It’s been another year of change for Compliance teams.
Regulatory change in the UK showed no sign of slowing. And that’s before you throw curveballs like Brexit into the mix. With a new man at the helm, the Financial Conduct Authority (FCA) has had a busy 12 months.
Here, we round up some of the biggest developments in the UK compliance landscape – and the impact they will have on your work in 2017.
The FCA announced that Andrew Bailey would be its new Chief Executive. There was speculation that Bailey’s appointment would usher in a softer, more collaborative approach to regulation.
January also saw the launch of the New Bank Start Up Unit, a joint FCA/PRA project. The Unit hopes to help new banks to enter the market, supporting and advising them during the initial years of their authorisation.
The third annual UK Fintech Week took place, dedicated to everything fintech and to looking at ways the UK can remain at the forefront of fintech innovation.
And the FCA released its report on Assessing Suitability: Research and Due Diligence of Products and Services. The report shared the outcomes of its thematic review into the research and due diligence processes carried out by advisory firms on the products and services they recommend to retail clients.
March saw new MCOBS requirements come into force, focusing on vulnerable customers and the need to treat mortgage customers fairly.
TCF was a bit of a theme this month, with the results of the regulator’s thematic review into the life insurance sector also majoring on the need for customers – particularly those with ‘closed book’ policies – to be treated fairly.
The Regulator released its annual Business Plan, setting out seven priority areas and a number of specific projects for the 2016-17 financial year.
And in a speech to global finance leaders, the regulator’s Christopher Woolard set out the criteria for its regulatory sandbox.
In May, the FCA had a warning for currency transfer businesses, emailing all firms in the sector about potentially misleading marketing practices.
Meanwhile, Chief Executive Andrew Bailey issued a shot across the bows for the banks, telling them that their attitudes and approaches needed to change if they were to avoid future scandals.
June saw robo-advice and automation in the spotlight once again, with the regulator launching a new Advice Unit. The Unit will provide firms with regulatory feedback on automated models that aim to deliver lower cost advice to consumers.
There was confirmation from the Financial Ombudsman that PPI remains the most-complained about financial issue.
And following the surprise Brexit vote on the 23rd, the regulator predicted that the decision will have ‘significant implications’ for regulation.
New regulatory guidance on outsourcing was released in July, setting out the rules that FCA- and joint FCA/PRA-regulated firms need to abide by.
The FCA also issued its annual report, detailing progress against the aims set out in its previous business plan. Greater accountability, increased cultural compliance and ongoing investment in innovation for the benefit of consumers seem to be top of the list for the regulator this year.
A new policy statement on insurance renewals set out new rules on renewal communications, which insurers need to comply with by 1 April 2017.
August was a busy month for insurance Compliance teams, with the results of the regulator’s thematic review also released. The report was followed by a ‘Dear CEO’ letter sent to chief executives of principal firms with appointed representatives, while the Authority intervened directly with five firms.
Calls to the Financial Ombudsman are on the increase, according to the Ombudsman’s six monthly complaints data, released in September. While PPI complaints were seen to be declining slightly, non-PPI complaints are increasing.
The MIFID II proposals were open for consultation, with proposals including the plan to make advisers record all phone calls.
October saw another round of complaints data released – this time the Financial Conduct Authority’s own statistics. Perivan Technology blog looks at the main areas of dissatisfaction and what firms need to do to address them.
The regulator also issued an update on its Smarter Consumer Communications project, with best practice suggestions and proposed changes to its Handbook.
And – in a busy month for regulatory news – it also announced ‘Our Future Mission’ – a wide-reaching document setting out its future plans and approach.
The first list of firms approved for the regulatory sandbox was released, and ranged from established household name banks to start-ups and joint ventures.
Also issued this month were the first findings from the much-anticipated FCA Asset Management Market Study, criticising a lack of competition and focusing on the need for transparency.
Meanwhile, new research carried out on behalf of the regulator explored how firms can give better information to customers and potential customers.
Things haven’t quietened down so far in December, with new guidance on fair treatment of long-standing customers in the insurance sector – one of the outputs from the thematic review released in March.
And just this week, the FCA launched its consultation into the Financial Services Compensation Scheme, proposing changes to the way the scheme is paid for and run.
Just summarising the amount of change over the last year is quite exhausting. With a continued push towards self-governance and away from tick-box compliance, the pressure will remain on firms in 2017 to pre-empt regulatory interventions through their own good behaviour.
If you would like some tips on how to do this, and make sure you stay out of the FCA’s sights in 2017, then our Bespoke Financial Promotion reviews may be some help.
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