18Jul

One of the largest trade associations representing financial advisors has suggested that the pace of regulatory change in recent months has been so great that authorised firms have been unable to keep up with the ever-shifting landscape.

The Personal Investment Management and Financial Advice Association (PIMFA) made its comments in a consultation response to the Financial Conduct Authority (FCA) Mission document.

In the response, PIMFA says that:

“The volume of regulatory changes over the past year or so is unprecedented and firms, particularly smaller firms, are unable to digest and action all the rule changes.”

In support of its argument, the Association cited the lack of support provided to Article 3 firms regarding the Markets in Financial Instruments Directive Part II (MiFID II). It claimed that website guidance on this topic was only posted by the regulator some six days after the Directive had come into force.

The Association calls on the FCA to do more to help firms, by commenting:

“The vast majority of firms want to comply with the rules but they do not wish to spend hours trying to figure out what they should do.

“FCA need to review, in conjunction with other stakeholders, their communication with firms including the content of the website to ensure firms are readily able to understand their regulatory obligations and FCA supervisory expectations.”

The pace of change can be rapid at times, and perhaps it illustrates the importance of engaging an expert compliance consultant who can provide re-assurance and guidance.

PIMFA’s response also comments on how the FCA’s Board determines the effectiveness of the regulator’s supervisory approach? It asks whether the fact that there have been “massive claims on the Financial Services Compensation Scheme” indicates that there have been failures in that supervisory approach.

The FCA says that its ‘Mission’ is “designed to provide a guiding set of principles around the strategic choices the FCA makes. It will inform the FCA’s strategy and day-to-day work over the coming years.”

The key themes of the Mission are:

  • What level of consumer protection should a regulator provide?
  • Should protection of vulnerable consumers be a priority, and if so what steps should the FCA take to achieve this?
  • To what extent should the FCA get involved in consumer redress schemes? How should it decide what redress is paid, to whom, and when; and how should it communicate with consumers regarding these schemes?
  • How does the FCA identify wrongdoing within firms, how does it decide what action to take against offending firms and how can it better explain what action it is taking and why?
  • In what circumstances can the FCA take action against firms?
  • How does the role of the regulator tie in with government policy?
  • Is the FCA making appropriate use of its powers relating to competition, supervision and enforcement?
  • How could the FCA Handbook be improved?

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