FCA Regulation Roundup

No 13 - FCA Regulation Roundup for November 2020

The FCA have published their roundup of regulatory matters as at ten of November 2020.

The main highlights for payments are:

Getting ready for a new environment

On 31st December 2020, the transition period will end, and the UK will enter a new phase. It will mean EU law and the rules relating to the single market will no longer apply in the UK.  Two initiatives have been set up to assist your ability to do business:

In October, the FCA published a Policy Statement (PS) setting out our final rules and the consultation feedback they received on extending implementation deadlines for the Certification Regime and Conduct Rules.

Following an FCA request, the Treasury made a statutory instrument delaying the deadline for solo-regulated firms to undertake their first assessment of the fitness and propriety of Certified staff from 9 December 2020 until 31 March 2021.

FCA Logo

The FCA are reminding all firms that use of the FCA logo is not permitted in any documentation or promotional material.

FCA reminds insurance firms to review the value of their products considering the impacts of coronavirus

On 3 June 2020, the FCA published guidance setting out our expectations for insurers and insurance intermediaries to consider the value of their products in light of the exceptional circumstances arising from Covid-19.  Firms should complete their review decide what action to take by 3 December 2020. 

Guidance on payment deferrals for mortgage customers

On 16 November, The FCA confirmed that enhanced support will be available to borrowers experiencing payment difficulties as a result of Covid-19.  The guidance will be fully in force from 20 November, but we encourage firms that are able to start providing this enhanced support sooner to do so.

Guidance on payment deferrals for consumer credit customers

On 19 November, The FCA also confirmed updated guidance to firms setting out enhanced support for consumer credit customers.

Digital Sandbox

The FCA have launched, with the City of London Corporation, a digital sandbox pilot to support innovative firms develop solutions in 3 areas affected by Covid-19. Firms or individuals who want to observe or potentially be involved with a team, can register an account on the digital sandbox website to stay up to date. 

PS20/13: Amendments to the open banking identification requirements (eIDAS certificate)

On 3 November, the FCA published a policy statement confirming the revision of Article 34 of the UK regulatory technical standards for strong customer authentication and secure communication (UK-RTS).

The FCA amended rules will come into force immediately after the end of the transition period at 11pm on 31 December 2020.

The FCA have also introduced a limited transition period until 30 June 2021

Mortgage Intermediary Portfolio Strategy Letter

The FCA recently published their Mortgage Intermediaries Portfolio Strategy Letter. This is being sent to mortgage intermediary firms but is relevant to all firms that offer mortgage advice.

The letter sets out the FCA view of the key risks that firms providing mortgage advice pose. The FCA want firms to consider these risks, the degree to which their firm presents such risks, and to assess their strategies for mitigating them. The letter also outlines their supervisory strategy for firms.

Risk Transfer Agreements

The FCA expect insurers to regularly review their agreements for inappropriate wording and maintain adequate oversight to ensure the TOBAs are complied with. Insurers and Intermediaries have a duty to their clients to ensure that risk transfer agreements are properly in place.

FCA to participate in GFIN cross-border testing of financial products and services

The Global Financial Innovation Network (GFIN) led by the FCA officially launched the cross-border testing initiative on 29 October 2020. The FCA are now inviting applications from firms to test innovative products, services, business models or regulatory technology across more than one country or jurisdiction.

PS20/13: Amendments to the open banking identification requirements (eIDAS certificate)

On 3 November, the FCA published a policy statement confirming the revision of Article 34 of the UK regulatory technical standards for strong customer authentication and secure communication (UK-RTS).

CMCs: Portfolio strategy

On 26 October, we published our Portfolio Letter for Claims Management Companies (CMCs).

The letter explains:

  • The FCA view of key drivers of harm

  • how firms can mitigate harms

  • The FCA supervisory strategy to ensure firms meet our expectations.

The FCA strategy for the next two years will focus on:

  • CMCs’ handling of complex, high value claims

  • personal injury CMCs

  • the wind-down of PPI claims

The FCA expect firms to make changes to reduce potential harms. Where firms cause harm, they will act.

Dear CEO letter – final preparations

Jointly with the Bank of England, the FCA have written a letter to CEOs of UK and international banks on the importance of being prepared for the end of the transition period, in order to minimise disruption and ensure market stability.

All the FCA Regulatory Updates

These highlights were taken from the main list of FCA Regulatory Updates. The complete list is here: