Regulation Watch is a resource aimed at providing our members with updates on the activity of the sector's regulators, highlighting areas of specific interest. 


New Directory of Financial Services workers: The FCA has published its Policy Statement [PS 19/7] creating a new Directory of Indviduals, to help consumers and other stakeholders check on the current and past status of individuals covered by the Certification Regime.  Whilst delighted that our calls for the new directory to include details of an indvidual's professional standing have been included,  in our view the FCA has not gone far enought by failing to include details about the level of professional membership held. In its feedback the FCA stated the reason for this as the lack of 'consistent language when describing comparable levels of accreditation (eg fellow, member, Chartered etc) making comparisons difficult for most consumers'.  Working with our Alliance partners, we will challenge this concern and remain hopeful that a future iteration of the directory will provide better recognition of the knowledge, skills and experience of our qualified members. Our response to the original consultation can still be viewed on the Alliance website.

The FCA Register will remain and hold data on those individuals that require FCA approval, however the new directory will also include those individuals assessed as fit and proper by their firm.

The Senior Manager & Certification Regime will soon be extended to all FCA regulated firms. To mark this, the FCA has released a new video in which senior leaders from banking share their experiences.   

For anyone following the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services might find this webinar from our Australian colleagues at FINSIA helpful in digesting the final report and its recommendations. You may need to regster to view. 

Opening up and speaking out: As part of the FCA's ongoing focus to improve culture, Chris Woolard talks about why diversity and inclusion matter, and highlights the need for firms to understand non-financial misconduct, such as bullying and harassment, is still mis-conduct. 

The Role of Regulation in Encouraging Good Culture: Andrew Bailey comments that the effectiveness of communication with consumers is a test of culture and that therefore they will seek to place trust in experts who can assist with advice and guidance on decisions on saving and investment.  

Patrolling the Ring Fence:  By 1 January 2019 the largest UK banking groups must have implemented ring-fencing – or separation – of their UK retail business from their international and investment banking operations. James Proudman of the Prudential Regulation Authority (PRA) looks at what these changes mean and how the regulator will police the ring fence to ensure these reforms make key financial services more resilient, and protect taxpayers from further bank bailouts.

Trust and ethics - a regulator's perspective:  Andrew Bailey, CEO of the Financial Conduct Authority reminds us of the societal purpose of financial services. 

Ideas and institutions: a growth story: Andy Haldane argues that the economy is undergoing a ‘Fourth Industrial Revolution’. He notes that raising levels of skills and training for workers is one way of limiting the costs of technological disruption.

Payments after PSD2: evolution or revolution: Karen McTeague, FCA Director of Retail Banking Supervision, talks about the opportunities created by PSD 2 and Open Banking, and in particular to remember it is an opportunity to demonstrate trustworthiness to customers.

Five years of macro-prudential regulation: Alex Brazier, Executive Director FSSR at the Bank of England, looks back at the creation of the Financial Conduct Authority, Prudential Regulation Authority and Finance Policy Committee and considers the challenges for the future including Brexit, household lending and the unbundling of banking services.

Recent News

Cryptoassets: The FCA has published two pieces of research looking at UK consumer attitudes to cryptoassets, such as Bitcoin or Ether. The research includes qualitative interviews with UK consumers and a national survey. Christopher Woolard, the FCA’s Executive Director of Strategy and Competition commented: 'This research gives us evidence we haven’t had before about how consumers interact with cryptoassets.

FCA near final rules on extension of SMCR: In January 2019 the FCA started consulting on some minor changes to the near final rules [published as PS18/14, along with Guides].; The legal functions of firms will be excluded from the overall responsiblity requirement, and the client dealing function will be amended to exclude purely administrative functions.  For more details about these, as well as some otehr minro handbook changes [ref. non executive directors], please see FCA CP19/4. As a gentle reminder, changes to the existing regime,  which include the creation of a new Prescribed Responsibility for ensuring staff are trained on the Conduct Rules and for compliance with FCA reporting requirements, came into effect from 1st November 2018. To ind out more about how the Institute can help, click here

Regulators Focus on Climate Change Related Risks: Both the PRA and the FCA published papers addressing this important issue. The PRA consulted on a draft supervisory statement which clarified its expectations; non intervention is favoured, but clearly there is more firms should be doing strategically to ensure they have given signfiicant consideration to their exposure to climate related risk, as well as the opportunities possible from the move to a low carbon economy. Our feedback to the statement will soon be available to read. The FCA opened a discussion on the issue, setting out its approach and focus. in our response we've favoured a non intervention policy, given that there are already some excellent, global initiatives, such as the TaskForce for Climate-Related Financial Disclosures [TCFD]. To follow the progress of this FCA discussion, visit their website

FCA Strategic Review of Retail Banking Business models [not to be confused with the work by the CMA - see their report here]. Launched in May 2017, the specific objectives of the FCA review were to:

  • understand retail banking business models in greater depth
  • understand how free-if-in-credit banking is paid for
  • understand the impact of changes such as increased use of digital channels and reduced branch usage on business models 

The final report was published in December 2018 and highlights some key activities which the FCA will undertake: 

  • on-going monitoring of retail banking business models
  • analysis to understand the value chain in new payment services business models
  • exploratory work to understand certain aspects of SME Banking

The FCA has also identified 3 potential areas requiring coordinated action in the future to ensure a retail banking sector that works well for consumers:

  • continued access to banking services
  • appropriate use of customer data
  • system resilience and effective prevention of financial crime and fraud

FCA Approach to Consumers and Duty of Care Discussion: In July the published its final version of its Approach to Consumers outlining the measures it will take to protect consumers and setting out when and how the regulator takes action.. Alongside this was published a new Discussion Paper on a Duty of Care which explores whether a new duty of care could enhance good conduct and culture and provide additional protections for consumers.  We provided feedback to this discussion paper and await further output - although this is probably on the back burner due to FCA work relating to BREXIT. 

High Cost Credit reforms: In December 2018, the FCA announced the next package of measures forming part of its high-cost credit review. It has announced proposals to change how banks charge for overdrafts, which would bring to an end to banks charging higher prices for unarranged overdrafts. This forms part of the work relating to the strategic review into the retail banking market and links to ongoing work to address the serious concerns the regulator has regarding harm to consumers, particularly to vulnerable consumers, from the disproportionate burden of high charges and repeat use of overdrafts. 

Mortgages: The FCA has published its interim report into the mortgage market. The report found that competition in the mortgage market is working well for many people. Recommendations include: that it be easier for consumers to find the right mortgage; there should be a wider range of tools providing consumers with a choice about the support (including advice) that they receive; that consumers choosing an intermediary should be able to do so on an informed basis; and that consumers should be able to switch more freely to new deals without undue barriers.  In CP18/41 the FCA sets out proposed requirements intended to gather more data about internal product transfers and product performance to improve its understanding of possible conduct and competition harm in the sector.

FCA Guidance on Cryptoassets The FCA has been carrying out work, both as part of a broader UK Cryptoasset Taskforce and independently. This consultation paper is the next step in the FCA’s work on cryptoassets and sets out details on where different types of cryptoassets might fall in the regulatory perimeter

The Financial Stability Board [FSB] has set out its toolkit for Strengthening Governance frameworks to Mitigate Misconduct Risk. It sets out 19 steps that regulators and firms can take to tackle the causes and consequences of misconduct. Tool 8 notes that ‘Individuals are subject to professional standards of competence and conduct in the discharge of their duties’. The FSB is also developing a cyber lexicon aimed at ensuring clear and common understanding of the issues and threats in this field. It comprises a set of 50 core terms related to cyber security and cyber resilience in the financial sector.orld Autism Awareness Week which ran 26/3-2/4.] The FCA's intention is to raise awareness of the issues some autistic people face when accessing financial services.

BSB’s Principles for Strengthening Professionalism in Banking: Output from the BSB’s year-long project to explore ways of strengthening professionalism in the UK banking sector for the benefit of employees, customers, clients and wider society. CB:PSB and Institute colleagues actively participated in this project which can be found here.

Innovation: The FCA has also published a report outlining lessons learned during the first year of its regulatory sandbox.  The sandbox allows firms to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place. Read more here.

Live and Local to check if the FCA are running any events, in your area on a topic of interest follow this link to their website