Preparations for Brexit dominate this week’s items, but this is essentially tidying up ahead of the end of the transition period. There may be more for the regulators to do once we know if there will be a deal, but they have done what they can for now. Perhaps more interesting is that any future decision the Monetary Policy Committee (MPC) takes on zero or negative interest rates is also likely to be in the context of any fallout from whether there is a deal on financial services with the EU.

Elsewhere, it’s worth carefully watching the effectiveness of the steps the Financial Conduct Authority (FCA) is taking to help protect customers in financial difficulty. This feels like a policy not necessarily designed for a second COVID-19 wave that may have very different impacts in different parts of the UK, and I suspect it will need revising. Whatever the eventual guidance, the results are unlikely to be consistent, either between firms or between different supervisory teams. This is not necessarily wrong – tailoring for specific circumstances might well be better – but it will be important to go into this next phase with our eyes open.

The FCA has published draft additional guidance for insurance and premium finance firms. This follows the measures published in August 2020, in which the expectation to grant payment deferrals under that guidance expires on 31 October 2020.

The guidance proposal sets out the FCA’s expectations for the tailored support that firms should be providing from 1 November 2020. Firms should consider the fair treatment of customers in financial difficulty due to circumstances arising from coronavirus and help customers, where possible, to reduce the impact of financial distress, and ensure that customers continue to have insurance that meets their needs.

In a change from the August guidance, firms are no longer expected to proactively contact all customers who miss payments, although firms should consider what other support might be appropriate, especially if the customer could be vulnerable.

Read more >>

Treasury response on UK prudential regime

On 16 July 2020 HM Treasury launched a consultation on updating the UK’s Prudential Regime before the end of the Brexit transition period. This publication consulted on how the government intends to implement the Capital Requirements Directive V (CRD V). The consultation closed on 20 August 2020. HM Treasury has now published the eight responses received from industry, alongside the government’s response.

The responses received were largely in agreement with the proposed approach, including the intention not to apply the CRD V to non-systemic FCA-regulated investment firms and the government’s approach to gender-neutral remuneration. However, additional clarification was sought in some areas relating to macro-prudential updates and the holding company approval regime.

The statutory instrument transposing the relevant provisions of CRD V was laid in parliament on 15 October 2020.

Read more >>

FCA update on directory of certified and assessed persons

On 12 October 2020 the FCA updated its webpage to clarify the data submission arrangements of certified and assessed persons for solo-regulated firms. The FCA explains that, from mid-December 2020, it will begin to display data from firms as that data is submitted. If necessary, firms can submit their information earlier than the deadline of 31 March 2021.

Firms with more than 10 directory persons will be assigned a timeslot to submit their details using the multiple add or amend submission form.

Read more >>

To discuss these or how any other regulations might impact your firm please get in touch.