Consultation Paper: CP22/19: Creation of a baseline financial resilience regulatory return.
The FCA are seeking views on their proposed rules to introduce a new financial resilience regulatory return for solo-regulated firms. The new return will be referred to as ‘FIN073 - Baseline Financial Resilience Report’. This will replace the current FCA financial Resilience Survey (FRS) data collection (formerly “Covid-19 Impact Survey”). The FRS is a short survey the FCA launched in June 2020 to collect basic financial data from approximately 23,000 legal entities. They have continued to collect this data via additional surveys to help them to understand the risk of firm failure as well as risks across the financial services sector.
Guidance: The Pensions Regulator sets out what to expect if you are the subject of enforcement action.
The Pensions Regulator (TPR) published their enforcement strategy and updated prosecution policy and consultation response. These new policies and the strategy are key drivers in implementing their long-term corporate strategy. The new enforcement policy includes new powers given to TPR in the Pensions Schemes Act 2021 (PSA21) and replaces and consolidates three previous compliance and enforcement policies on DB funding, DC and PSPS schemes. The policy sets out the outcomes TPR might pursue, and ways it might go about achieving them, in pursuit of its goal to improve safety and security for pension savers. The prosecution policy has also been brought up to date to reflect new criminal powers in the PSA21 and other developments.
Consultation Paper: CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels.
The FCA concerned that firms are making exaggerated or misleading sustainability-related claims about their investment products; claims that don’t stand up to scrutiny (greenwashing). This may lead to consumer harm and erode trust in the market for sustainable investment products.
Their proposals aim to build transparency and trust by introducing labels to help consumers navigate the market for sustainable investment products, and ensuring that sustainability-related terms in the naming and marketing products are proportionate to the sustainability profile of the product. We are also proposing disclosure requirements, including accessible consumer-facing disclosures informed by behavioral research (Occasional Paper 62), as well as more detailed product- and entity-level disclosures.
The FCA proposals focus on asset managers and their UK-based fund products and portfolio management services. We will look to expand and evolve the regime over time.
They are also proposing an ‘anti-greenwashing’ rule that would apply to all regulated firms, reiterating that sustainability-related claims must be clear, fair and not misleading.
This work forms part of the commitment made in the FCA ESG Strategy and Business Plan to build trust and integrity in ESG-labelled instruments, products and the supporting ecosystem. The FCA are also playing our part in the delivery of the Government’s Roadmap to Sustainable Investing.
The FCA already took action last year to warn firms who are exaggerating the sustainable characteristics of their products and services, issuing a Dear Chair Letter. Their new proposals build on the Guiding Principles set out in that letter, and incorporate the broadly positive feedback to our discussion paper (DP21/4) last year. The FCA also build from the TCFD-aligned product and entity-level disclosure rules that they introduced last year (PS21/24).
Consultation Paper: Recommendations 25.
The Financial Action Task Force (FATF) is conducting a review of Recommendation 25 and its Interpretive Note (R.25/INR.25) on the transparency and beneficial ownership (BO) of legal arrangements. The FATF is also considering amendment of the definition of beneficial ownership in the glossary, to provide more clarity regarding legal arrangements.
The FATF’s objective is to improve R.25 and its Interpretive Note to better meet its stated objective to prevent the misuse of legal arrangements for money laundering or terrorist financing.
In particular, the FATF would welcome comments on the following:
Are FATF proposals adequate to mitigate the risk of misuse of legal arrangements and to ensure access to BO information?
- Are proposals clear and are there any issues which need further clarification or that should be addressed in guidance?
- What is the expected impact of the proposals on legitimate activity? In particular, what are the challenges for implementation?
Policy Statement: PS22/12: Pensions Dashboards rules for pension providers
The FCA has finalised rules that require FCA regulated pension providers must:
Complete connection to the digital architecture operated by the Pensions Dashboard Program – which is a function of the Money and Pensions Service (MaPS) be ready to receive requests to find pensions, and search records for data matches be ready to return pensions information to the consumer’s chosen pensions dashboard.
- Who this is for/ This publication will primarily interest:
- life insurance companies
- operators of self-invested personal pensions (SIPPS)
- consumers
- bodies representing the interests of consumers
- trade bodies representing pension providers
It will also interest:
- third party pensions administrators and software providers
- parties interested in offering a commercial integrated service solution to pension providers
- decumulation-only providers that are interested in offering accumulation products in the future
- individuals and firms providing advice and information in this area
Consultation: The Pensions Regulator calls for views on its new dashboards compliance and enforcement policy.
The Pensions Regulator (TPR) is calling on occupational pension schemes, their administrators, providers, and the wider industry, to respond to its newly published consultation on dashboards compliance and enforcement.
The Pensions Dashboards Regulations 2022 introduced new duties on certain trustees and scheme managers to enable dashboards to function and new powers for TPR to regulate these duties. The compliance and enforcement policy sets out TPR's expectations on how schemes should comply with new regulations, and its approach to regulating dashboard obligations.
While TPR already regulates trustees and workplace pensions, a key part of complying with dashboard obligations will rest with third parties, such as administrators, employers and integrated service providers. New legislation has been introduced enabling TPR to issue third parties with compliance notices. If they do not comply, they could be fined up to £50,000 (and individuals up to £5,000) for each breach. This is alongside other new powers to fine trustees and managers in the case of non-compliance with dashboard regulations. They include an option to issue penalties of up to £5,000 to individuals and up to £50,000 in other cases for any instance of a single compliance breach. The consultation will close on Friday 24 February 2023.
Consultation Paper: CP22/23: Regulatory fees and levies: policy proposals for 2023/24
Why we are consulting
We are funded entirely by fees and levies from the firms we regulate and we do not receive any funding from other sources. We are setting out our approach to setting fees for 2023/24 and we provide updates on some fees policy topics. We also propose a new application fee for financial promotions and some changes to the fees paid by data reporting service providers, trade repositories and securitisation repositories.
Who this is for all FCA fee payers any businesses considering applying for FCA authorisation or registration Each chapter deals with a specific policy area and identifies the bodies it will affect.
This CP is not directly relevant to retail financial services consumers, although our fees are indirectly paid by users of financial services.
Significant Industry Fines
The Financial Conduct Authority (FCA) has fined Gatehouse Bank Plc £1,584,100 for significant weakness in its financial crime systems and controls.
Between June 2014 and July 2017 Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing. Gatehouse also failed to undertake the correct checks when some of the customers were classed as Politically Exposed Persons (PEPs).
FCA fines Julius Baer International Limited £18m and publishes decision notices for three individuals
The FCA has fined Julius Baer International Limited (JBI), an investment advisory and wealth management firm, £18,022,500 for failing to conduct its business with integrity, failing to take reasonable care to organise and control its affairs and failing to be open and cooperative with the FCA.
FCA fines Santander UK £107.7 million for repeated anti-money laundering failures
The FCA has fined Santander UK Plc (Santander) £107,793,300 after it found serious and persistent gaps in its anti-money laundering (AML) controls, affecting its Business Banking customers.
Between 31 December 2012 and 18 October 2017, Santander failed to properly oversee and manage its AML systems, which significantly impacted the account oversight of more than 560,000 business customers.
Santander had ineffective systems to adequately verify the information provided by customers about the business they would be doing. The firm also failed to properly monitor the money customers had told them would be going through their accounts compared with what actually was being deposited.
