September Monthly Regulatory Update

By Kyte Ekstrom | Uncategorized | 0 Comments

Investment Services

Financial Services and Markets Act 2000 (Prudential Regulation of FCA Investment Firms) (Definitions for the purposes of Part 9C) Regulations 2021 

The Financial Services and Markets Act 2000 (Prudential Regulation of FCA Investment Firms) (Definitions for the purposes of Part 9C) Regulations 2021 (SI 2021/1046) have been published along with an explanatory memorandum.

The Regulations define the terms ‘parent undertaking’ and ‘group’ for the purposes of Part 9C of the Financial Services and Markets Act 2000, which gives the FCA powers to make rules in relation to parent undertakings of FCA-regulated firms (whether the parent is itself authorised or not).

The legislation also applies to activities that are undertaken by small businesses, if they fall within the scope of the IFPR.

The Regulations come into force on 6 October 2021.

The Financial Services and Markets Act 2000 (Prudential Regulation of FCA Investment Firms) (Definitions for the purposes of Part 9C) Regulations 2021 (SI 2021/1046)

Explanatory memorandum

Webpage

General Regulation Updates

FCA Guidance on New Cancellation and Variation Power

The FCA has published draft guidance on a new power that allows for faster action to remove regulatory permissions that are no longer being used by financial services firms.

Consultation paper (CP21/28) proposes changes to the FCA Handbook and Enforcement Guide to reflect the new cancellation and variation power granted under the Financial Services Act 2021.

This power is set out in Schedule 6A to the Financial Services and Markets Act 2000 (FSMA), and allows the FCA to vary or cancel firms’ permissions more quickly and efficiently if they are no longer using them.

Among other things, the FCA proposes:

  • To amend chapters 6 and 7 of the Supervision manual (SUP) to describe the new power and how the FCA will use it.
  • To amend the Enforcement Guide to refer to the FCA’s possible use of the power alongside investigations.
  • To add guidance to the Compensation sourcebook (COMP) and the Dispute Resolution: Complaints sourcebook (DISP) to provide clarity about what happens to Financial Services Compensation Scheme (FSCS) claims and complaints when the FCA annuls a decision to cancel.

The consultation closes on 29 October 2021.

Consultation paper: New cancellation and variation power: Changes to the Handbook and Enforcement Guide (CP21/28)

Webpage

Press release

Response form

FinTech Start-ups

FCA Updates Webpage to Announce Launch of Second Application Window  Green FinTech Challenge

The FCA is taking a more active role in driving innovation in an area where they see clear benefit to UK consumers and markets. With this in mind the FCA has updated their Green FinTech Challenge webpage to announce the launch of a second application window. The Green FinTech Challenge is aimed at firms looking to deliver innovation to aid the transition to a net zero economy.

The FCA encourages applications from firms developing innovative green solutions that require regulatory support to bring their proposition to market. The Green FinTech Challenge is open to start-ups, incumbents and technology providers. The FCA are particularly interested in firms that are developing innovations in the area of Environmental, Social and Governance (ESG) data and disclosure. For example, products and services that will:

  • enable transparency in disclosure and reporting on sustainability by companies along the investment chain
  • help consumers better understand the ESG characteristics of relevant products and providers they engage with, as well as provide visibility around alternatives aligned with their needs and preferences

The FCA state that they are not limited to the above and will consider all proposals in the areas of sustainability and climate change that meet their eligibility criteria.

Successful applicants will benefit from a package of our firm support services (Direct Support, Advice Unit and the regulatory sandbox). In addition, the firms will be offered bespoke support and engagement for this ‘green cohort’, for example, taking part in showcasing and networking events.

The FCA states that it is particularly interested in firms that are developing innovations in the area of ESG data and disclosure, such as products and services that will:

The FCA has also published a webpage that explains how its Green FinTech Challenge and digital sandbox are different. The deadline for applications is 15 November 2021.

Updated webpage: Green FinTech Challenge 2021

Green FinTech Challenge and Digital Sandbox: which service to apply for