Since our last publication, the PSR has set out the progress it has made on work carried out to tackle push payment scams following the Which? super complaint. The FCA has also made a number of announcements in the past week including publishing an alert for firms with Appointed Representatives.
Payment Systems Regulator sets out progress on work to tackle payment scams
PSR has published a paper containing a report and consultation on authorised push payment (APP) scams. The report explains what work the PSR has done in the past year to reduce the harm to consumers from APP scams. Specifically, progress has been made in the following areas. Statistics, the industry (as represented by UK Finance) has published the first set of statistics on APP scams, and from 2018 it will collect and publish more detailed data. The second area being best practice standards. The industry has now developed best practice standards that payment service providers (PSPs) will follow when a victim reports an APP scam. This should improve victims' experience and PSPs' response times. The FCA indicates in a related press release that it will actively monitor the adoption, implementation and impact of the standards. The final area being data. The industry has developed a common understanding of what information PSPs can share under current law when responding to APP scam claims. The industry will be seeking to ensure that PSPs can continue to share this information under future legislation and will assist in work to facilitate the recovery of victim's funds. The PSR is seeking feedback on how a voluntary contingent reimbursement model should be implemented and administered by 12 January 2018. If a model is introduced, the PSR plans to implement it by the end of September 2018.
PSR, 7 November 2017
FCA consults on mission document setting out its approach to consumers
The FCA has published for consultation a document entitled "FCA Mission: Our Future Approach to Consumers". The document explores the FCA's approach to regulating for retail consumers and sets out its vision for well-functioning markets and initial views on what "good" looks like for all retail consumers. Consultation closes: 5 February 2018. The FCA has also published a related webpage which has a video of Andrew Bailey FCA Chief Executive, explaining what the FCA is seeking to achieve through the document. The FCA has also made the content available in a video transcript.
FCA, 6 November 2017
FCA alert for firms with appointed representatives
The FCA has published a press release setting out its expectations of firms with appointed representatives and introducer appointed representatives. The FCA expects principals to review and consider the following. The introducer relationships that they and their ARs have, to determine if their firm is under undue influence. Their AR relationships to ensure they remain necessary, appropriate and relevant for their type of business. Their processes relating to persons with significant control and senior management responsibilities or functions within their ARs. Whether their due diligence and monitoring processes are adequate and whether they need to take any additional steps to ensure the actions of their ARs are compatible with their obligations as ARs, and allow the principal to meet their regulatory responsibilities.
FCA, 3 November 2017
FCA consults on clarifying expectations of firms relating to unregulated markets and activities
The FCA has published a consultation paper on industry-written codes of conduct relating to unregulated markets and activities (CP17/37). The FCA proposes a "general approach" to supervising and enforcing its senior managers and certification regime (SM&CR) rules for authorised firms' unregulated activities, including those covered by industry codes.
FCA, 03 November 2017
FCA to consult "in near future" on extending FOS scheme to increase SME access
The House of Commons Treasury Committee has published a transcript of oral evidence given at a hearing on 31 October 2017 on the work of the FCA. The witnesses at the hearing were Andrew Bailey, FCA Chief Executive, and John Griffith-Jones, FCA Chairman. Much of the hearing focused on the independent skilled person's report into the treatment by the Royal Bank of Scotland (RBS) of small and medium-sized enterprise (SME) customers transferred to its Global Restructuring Group (GRG). At the request of the committee, the FCA published an interim summary of the report in October 2017. Among other things, the interim summary encourages the FCA to work with the government to ensure there are adequate protections for less sophisticated SMEs. It suggests this could include the extension of the unfair contract terms protections to SMEs and greater access to the Financial Ombudsman Service (FOS).
House of Commons Treasury Committee, 2 November 2018
BSB consults on good banking outcomes for consumers
The Banking Standards Board (BSB) published a consultation paper seeking views about what the outcomes of a good banking culture looks like to consumers. The consultation will inform the BSB's work to identify good practice by helping it to develop and refine the draft Consumer Framework it has developed to facilitate this thinking. In the context of the consultation, the BSB uses the term "consumer" to refer to both personal customers and micro businesses (that is, retail banking customers and building society members, both potential and actual). The purpose of the framework is to, provide the BSB with a better understanding of consumer issues and concerns as they relate to aspects of the BSB's work, provide the basis for the creation of good practice guidelines for firms that serve consumers, along with a common language for both firms and consumer organisations and enable consumer and civil society organisations to engage more readily with aspects of the BSB’s work.
BSB, 30 October 2017
Cheque and Credit Clearing Company launches cheque image clearing system
The Cheque & Credit Clearing Company (C&CCC) has announced the launch of the Image Clearing System (ICS). The C&CCC published a press release announcing the launch of the Image Clearing System (ICS). It has also published a webpage, FAQs and a factsheet on the ICS. The ICS enables images of cheques to be exchanged between banks and building societies, with the aim of allowing cheques to clear more quickly than they have done previously. The C&CCC states that the effect of the changes will be that if a customer pays in a cheque on a weekday, they will be able to withdraw the funds by 23.59 on the next weekday at the latest.
C&CCC, 30 Oct 2017
HM Treasury consults on draft secondary legislation to support introduction of cheque image clearing system
HM Treasury has published a consultation paper on draft secondary legislation for two measures to support the introduction of the image clearing system (ICS) for cheques.The two Annexes to the consultation paper have been published separately. Annex A sets out the primary legislation enabling cheque imaging (that is, the Bills of Exchange Act 1882). Annex B sets out the text of the proposed secondary legislation, the Electronic Presentment of Instruments (Evidence of Payment and Compensation for Loss) Regulations 2018.
The aim of the proposed legislation is to ensure that the ICS for cheques has no detrimental impact on the existing position of cheque users.
HM Treasury, 03 November 2017
New FCA webpage on model driven machine executable regulatory reporting
The FCA has published a new webpage on model driven machine executable regulatory reporting. One of the key technology areas on which the FCA is focusing is the development of solutions to the increasing challenges faced by financial institutions in implementing their regulatory reporting obligations. Along with the Bank of England, the FCA is exploring how technology can be used to link regulation, compliance procedures, firms' policies and standards, together with firms' transactional applications and databases. If successful, the FCA believes this opens up the possibility of a model driven and machine readable regulatory environment that could "transform and fundamentally change" how the financial services industry understands, interprets and then reports regulatory information.
FCA on 2 Nov 2017
ECON publishes report on action plan on retail financial service
A report on the European Commission's action plan on retail financial services has been published by ECON. ECON published a draft version of the report, which was prepared by Rapporteur Olle Ludvigsson, in June 2017. The procedure file on the report indicates that ECON voted on the final version of the report on 10 October 2017. The European Parliament is scheduled to consider the report during its plenary session to be held from 13 to 16 November 2017.
European Parliament, 31 Oct 2017
European Commission inception impact assessment on legislative proposal for EU framework on crowdfunding
The European Commission has published an inception impact assessment for a legislative proposal for an EU framework on crowd and peer-to-peer finance. In the impact assessment, the Commission sets out information on a potential initiative relating to crowdfunding. The aim of the initiative is to create a framework that will encourage cross-border activity relating to crowdfunding platforms and to provide platforms with a proportionate and effective risk management framework. The Commission is concerned that, to date, crowdfunding activities have been confined to national markets with very little cross-border activity. It is also concerned about the perceived lack of reliability of crowdfunding and peer-to-peer platforms, with the biggest perceived risks being loan defaults, business failures, fraudulent activities and the collapse of platforms because of malpractice.
EC, 30 Oct 2017
European Commission adopts proposal for extended Directive covering both online and offline sales of goods to consumers
The European Commission has published an amended proposal for a Directive on certain aspects concerning contracts for the sale of goods (2015/0288(COD)). The effect of the amendments is to make the proposed new rules on quality of goods, remedies for goods and guarantees become applicable to goods sold by any channel, not just those sold online or by other distance selling methods. The Commission wants to create a uniform set of rules around quality of goods, remedies for defective goods and guarantees across the EU. At present, EU member states have differing rules in this area, subject to the base line established by the minimum harmonisation Sales and Guarantees Directive (1999/44/EC). The goal is to encourage businesses to sell cross-border and ensure a better offering to consumers, both with regard to price and variety. The amended proposal will now be transmitted to Parliament and the Council to continue the ongoing legislative process. Once the Directive is finally adopted member states will have two years to implement it. The implementation deadline will fall after the UK is due to leave the EU, so that, subject to transitional arrangements, it will be for the UK to decide whether to reflect it in national law.
EC, 2 November 2017
Partner, Financial Regulation and Co-head of Financial Services Sector