Regulation Matters April 2019

Regulation Matters April 2019

April 2019

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 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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IN THIS ISSUE

Who is it relevant to? Summary

Action recommended / for your information?

Subject

FCA BUSINESS PLAN 2019/20

All firms

The FCA sets out its main areas of focus for 2019/20 across seven individual sectors as well as its cross- sector priorities. The proposed FCA and final FSCS rates for the next round of invoices have been published. The FCA kicks off its review of the RDR and FAMR including a number of stakeholder events in June and July. The FCA sets out its proposals for changes to its mortgage sales requirements. The aim is to give customers more choice in how they buy a mortgage. FCA warns firms in general insurance distribution chains to put customers at the heart of their business models.

Action Recommended

REGULATORY FEES & LEVIES

All firms

Action Recommended

EVALUATION OF THE RDR AND FAMR – FCA CALL FOR INPUT

Firms conducting investment business Firms conducting mortgage business

Action Recommended

FCA CONSULTATION ON MORTGAGE ADVICE & SELLING STANDARDS (CP19/17) INSURANCE DISTRIBUTION CHAIN - FCA THEMATIC REVIEW (TR19/2) AND PROPOSED GUIDANCE (GC19/2):

Action Recommended

All firms conducting GI and Protection business.

Action Recommended

5TH ANTI-MONEY LAUNDERING DIRECTIVE

MLROs/CF11s/ Pensions advisers

HM Treasury consults on transposition into national law (pensions aspects)

For your information

CYBER SECURITY

All firms

The National Cyber Security Centre has updated its guidance for small firms, which now includes a checklist. A new guide has been published by the UK Regulators Network (UKRN) to help staff in financial services and utility companies. The FCA has published feedback to its July 2018 discussion paper on a duty of care and potential alternative approaches.

For your information

NEW GUIDE ON POWERS OF ATTORNEY

All firms

For your information

FCA FEEDBACK STATEMENT - DUTY OF CARE (FS19/2)

All firms

For your information

REMINDER OF KEY REGULATORY MATTERS REGULATORY MATTERS ON THE HORIZON

All firms

Actions recommended in last month’s issue of Regulation Matters (issue 140).

For your information

All firms

Overview of FCA planned activity.

For your information

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FCA Business Plan 2019/20 AT A GLANCE

On 17th April, the FCA published its 2019/20 business plan setting out its main areas of focus. They have prioritised issues by splitting the financial services industry into seven specific sectors. This includes, retail investments, pensions and retirement income, retail lending, protection and GI. They have also identified eight cross-sector priorities where their work will impact multiple sectors during 2019/20. These include subjects such as firms’ culture and governance, the fair treatment of existing customers, Financial Crime/AML and the future of regulation.

Want to know more? CLICK HERE (or turn to page 10) for a more detailed summary, including recommended actions.

Regulatory Fees & Levies

AT A GLANCE On 17th April, the FCA published its annual consultation paper (CP19/16) 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 2019/20 is £558.5 million, an increase of 2.7%. On 30th April, the FSCS published a press release announcing that its final levy for 2019/20 is £532 million, an increase of £16 million from the indicative rates published in February.

Want to know more? CLICK HERE (or turn to page 15) for a more detailed summary, including recommended actions.

Evaluation of the RDR & FAMR – FCA Call for Input AT A GLANCE

The FCA is reviewing the impact of the RDR and FAMR on the market to date and assessing how the market may develop in the future. They are requesting that firms respond to their call for input by 3rd of June which will focus on how customers engage with the market and whether the industry delivers what consumers want and need. They are also hosting a series of stakeholder events across the country in June and July, which offers a further opportunity for you to provide input and feedback on the effectiveness of RDR/FAMR. Places are limited to one per firm in the first instance and are free to attend.

Want to know more? CLICK HERE (or turn to page 16) 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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Mortgage Advice & Selling Standards – CP19/17 AT A GLANCE On 7th May, the FCA published a Consultation Paper setting out its proposals for changes to its mortgage sales requirements, the aim of which is to help give customers more choice in how they buy a mortgage. This includes proposed changes to current FCA rules in terms of mortgage advice and selling standards.

Want to know more? CLICK HERE (or turn to page 17) for a more detailed summary, including recommended actions.

Insurance Distribution Chain – FCA Thematic Review & Proposed Guidance (TR19/2; GC19/2)

AT A GLANCE The FCA expects all GI firms to put customers at the heart of their business models and have appropriate regard for the value customers receive from the GI products and services they manufacture and distribute. This expectation applies to firms in all parts of the GI distribution chain, underpinned by relevant rules and the Principles for Businesses. The FCA has published a number of materials relating to its work on the general insurance (GI) sector: n  A thematic review report (TR19/2), which sets out the key findings from the FCA’s thematic work on the GI distribution chain, its expectations and next steps. n  A guidance consultation (GC19/2) on proposed non-Handbook guidance on expectations of firms involved in GI distribution chains. n  A Dear CEO letter, in which the FCA shares its findings and expectations with GI firms and calls on them to act immediately to identify and mitigate any shortcomings.

Want to know more? CLICK HERE (or turn to page 18) 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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5th Anti-Money Laundering Directive (MLD5)

On 15th April 2019, HM Treasury published a consultation on the transposition of the Fifth Money Laundering Directive into national law. The directive came into force on 9th July 2018 and must be implemented by member states by 10th January 2020. If the UK enters into the draft withdrawal agreement agreed with the EU, it will be obliged to transpose the directive into UK law. Pension practitioners should be aware of the measures in the directive promoting greater transparency about the beneficial ownership of private trusts. Chapter 9 (Trust registration service) notes that the directive will require an expansion in the scope of the Trust Registration Service (TRS) established by HMRC in 2017. Under the directive, trustees of all UK express trusts will be required to register those trusts with the TRS, whether or not the trust has incurred a UK tax consequence. There are no carve-outs or exemptions. Although the position of private pension trusts is not discussed, the Government says it is considering whether other existing registration services for particular trust types could fulfil the registration requirement, to avoid duplicate registration. Currently, a UK private pension trust is not required to register with the TRS if it is already registered with HMRC’s online pensions service.

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