FCA plans changes to handbook, FAMR and the way it collects fines

Dec 7th '18

This blog rounds up several changes the FCA intends to make in 2019, relating to its approach to supervision and its approach to collecting fines.


Assessing the Retail Distribution Review and the Financial Advice Market Review

At a conference on 31 October, acting head of strategy Richard Monks announced that the regulator will carry out a full post-implementation review of the RDR and FAMR early in the New Year.


The review will concentrate not just on whether rules have been followed, but on whether the RDR and FAMR have improved outcomes for consumers. This is a continuing focus for the regulator, whose work on improving consumer outcomes is ongoing.


The regulator will write to all wealth managers and investment advisers to get their thoughts early next year.


The future of the FCA Handbook

The regulator is also planning to open a discussion about the future direction of the Handbook – what a future Handbook might look like and what its strategic priorities might be.


The start date for the review is dependent on how Brexit progresses – the FCA has already commented on potential changes to the Handbook as a result of the UK’s departure from the EU. Monks also said that any update ‘needs to be careful it does not get become overly technical’.


Departing from a tick-box approach to compliance

An article in Money Marketing, reporting on the planned changes, believes that ‘Both reviews are part of the FCA’s broader aim to ensure its regulatory approach is not just ticking boxes but ensuring consumers get value for money’.


This ‘bigger picture’ regulation continues an ongoing theme for the Authority – as we reported last week, Andrew Bailey, in a recent speech, talked of regulation needing to be ‘enabling, encouraging and incentivising’ as well as ‘forbidding, requiring and permitting’. Creating a culture of compliance that delivers for consumers rather than just ticking a box is essential.


Tackling rogue advisers and mis-selling

Another challenge for the FCA is the need to address rogue advisers and mis-selling. Here, Monks cited automated reporting as a possible solution, along with machine learning handbooks and robo-regulation.


The regulator plans to release sector-specific documents this month that will explore the potential for using artificial intelligence and machine learning as a way of harnessing big data to identify advisers more likely to mis-sell.


Proposed changes to the collection of fees

At the same time, The FCA is consulting on proposed changes to the way it collects fees. The changes are set out in full on its website, but broadly aim to:


  • Improve efficiency by increasing take-up of online invoicing
  • Set out the fee structure it plans to use for credit rating agencies and trade repositories if responsibility for their regulation passes to the FCA when the UK leaves the EU
  • Define the data used to calculate periodic fees for insurers, as well as proposing adjustments to the weightings it applies to the premium and liabilities elements of the data
  • Clarify how on-account payment rules are applied to the illegal moneylending levy and the Single Financial Guidance Body (SFGB) levies.
  • Streamline the process of setting consumer credit fees by exempting community finance organisations and credit unions
  • Designate part of UK firms’ debt advice funding to supporting debt advice in Scotland, Wales and Northern Ireland


If you want to respond to the fees consultation, you can do so using the FCA’s online response form; by emailing cp18-34@fca.org.uk; or by writing to David Cheesman, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.


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