Alongside the release of its Customer Investments Data Review on January 18 2021, the Financial Conduct Authority also issued data on its interventions in the defined benefit (final salary) pension transfer market. The common theme of both reports is the prevention of consumer harm and the FCA says that the pension transfer market is “particularly susceptible to consumer harm.”
- CMC proposed Fee Cap Consultation CP21/1 paper: The FCA has released a consultation paper which proposes fee caps on claims management companies (CMC) who assist consumers whose claims fall within a statutory redress scheme (such as the Financial Ombudsman Service, Financial Services Compensation Scheme and Pension Ombudsman). Broadly, this means any CMC specialising in financial mis-selling (with the exception of PPI and Plevin) claims will have maximum fee caps to adhere to. The fee cap amount is dependent on the amount of compensation the complainant is awarded. For example, if a complainant is compensated between £1 to £1499 the CMC firm can only collect a maximum of 30% as a service fee, whereas, if a complainant receives more than £50,000 the service fee cap is at 15% to the limit of a maximum of £10,000. The FCA have sorted the fee caps into 5 redress bands which can be viewed within their consultation paper here. In addition, the FCA proposes further rule changes for CMCs, one notable change is CMCOB 4.2.2 R where firms must seek confirmation (rather than state as a disclosure) from complainants they do not wish to progress the claim individually themselves with the relevant redress scheme. The FCA is asking for responses to the consultation, then link can be found here Restricting CMC charges for financial products and services claims with the consultation period lasting until the 21st of April 2021.
Of all the occasions when you might expect a breach of rules leading to a fine from a regulator to be uncovered, an internal firm training session might not be one of them.
The figures for December 2020 begin to suggest that the pandemic might finally be having an adverse effect on the number of insolvencies, after an extended period earlier in the year when the government’s support schemes may have diluted the financial impact of Covid-19.
In 2020, the Financial Conduct Authority fined only 10 firms, which was the lowest number of monetary penalties imposed since the organisation’s foundation. However, the FCA was keen to highlight the other action it has taken against firms when it recently published the Customer Investments Data Review. The information in the Review was taken from the first ten months of last year.
Credit brokers, including car retailers and motor finance brokers, should be aware that the Financial Conduct Authority (FCA) ban on discretionary commission models for motor finance comes into effect on the 28th of January 2021.
The Financial Conduct Authority (‘FCA’) is in the process of phasing out Gabriel, the regulatory reporting system most regulated firms have been acquainted with.
The Financial Conduct Authority has issued another warning about cryptoassets. Specifically, this one relates to investment promotions that promise high returns.
The Insolvency Service has proposed increasing the amount of debt that can be held in a Debt Relief Order from £20,000 to £30,000.
Happy New Year from Scott Robert Compliance Limited! We have identified the following information for our first newsletter of 2021. The news we will circulate will primarily be on relevant and interesting regulatory updates for FCA regulated firms.