Compliance Roundup - 11 December 2024
11 December 2024
In this issue: CSA response to HMT consultation: regulation of Buy-Now-Pay-Later
The Credit Services Association (CSA) has submitted a response to the HM Treasury's consultation on the regulation of Buy-Now-Pay-Later (BNPL) credit.
The CSA supports the government's decision to bring BNPL under the Financial Conduct Authority's (FCA) regulation.
The response highlights the need for broader reform of the Consumer Credit Act (CCA) to improve consumer outcomes and reduce compliance challenges for firms. The CSA also raises concerns about the potential exploitation of the Financial Ombudsman Service's
(FOS) complaint system, advocating for a more proportionate and fair complaints regime to prevent undue burdens on BNPL providers.
CSA shares updated due diligence key considerations
Following our work with members on updating the existing CSA resource on due diligence we have now included the final Due Diligence Key Considerations resource in
the Member Zone of the CSA website in the Resources and templates section. As the original due diligence resource was introduced in 2016 it has been updated in light of the passage of time that has elapsed since it was introduced and the various regulatory
changes that have occurred during this period including most recently, to reflect the FCA Consumer Duty rules and guidance in relation to the sale and purchase of product books. The CSA is very grateful to members for their input on the resource.
We anticipate that this resource will continually evolve so will welcome any comments or further thoughts at any time.
FCA publishes new consumer duty good and poor practice reports and focus areas
The Financial Conduct Authority (FCA) has outlined its priorities under the Consumer Duty for the remainder of 2024 and into 2025, aiming to ensure firms deliver good outcomes for retail customers. The FCA emphasises the importance of acting in good faith,
avoiding foreseeable harm, and supporting customers in achieving their financial objectives. Key areas of focus include culture, governance, and continuous monitoring.
Additionally, the FCA has published two new reports on good and poor practices related to the Consumer Duty, covering aspects such as Consumer Duty Board reports, complaints, and root cause analysis. These reports provide insights into how firms are tracking
consumer outcomes, utilising insights, and empowering senior management to drive necessary improvements. Examples of good and poor practices observed during early supervisory work are also highlighted, offering guidance for firms to enhance compliance
and consumer protection
Our Consumer Duty focus areas | FCA
Consumer Duty Board Reports: good practice and areas for improvement | FCA
Complaints and root cause analysis: good practice and areas for improvement | FCA
MOJ response to the consultation paper on including claimant data on the register of judgments, orders and fine
The UK Government has published its response to the consultation on including claimant data in the Register of Judgments, Orders, and Fines. This proposal aims to amend the law to allow the names of claimants in money judgments from the County Court and
High Court to be published on the Register. The consultation sought feedback on the potential benefits and risks of this change, with the goal of enhancing transparency and aiding consumers who may not know the identity of the claimant. The response
outlines the feedback received and the government's next steps in implementing this proposal
Including claimant data on the Register of Judgments, Orders and Fines: a consultation response
FCA seeks further views on enforcement transparency proposals
The Financial Conduct Authority (FCA) has launched the second phase of its consultation on increasing transparency in enforcement investigations. This phase addresses significant concerns raised during the initial consultation and proposes four key changes
to enhance clarity and fairness.
These changes include considering the potential negative impact on firms, extending the notice period before announcements, and including the potential disruption to public confidence as a factor in the public interest test. The FCA aims to gather further
feedback to refine these proposals and ensure they effectively balance transparency with fairness
FCA seeks further views on enforcement transparency proposals | FCA
FCA letter to supreme court on motor finance judgment
The Financial Conduct Authority (FCA) has written to the Supreme Court to support the application for expedition by FirstRand Bank and Close Brothers. These banks are seeking permission to appeal a decision related to motor finance commissions. The FCA
emphasises the importance of resolving this matter quickly to provide legal certainty for the market. The case involves significant points of law regarding bribery and fiduciary duties, which could impact both past liabilities and future business
models in the motor finance sector. The FCA also highlights the potential broader implications for other financial services markets involving intermediary arrangements.
The FCA notes that the motor finance market is substantial, with millions of agreements involving commission payments to brokers. The FCA has been focusing on discretionary commission arrangements (DCAs), which were banned in January 2021. The FCA is
reviewing historical use of DCAs to determine if there were widespread regulatory failures. The outcome of this case could influence the handling of numerous pending complaints and the FCA's regulatory approach. The FCA supports the expedition of
the appeal to ensure consistent legal interpretations and to assist in its regulatory duties.
Letter to Supreme Court: support for application for expedition
FCA inclusive growth: laying foundations, grasping innovations
In a recent speech at the TISA Annual Conference, Sarah Pritchard, Executive Director of Markets and International at the Financial Conduct Authority (FCA), emphasised the critical role of financial inclusion in driving economic growth. She highlighted
how technological innovations, such as open banking, are transforming financial services by making them more accessible and efficient. Pritchard shared insights from her visit to a debt charity in Glasgow, where digital tools have significantly improved
the process of managing clients' finances, illustrating the tangible benefits of innovation in fostering financial resilience.
Pritchard also welcomed the Government's proposals for a National Financial Inclusion Strategy, underscoring the importance of a coordinated approach to address broad social issues like education, poverty, and digital connectivity. She pointed out that
while regulators like the FCA cannot directly increase incomes, they can enhance market integrity, protect consumers, and promote competition to ensure wider access to quality financial products and services.
Inclusive growth: laying foundations, seizing innovations | FCA
FCA Regulation round-up - November 2024
The Financial Conduct Authority (FCA) has released its latest regulation round-up, highlighting several key updates and initiatives. Topics include responding to feedback on increased transparency of enforcement investigations, modernising the redress
system, new rules for Critical Third Parties, and the Chancellor's Mansion House speech.
Regulation round-up - November 2024
Dentons - Non-Financial Misconduct: Insights from FCA Findings
In their recently published article, Dentons discuss the Financial Conduct Authority's recent survey findings on non-financial misconduct (NFM) within the wholesale financial services sector.
The article highlights the importance of addressing issues such as bullying, harassment, and discrimination as central to promoting diversity and inclusion across all financial firms.
The FCA's forthcoming final rules on NFM, expected in response to CP23/20, aim to provide clearer definitions and expectations, helping firms to better manage and report these critical issues
Dentons - Non-financial misconduct: insights from FCA findings
FOS release quarter 2 complaints data
The Financial Ombudsman Service (FOS) has released its quarterly complaints data for Q2 2024/25, providing valuable insights into the trends and issues faced by consumers in the financial sector. This report highlights a significant increase in new complaints,
with a notable rise in cases related to credit cards, fraud, and scams.
The data, covering the period from July to September 2024, also includes a detailed analysis of the most complained-about financial products and the overall uphold rates.
Quarterly complaints data: Q2 2024/25 – Financial Ombudsman service
Consultations
The following are consultation papers that are currently open for responses and may be of relevance to some or all CSA members. Also listed are papers that have recently closed to which the CSA has responded.
If an industry response is warranted and you want to contribute, please contact CSA head of policy, Daniel Spenceley (daniel.spenceley@csa-uk.com).
CP24/25: FCA fees and levies: policy proposals 2025/26
Closing date 24th January 2025
Call for Input Modernising the Redress System
Closing date 30th January 2025
CP24/2, Part 2: Greater transparency of our enforcement investigations | FCA
Closing Date 17th
February 2025
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