25Feb

Banks produce FCA guidance video on implementing SM&CR

The Senior Managers & Certification Regime (SM&CR) will be introduced across the financial services industry on December 9 2019. The introduction of the Regime will have a significant impact on most regulated firms, so these firms would do well to listen to the views of senior management in the banking sector, who were faced with the task of implementing SM&CR some three years ago.

With this in mind, the Financial Conduct Authority (FCA) has produced a video in which four retail and investment banking leaders share their experiences. The participants in the 8-minute video are:

  • Dame Jayne-Anne Gadhia, former CEO of Virgin Money
  • Jon Symonds, Deputy Group Chairman at HSBC
  • Liz Nolan, CEO of Europe, Middle East and Africa (EMEA) at State Street
  • Vis Raghavan, Chief Executive Officer of EMEA at J.P. Morgan

The film opens with Jonathan Davidson, Director of Supervision – Retail and Authorisations at the FCA, saying:

“SMCR is very simple, but its effects are radical – they are going to shift the culture of financial services.”

He went on to say that the regulator wants to see two main outcomes of the Regime:

  • Everyone working in financial services should realise that a high standard of conduct is expected of them, and that this goes beyond a tick-box compliance approach
  • Business leaders recognise they are not just responsible for their own actions, but have a responsibility to set the right example

Ms Nolan referred to the Regime having delivered “better individual accountability through transparency, clarity and support”. She also spoke of how her firm ensures that management are provided with the right management information to enable them to carry out their responsibilities.

 

Mr Raghavan said that it had “re-inforced what we stand for” with regards to culture and conduct. He acknowledged that the Regime “requires a lot of planning” and stressed that its requirements must be implemented at Board level and not “delegated to HR, compliance or any other function”.

 

Dame Jayne-Anne said it “codifies and professionalises what it means to be a senior person in an important industry.” She later described a conversation with FCA chief Andrew Bailey, who told her that the SM&CR requirements were actually “what [firms] should be doing already.” She also referred to one of the key concepts of the Regime, which is that responsibilities should not only be allocated to individual senior managers, but that they should be documented as well – each Senior Manager will need to have their own written Statement of Responsibilities. Later, she said “the essence of the Senior Managers Regime isn’t trying to trip us up, isn’t trying to put us in prison, it is to show that everybody does understand what is asked of them”.

 

Mr Symonds suggested that his bank had previously neglected the issue of exactly who was responsible for certain projects and tasks and described the Regime as “exactly what we needed”. Addressing the issue of individual accountability, he commented “it gives the regulators a much easier hook to put people on when things go wrong”, but then counterbalanced this by saying “if people are clear about their roles, responsibilities and accountability … it actually improves the quality of control over the business that is overall beneficial”.

 

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

22Feb

ICO takes various actions against four different types of firm

Firms in all business sectors are advised to take note of three different enforcement actions imposed by the Information Commissioner’s Office (ICO) in early 2019.

A Buckinghamshire-based housing developer was served with an Enforcement Notice by the ICO after one of its customers complained that the firm had not responded to his request for a copy of his personal data (a Subject Access Request). When the firm still did not respond to the customer’s request, the data protection regulator duly prosecuted them in the courts.

The firm pleaded guilty to a charge of failing to comply with an enforcement notice at Westminster Magistrates Court, and was fined £300, with a £30 victim surcharge, and was ordered to pay £1,133.75 towards prosecution costs.

Mike Shaw, the ICO’s Criminal Enforcement Manager, said:

“The right to access your own personal information is a fundamental and long-standing principle of data protection law. New laws brought into effect last May strengthen those rights even further.

“Organisations not only have to respect this right but must also respect notices from the ICO enforcing the law. If they fail to do so then they must accept the consequences, which can include a criminal prosecution.”

A Bristol-based insurance company was fined £60,000 after it sent more than one million marketing emails to individuals who had not consented in advance to receiving this type of communication. The recipients were in fact individuals who had signed up to an organisation that campaigned for a Leave vote in the EU referendum, and the ICO says there were close links between the campaign firm and the insurance firm. The insurance firm was also served with an enforcement notice compelling the firm to take steps to ensure it complies with electronic marketing regulations in the future.

A fine was also imposed on the campaigning organisation.

Elizabeth Denham, the Information Commissioner said:

“It is deeply concerning that sensitive personal data gathered for political purposes was later used for insurance purposes; and vice versa. It should never have happened.

“We have been told both [the insurance company and the political campaigning organisation] have made improvements and learned from these events. But the ICO will now audit the organisations to determine how they are using customers’ personal information.”

Finally, a Liverpool-based legal services firm has been fined £80,000 for making 213 unsolicited marketing calls to individuals who were registered with the Telephone Preference Service (TPS).

So, to summarise:

  • Firms must comply with all Subject Access Requests within 30 days of receipt
  • Firms must not send email marketing to individuals who have not consented in advance to receiving this type of communication – including a link to opt out of future emails is not sufficient
  • Firms must not cold call individuals who are TPS-registered

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

21Feb

Claims practitioner loses Tribunal appeal against MOJ ban

A sole trader in the claims management sector has lost her appeal to the First-Tier Tribunal (General Regulatory Chamber) Claims Management Services and must now cease carrying out claims management activity in the UK.

The individual was actually resident in India but required authorisation from the Claims Management Regulator at the Ministry of Justice (MoJ) as she offered services in the UK. Her India-based call centre supplied leads to UK-based companies concerning payday loan, payment protection insurance, personal injury and pensions claims.

The MoJ had previously imposed four conditions on her claims management authorisation, which were:

  1. Maintain, and provide to the Regulator on request, recordings of all sales calls between the business and its clients and prospective clients
  2. Inform the Regulator of any third party to which she is contracted to provide leads or claims
  3. Inform the Regulator of any third party from which she obtains personal data for the purposes of carrying out regulated claims management activity
  4. Inform the Regulator of the details of any marketing campaigns

The MoJ believed that she had breached all four of these conditions, and had also breached General Rule 15 of its rulebook – the requirement to be registered with the Information Commissioner’s Office in the UK – and General Rule 2e – the requirement to ensure that any referrals, leads or data from third parties have been obtained in accordance with the requirements of the legislation and Rules.

The MoJ said:

“[Name of individual]’s failings were not minor breaches, but systemic failings to comply with her conditions of authorisation demonstrating a disregard for her regulatory obligations and previous enforcement action. As a consequence, the Regulator cancelled her authorisation in order to protect the public.”

Her grounds for appeal included:

  • On the first condition, she said that she had recorded most of the calls, but that her call recording system was not infallible
  • Regarding the second condition, she acknowledged that she was late in reporting details of seven of her clients to the MoJ, but she pointed out that on average these notifications were only seven days late. She argued that this does not constitute a major breach, and that there was no intention to withhold information
  • Regarding the third condition, she acknowledged that she took 46 days to provide details of one company from whom she obtained leads, but that this notification was only 18 days overdue
  • Regarding the fourth condition, she said that she did not initially appreciate that a telemarketing campaign would be classified as a marketing campaign which the regulator would need to know about

In delivering its judgement, the Tribunal noted:

  • The first condition required that she invested in a system which ensured that all calls with consumers would be recorded, and as her system was not able to do this, it was always likely to be the case that she could not meet the terms of this condition
  • For the second and third condition, it was acknowledged that the delays in providing the requested information were not in themselves significant, however details of these third parties were only reported to the Regulator in response to a specific request that the Regulator made. The Tribunal therefore concluded that that she would not have provided the information were it not for that request
  • For the fourth condition, the Tribunal said it was “implausible” to suggest that a telemarketing campaign would not meet the definition of a marketing exercise.

In all four cases, the Tribunal said that she had committed a serious breach.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

20Feb

FCA regulation will introduce the idea of individual accountability to CMC management

The Claims Management Regulator at the Ministry of Justice (MoJ) has issued bans and fines to a number of claims management companies (CMCs) that have breached its rules. However, the current regulator does not have the power to fine or ban any of the individuals who controlled these companies. A few CMC directors have been disqualified by the Insolvency Service, but otherwise no action has been taken against individuals who were, after all, largely responsible for the misconduct at their companies. The current system means it is possible for a company to put themselves into voluntary liquidation to avoid paying a fine, and for the directors of a banned company to simply start up again in a different guise.

All that will change on April 1 when the Financial Conduct Authority (FCA) takes over as the regulator of the claims industry. Under the Senior Managers Regime, to be introduced in December 2019, every CMC (except for sole traders) will need to have at least one person designated as a Senior Manager. Senior Managers must be approved by the FCA as being ‘fit and proper’ before they commence their role and must then be re-approved by their firm on an annual basis. Class 1 CMCs – those with annual turnover of £1 million or above – will also need to appoint an additional Senior Manager to the Compliance Oversight Function.

It should also be noted that the FCA will not have to wait for the introduction of the Senior Managers Regime in order to hold a director or manager of a CMC to account – it already has the power to take enforcement action against individuals if they are deemed to be personally responsible for rule breaches at their companies.

Under FCA regulation, Conduct Rules for Senior Managers of CMCs will require them to:

  • Take reasonable steps to ensure that the business of the firm for which they are responsible is controlled effectively
  • Take reasonable steps to ensure that the business of the firm for which they are responsible complies with the relevant requirements and standards of the regulatory system
  • Take reasonable steps to ensure that any delegation of their responsibilities is to an appropriate person and that they oversee the discharge of the delegated responsibility effectively
  • Disclose appropriately any information of which the FCA would reasonably expect notice

If they fail to meet these standards, the FCA can fine them, or ban them from holding a management position in any regulated firm or take the ultimate step of banning them from working in any capacity in a regulated firm.

2018 saw the FCA impose some large fines on individual members of a regulated firm. Their enforcement action included:

  • A £20,000 penalty to a non-executive director who failed to disclose a conflict of interest
  • A £60,000 fine and a ban from holding senior management roles for a director whose firm failed to give adequate personal recommendations to customers in relation to pension transfers, and failed to manage and disclose material conflicts of interest to its customers
  • A fine of £468,600 and a ban from holding any position with responsibility for client money for a director who did not ensure his firm protected client money adequately
  • A fine of £29,300 and a ban from holding any role in financial services for a director who misled the FCA as to his qualifications and experience

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

19Feb

150,000 PPI policyholders to be informed they could make a Plevin claim

A new wave of payment protection insurance (PPI) complaints can be expected as around 150,000 customers will shortly receive letters highlighting that they could make a complaint under the Plevin ruling.

If the commission payment accounts for more than 50% of a PPI premium, and this commission was not disclosed to the customer, the policyholder can make a complaint under Plevin. The average commission on single premium PPI policies has been estimated as being as high as 67%.

The letters will now be sent by the firms that sold PPI to two different types of customer, inviting them to make a complaint to the firm:

  • Around 10,000 people who were originally told they couldn’t claim on the basis of an undisclosed high commission payment. These complaints were often rejected by firms on the basis that the commission was disclosed at point-of-sale, but these people may also be able to claim if they weren’t reminded about the cost of the commission throughout the policy term
  • Up to 140,000 customers who have previously had PPI mis-selling complaints rejected. These individuals have not so far had their claims assessed for undisclosed commission and have never previously received a letter about being able to claim for undisclosed commission

In a little more than six months’ time, from August 29, consumers will no longer be able to make a PPI claim. This means that time is running out for people to decide if they wish to make a complaint concerning this product, and the deadline applies to both mis-selling and Plevin-related complaints.

The 18 firms that sold the most PPI are funding the ongoing marketing campaign that aims to increase public awareness of the August deadline. This high-profile campaign has featured the likes of Arnold Schwarzenegger and Gok Wan encouraging consumers to decide once and for all if they wish to make a PPI complaint.

The Financial Conduct Authority says its efforts for the remainder of the campaign will focus on strengthening consumers’ understanding of what to do before the deadline, and on how to make a PPI complaint.

The Financial Ombudsman Service says it expects to receive 200,000 new PPI complaints in the current financial year, which ends on March 31 2019, and 250,000 in the 12 months to March 31 2020.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

15Feb

FOS focuses on debt collection issues in Ombudsman News

Issues concerning debt collection complaints make up much of the February 2019 issue of Ombudsman News, the regular newsletter of the Financial Ombudsman Service (FOS)

All firms engaged in debt collection activities need to make sure:

  • They comply with both the letter and the spirit of all Financial Conduct Authority (FCA) debt collection rules
  • They observe TCF at all times
  • They always seek to understand the precise nature of their clients’ difficulties
  • They ask for an income & expenditure form to be completed where appropriate, to assess the borrower’s updated financial situation, and consider the information provided on these carefully
  • They freeze or waive late payment charges where appropriate
  • They signpost people to appropriate sources of advice, e.g. Money Advice Service (MAS), debt agencies such as StepChange, their doctor, the Samaritans
  • They co-operate with debt agencies that borrowers have already contacted on their own initiative

The FOS says that common allegations made in debt collection complaints include that firms have:

  • Made excessive contact with the borrower – whether by phone, letters or both – about a debt
  • Demanded repayment of a debt that didn’t belong to the individual at all
  • Demanded too much money, or tried to collect debt that had already been paid in full or was being managed by a debt management company
  • Added excessive fees to debts
  • Chased borrowers for unenforceable or statute-barred debts

The case studies in the newsletter include:

  • A firm that incorrectly told a customer she owed more was ordered to clear the overcharge and to bring the balance and repayments down to the correct amount, and to pay £100 compensation for the trouble and upset
  • A bank was ordered to pay compensation from the FOS’s extreme band (over £5,000) after it had taken them three years to refer a couple to their specialist vulnerable customer team. By that point, they had been unable to keep up with their payments and the bank had already started court proceedings
  • A doorstep lender was ordered to pay compensation from the FOS’s moderate band (less than £500) after repeatedly phoning him about his debt when he had asked for communication by letter only
  • A bank was ordered to pay compensation from the FOS’s substantial band (£500 to £2,000) after failing to give him a break from their debt communications to take account for his mental health condition

The newsletter also contains the latest complaints statistics. Again, there have been significant rises in the numbers of complaints made to the FOS about some forms of credit.

Instalment loans have an uphold rate as high as 67% in Q3 and 61% across the financial year 2018/19 to date. For guarantor loans, the uphold rate is much lower, at 20% in the last quarter and 27% in the year to date, and both figures are lower than the FOS average uphold rate across all products of 33%.

However, for both types of loans, the FOS has received many more complaints than was the case in the 2017/18 financial year, suggesting borrowers are now much more willing to complain about their lender. For instalment loans, the 2017/18 total was 1,122, yet the first three quarters of 2018/19 saw 3,583 complaints. For guarantor loans, overall complaint volumes remain fairly low, but there were only 210 complaints in 2017/18, yet there have been 349 so far this year.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

 

14Feb

What lies ahead for CMCs with the switch to FOS?

From April 1, things will change significantly for claims management companies (CMCs). From this date they will be subject to the stricter regulation of the Financial Conduct Authority (FCA) rather than the Ministry of Justice regime they have been used to. CMCs in Scotland will also be regulated for the first time.

From April 1, the way complaints about CMCs are handled by external bodies will also change. At present, a customer dissatisfied about the way their CMC has handled a complaint can refer it to the Legal Ombudsman (LeO). However, from April, this will change to the Financial Ombudsman Service (FOS) in common with other FCA-regulated firms.

CMCs that handle financial services claims will already be familiar with how the FOS operates, as they will have made representations to that organisation when firms have declined client’s complaints.

In some ways the way the FOS works is similar, in that the Legal Ombudsman currently adjudicates on whether the CMC has acted in a fair and reasonable manner, and if it has not, the LeO makes legally binding instructions for the CMC to pay compensation.

However, whilst the maximum LeO award currently stands at just £30,000, the FOS can instruct firms to pay redress of up to £150,000, and it is consulting on raising this limit to £350,000.

As with all firms subject to the FOS’s jurisdiction, they will be required to pay an annual levy to fund the Service. CMCs that have more than 25 complaints about them referred to FOS in any one financial year will also need to pay a case fee of £550 for each of the 26th and subsequent cases.

When sending complaint final response letters on or before March 31, the letter sent by the CMC still needs to refer to the client’s right to refer the matter to the LeO, although it may also be desirable to state that the client should refer their complaint to the LeO prior to April 1, and to the FOS if their complaint is made after April 1.

In final response letters sent on or after April 1, clients need to be signposted to the FOS, and the LeO should not be mentioned in the letter.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

13Feb

MOJ focuses on FCA handover in latest bulletin

The Claims Management Regulator at the Ministry of Justice (MoJ) has published what will be its final quarterly news bulletin for claims management companies (CMCs).

As one might expect, most of the February 2019 bulletin concerns the impending switch of claims regulation to the Financial Conduct Authority (FCA).

The first important issue addressed in the bulletin is that existing CMCs will not automatically transfer to FCA regulation on April 1. Instead, any claims company that wishes to continue trading after this date will need to access the Connect portal via the FCA website, and provide the details requested to apply for temporary permission. CMCs are advised to do this as soon as possible.

Next, CMCs are reminded that obtaining FCA authorisation is a two-stage process. Once a company has registered for temporary permission, they will need to submit a second, more detailed, application in order to obtain full authorisation. All CMCs should receive details of the application window during which this application should be submitted, but essentially the application windows are:

  • Between April 1 and May 31 if they are a CMC that handles financial claims, or are a CMC that was not previously regulated by the Ministry of Justice
  • Between June 1 and July 31 for all other companies

The bulletin then highlights that all CMCs will be subject to the FCA’s rules from April 1 and says companies should already be getting familiar with the details of the FCA rulebook, and preparing for the stricter requirements they will face from this date.

CMCs that do not intend to operate under the FCA regime, and who instead plan to exit the market, are referred to the previously published MoJ guidance on ‘ending and transferring client relationships.’

Another change from April 1 is that the organisation that will consider complaints about CMCs will change from the Legal Ombudsman (LeO) to the Financial Ombudsman Service (FOS). When sending complaint final response letters on or before March 31, the letter still needs to refer to the client’s right to refer the matter to the LeO, although it may also be desirable to state that the client should refer their complaint to the LeO prior to April 1, and to the FOS if their complaint is made after April 1.

In final response letters sent on or after April 1, clients need to be signposted to the FOS, and the LeO should not be mentioned in the letter.

The last section of the letter concerns some data protection concerns which the MoJ has observed. It urges CMCs to carefully consider what information they require in support of their client’s complaint, and whether there is an alternative method of obtaining this information.

CMCs are also asked to ensure that Letters of Authority they ask clients to sign are ‘clear, fair and not misleading’. The regulator is concerned that many clients have not understood the range of information that the CMC will access, or the type of complaints that the CMC will pursue on their behalf. The bulletin gives the example of a client who thought that their CMC was pursuing a payment protection insurance complaint on their behalf, but a packaged bank account complaint was submitted instead.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

11Feb

Adviser trade body opposes large FOS award limit hike

The Financial Conduct Authority (FCA) consultation paper CP18/31 proposed major changes to the award limit of the Financial Ombudsman Service (FOS). At present, the FOS can only instruct firms to pay up to £150,000 in compensation to any individual customer. If the FOS believes that a customer has suffered detriment in excess of this amount, it can recommend that the firm pays additional redress, but cannot force it to do so.

Now the regulator is proposing that this award limit is more than doubled to £350,000. The increase would take effect from April 1 2019, and where the complaint concerned issues that occurred after this date, the limit of £350,000 would apply. Where the complaint concerns issues that occurred prior to April 1, the limit would be £160,000. The consultation paper also proposes that both the £350,000 and £160,000 limits are increased in line with inflation in future years.

At present only around 1% of the Ombudsman’s upheld complaints involve customers who may have suffered detriment in excess of £150,000. However, the FCA adds in its paper that the average detriment from these complaints is as high as £305,000 on average, and that the FOS has had one case where the customer detriment was approximately £921,000. Cases involving business loans, interest rate hedging products (IRHPs), portfolio management and self‑invested personal pensions (SIPPs) are most likely to result in detriment in excess of £150,000.

The FCA will publish its final proposals on this issue in March 2019.

The Personal Investment Management & Financial Advice Association (PIMFA), a trade association that represents advisory and wealth management firms, has written to the FCA expressing its serious concerns about the proposals.

Its response opens with a statement expressing disappointment that the FCA did not engage with the financial services industry on this matter before publishing the consultation paper.

The response goes on to explain that the Association believes that introducing such a large increase would have a significant impact on the ability of its member firms to obtain Professional Indemnity Insurance (PII). PIMFA says that “we do not see how FCA can bring forward proposals in the CP having made no assessment of the impact on the PII market” and calls for the FCA to “undertake a detailed analysis of the impact on the PII market” before proceeding with the increase.

PIMFA also notes that one insurer has already estimated that PPI premiums for personal investment firms will rise by 25% from June 1 2019 when a new requirement is introduced regarding company insolvencies. It adds that the proposed FOS limit increase would push up firms’ premiums even further.

The Association says there could be three consequences of the proposed increase in the award limit:

  • A reduction competition, as new firms find it harder to enter the market
  • An increase in the so-called ‘advice gap’, where access to financial advice will become more difficult as firms pass on the costs of higher PII premiums to their customers via higher fees
  • In order to continue to be able to obtain PII cover at an economic cost, firms may have to alter their service offering

PIMFA also states that these changes should not be introduced until the FOS has had time to fully implement the recommendations of the independent review conducted by Richard Lloyd.

Finally, the Association questions whether FOS staff have the competence to adjudicate on awards of such a high amount, and notes that all civil litigation claims above £100,000 are dealt with in the High Court by senior judges that are highly qualified and have significant experience.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

08Feb

FCA recommends that some firms prepare for no deal as Brexit uncertainty continues

The Financial Conduct Authority (FCA) has issued an instruction to certain types of firms to begin making preparations now for the possibility of a no deal Brexit.

These firms are:

  • Firms subject to the MiFID II transaction reporting regime
  • Firms subject to reporting obligations under the European Market Infrastructure Regulation(EMIR)
  • Issuers of securities that are based in the European Economic Area (EEA), and that have securities traded or admitted to trading on UK markets
  • Investment firms subject to the Bank Recovery and Resolution Directive(BRRD) and that have liabilities governed by the law of an EEA State
  • EEA firms intending to use the market-making exemption under the Short Selling Regulation
  • Firms intending to use credit ratings issued or endorsed by FCA-registered credit ratings agencies after exit day
  • UK originators, sponsors, or securitisation special purpose entities (SSPEs) of securitisations they wish to be considered simple, transparent, and standardised (STS) under the Securitisation Regulation

For most firms, who do not fall into any of these categories, they should still consider whether they need to make any Brexit-related preparations. It may be necessary to do this if any of the following apply to the firm:

  • The firm provides regulated products or services to customers resident in the EEA
  • The firm has customers based in the EEA, including those who were previously UK resident but may now have moved abroad
  • The firm markets regulated products or services within the EEA. This would include any firm whose website might in any way be targeted at EEA residents
  • The firm has service providers who are based in the EEA
  • The firm transfers personal data between the UK and the EEA or vice versa
  • The firm is part of a wider corporate group that is based in the EEA
  • The firm receives funding from an entity based in the EEA
  • The firm outsource or delegates tasks to an EEA firm, or vice versa
  • The firm is party to legal contracts which make reference to EU law

The last of these in particular may apply to a large number of firms.

Meanwhile, the FCA has been given a ‘temporary transitional power’ by the Government. In the event that the UK leaves the EU without a deal, the regulator will be able to delay or phase in changes to regulatory requirements made under the EU (Withdrawal) Act 2018 for a maximum of two years from the exit date. This should mean that firms can generally continue to comply with their regulatory obligations as they did before exit.

Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority said:

“The temporary transitional power is an important part of our contingency planning. In the event that the UK leaves the EU without an agreement, it gives us the flexibility to allow firms and other regulated persons to phase in the regulatory changes that would need to be made as a result of ‘onshored’ EU legislation. This will give firms certainty, ensure continuity, and reduce the risk of disruption.

“There are some areas such as reporting rules under MiFID II, where it would not be appropriate to provide a phase-in, as receiving these reports is crucial to our ability to ensure market oversight and the integrity of financial markets.  In these areas only, we expect firms and other regulated persons to begin preparing to comply with the changes now.”

Politically, the nature of the UK’s exit remains extremely uncertain, even with less than two months to go to the scheduled exit date. A vote in the House of Commons indicated that a majority of MPs would support the Prime Minister’s proposed exit deal if unspecified changes were made to the Irish backstop. The PM has now returned to Brussels to seek further concessions from EU leaders.

The Commons also voted against the principle of exiting with no deal, but a separate motion that would have put in place legal safeguards to prevent ‘no deal’ was defeated.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article

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