By Kyte Ekstrom | AML, Brexit, communications, Compliance, Consumer Credit, Credit Brokers, Credit Lenders, E Money, FCA Regulation, FinTech, Insurance, Investment, Investment Advisor, Investment Manager, News, Uncategorized | 0 Comments
Don’t have time, or the will, to trawl through endless websites reading long articles about financial news and regulation. We’ve got you covered with our Monthly Regulatory Highlights – snippets of the past months regulatory news and updates (along with links to corresponding webpages and press-releases) – saving you time and making it easy for you to find the permissions, regulations, obligation and news that are relevant to your business.
The Financial Services Bill 2019-2021 – which is currently making its way through parliament – means that the FCA will be able to act more quickly when they consider that firms are no longer carrying out regulated activities.
The statement published on the 18th of January 2021, reminds firms of their obligation to review their regulatory permissions on a regular basis, and to ensure they make the necessary changes in a timely manner. The FCA note that they have the power to cancel a firm’s Part 4A permission if it has not carried on a regulated activity for at least 12 months.
If the FCA believes a firm is not carrying on a regulated activity, it will be able to serve notice on the firm asking for a written response within 14 days. If the firm does not respond, the FCA can then publish a second, public notice explaining that it appears that the firm is not carrying on a regulated activity. The FCA can subsequently vary or cancel the firm’s permissions after only one month.
Firms are required to provide the FCA with an annual attestation that the information held on the Financial Service Register is accurate. Review your permissions and maintain only those you need, this will not only save you the unnecessary fees of paying for unused or out dated permissions, but will also assist the FCA in keeping the Financial Services Register update and help to fight financial crime.
The European Securities and Markets Authority (ESMA) has published a statement to remind firms of the MiFID II requirements on the provision of investments services to retail or professional clients by firms not established or situated in the European Union (EU).
ESMA notes the emergence of some “questionable practices” regarding reverse solicitation following the end of the Brexit transition period. For example, some firms seem to be attempting to circumvent MiFID II requirements by adding general clauses into their terms of business, or by using online pop-up ‘I agree’ boxes, where clients state that any transaction is executed on the exclusive initiative on the client.
The statement cites that where a third-country firm solicits clients or potential clients in the Union or promotes or advertises investment services or activities together with ancillary services in the Union, it should not be deemed as a service provided at the own exclusive initiative of the client”. This is true “regardless of any contractual clause or disclaimer purporting to state, for example, that the third country firm will be deemed to respond to the exclusive initiative of the client”.
The Supreme Court handed down its judgement (on the 15th of January), substantially allowing the FCA’s appeal and dismissing the Insurers’ appeals. In doing so, the Supreme Court has developed the law of concurrent causation and overturned the Orient Express case; a leading authority on BI insurance claims.
The FCA will publish a set of Q&As for policyholders to assist them and their advisers in understanding the test case, and will also publish a list of BI policy types that are potentially affected by this judgment. The FCA will also keep its dedicated webpage updated in order to keep policyholders informed with updates as they arise.
The FCA’s Dear CEO Letter Dated 22nd January 2021 outlines the FCA’s expectations of insurers following the judgment.
Following on from the FCA’s September 2020 report on the pricing of home and motor insurance, the FCA has published a list of Q&As relating to the pricing practices of general Insurance.
Three webinars hosted by the regulators in November 2020 brought in to question concerns that these markets were not working well.
The following Q&As were discussed during these webinars, the scope of the proposed pricing and product governance rules, renewal pricing, discounts and incentives, fair value and reporting.
The regulator will not be in a position to confirm the final rules until the related consultation (CP20/19) has closed on the 25th of Jan 2021.
In short, the document confirms the FCA’s expectation for firms to continue to comply with the recording obligations in the Senior Management Arrangements, Systems and Controls sourcebook (SYSC 10A).
Despite the impact of COVID-19 disrupting the way in which businesses are run, firms are expected to comply with the following:
The FCA has also updated its COVID-19 information page highlighting their expectations for firms to record all relevant communications (including voice calls), when working outside the office. They urge the importance of preventing market abuse risks and note that firms with concerns about meeting obligations, due to coronavirus, should contact the FCA via regular supervisory channels as soon as possible.
HM Treasury has published a consultation paper calling for evidence and setting out a proposed policy approach to bringing cryptoassets into the UK regulatory perimeter. The main focus being on the responsibilities of financial services regulators.
The 46 page paper seeks views on how the UK can ensure its regulatory framework is equipped to harness the benefits of new technologies
The FCA has published three statements updating its expectations around the application of the Senior Managers and Certification Regime (SMCR) and the Approved Persons Regime. These updates follow the publication, in April and June 2020, of statements in which the FCA offered some flexibility in the application of the rules to firms that were impacted by the coronavirus pandemic.
The FCA has published guidance for financial services, including Temporary Transitional Power (TTP), and requires UK firms to follow the TTP directions where applicable. Firms are expected to use the duration of the TTP period to prepare, in order to be fully compliant with the onshored UK regime by the 31st March 2022.
HM Treasury has published a consultation paper setting out a proposed policy approach to bringing cryptoassets into the UK regulatory perimeter. The main focus being on the responsibilities of financial services regulators.
In response to the consultation on the second phase of the Future Regulatory Framework Review, HM Treasury has extended the deadline by one month to 19 February 2021 in order to conclude an examination of how the UK should adapt its approach to regulation outside of the EU to build on the strengths of the existing UK framework arrangements. HM Treasury has also extended the deadline to respond to the Review of Solvency II: Call for Evidence.
The review is underpinned by three objectives:
Financial Services Future Regulatory Framework Review Phase II Framework Review
Find out more about the Top 2021 Trends in Fintech
We are the only compliance consultancy in the UK to specialise exclusively in fintech, meaning we understand your business and your needs. Our dynamic team all hold industry qualifications and are up to date with the latest compliance regulations regarding all spheres of technology based, and alternative finance companies.
Our award-winning services include:
A deep dive look into your businesses activities and processes to determine the level of compliance required in order to fulfil regulatory requirements. Think of this service as a ‘health check’, which can range from checking on one element of your business or a full-firm-wide review.
Our cost-effective retainer service for firms with low compliance requirements.
This popular service is the comprehensive way to ensure your firm remains compliant. Providing you with periodic risk-based compliance reports focused on specific areas of the business, as well as any other ongoing advice or compliance assistance required.
Perfect for situations when you need assistance with one-off issues which require efficient and effective resolution. Comply – Ad hoc incorporates assistance with any regulatory/compliance issues including the following:
Providing you with training services specific to your business and activities. With financial regulation constantly evolving, it is imperative that your firm keeps up-to-date with its requirements, including maintaining the competency of staff. Some of the training services we currently provide to businesses include:
To find out more about Fintech Compliance, our services, and how we can help you stay compliant> Get In Touch