help medium and smaller firms the FCA is proposing to extend the period for paying fees by two months to 90 days. This means that 89% of firms will have until the end of 2020 to pay their fees and levies. Larger firms will be expected to pay their fees under the usual payment terms. Fee block allocations The variance (+/-) compared to last year for the fee blocks relevant to intermediaries are shown in the table below. To understand what proportion of the overall levies will apply to your firm the FCA have updated their fees calculator on their website to reflect the proposed rates (which usually don’t change when finalised). Regulatory Fees & Levies

Proposed 2020/21 £m Actual 2019/20 £m

Movement over 2019/20 +/- (%)

Allocation to Fee Blocks

0

A.0 FCA minimum fee

21.4

21.4

+2.1

AP.0 FCA Prudential Fee

17.6

17.2

+1.6

A.13 Advisory arrangers, dealers or brokers A.18 Home finance providers, advisers and arrangers

80.7

79.4

+3.0

18.1

17.6

+3.0

A.19 General Insurance Mediation

29.9

29.0

+30.8

CC2 Consumer Credit – full permission (firms subject to SM&CR). G. Firms subject to money laundering regulations and undertaking consumer buy-to-let business

52.1

39.8

+4.1

7.4

7.1

WHAT SHOULD FIRMS DO NOW? To get an idea of the fees for your firm pending final invoices, consider making use of the updated fees calculator on the FCA website so you can plan accordingly. The figures you will require are from your most recent RMAR section J submission to the FCA. The calculator can be accessed HERE .

Whilst there is a general increase across the board (with the exception of the minimum fee), the obvious stand out figure is the CC2 (Consumer Credit) fee block. However, as most financial advice firms with such permissions are likely to be subject to the minimum fee (less than £50k annual income from Consumer Credit business) due to the ancillary nature of activity in this area, they will be subject to the minimum fee for 2020/21. This will also remain unchanged from last year (£318). Note that consumer credit fee blocks have a separate structure of minimum fees and are in addition to the standard FCA minimum fee noted above.

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DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

13 | Regulation Matters - April 2020

The FOS has published a new webpage to help consumers avoid scams and fraud and shares its experience in terms related complaints for the purpose of: n  Helping consumers protect their personal information, and n  Explaining how it can help if consumers have a complaint and do not think they have been treated fairly. The FOS highlights two recent examples of scams relating to free school meals, and awards of cash sums by the government in the context of the COVID-19 pandemic. Links to two further webpages are included containing ‘information for consumers’ and ‘information to businesses’ outlining the types of fraud and scam complaints the FOS sees, along with a summary of its approach to resolving them. A series of case studies are included. The FOS reminds firms that they must be able to demonstrate that a complaint about a fraud or scam has been investigated thoroughly and have reflected carefully on the circumstances of the events. In cases where a firm believes a customer was grossly negligent, the FOS expects the firm to bear in mind that “gross negligence” has a very high bar. WHAT SHOULD FIRMS DO NOW? Review the ‘information for businesses’ page and related case studies. Consider adding a link to the ‘information for consumer’s page’ on your website. FOS Complaints – Scams & Fraud

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DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

14 | Regulation Matters - April 2020

A range of services to add value to your firm At TenetSelect, we provide a wide range of services and expertise to help directly authorised firms meet their compliance requirements and grow their business. If you have a particular compliance concern or any of our services are of interest, please get in touch by calling 0800 085 0825.

COMPLIANCE SUPPORT SOLUTIONS File checking service n Full range of product areas covered, including pension transfers Themed audit n Systems & controls, Training & Competence, disclosure & ongoing servicing, Centralised Investment Proposition Fully outsourced T&C implementation n One-to-one visits, file reviews, observations/role plays Compliance helpdesk for ongoing queries n Access to our regulatory experts as and when you need support Financial promotions and stationery approval n Assessment of your marketing and stationery to help ensure it meets the FCA’s requirements On-site attendance for FCA visit n A regulatory expert on hand to reduce potential risk Comprehensive compliance guidance manual n Manual which you can adopt for your firm Compliance, systems & controls template documentation n Wide range of documentation available via the Extranet Full suite of regulatory registers n Designed to capture a variety of management information and highlight potential risks Regulatory guidance bulletins n Ongoing updates and guidance to help you remain compliant RMAR report completion n Software to help you do it or outsource it to us

R ESEARCH, TECHNICAL & SPECIALIST INVESTMENT SUPPORT Research & technical support n The Tenet panel, technical guidance, including access to a helpdesk Specialist investment support n Review of EIS/BPR/Tax Planning Schemes and the client profile n Feedback on general suitability of the client and the legitimacy of the scheme BUSINESS SUPPORT SOLUTIONS Paraplanning n Full paraplanning service including data gathering research, analysis and client report New adviser recruitment n Our recruitment service will find the right adviser for your business Exclusive software discounts n Range of discounts to save you money CPD events n Invite to our events where you have everything you need for your CPD Marketing support n Utilise our range of compliant marketing support Protection panels n Access to leading terms via our panels Account management n Access to a dedicated account manager to help you make the most of our service

WANT TO KNOW MORE? To find out how your firm could benefit from the many services available or for details of packages and costs, please call 0800 085 0825 . Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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