|Auctioning of Greenhouse Gas Emission Allowances
Policy Statement Ref: PS 12/01
13th January 2012 52 pages
This Policy Statement reports on the main issues arising from Consultation Paper CP 11/14 (Auctioning of greenhouse gas emission allowances) and publishes final rules
|Mortgage Market Review: Proposed Package of Reforms
Consultation Paper Ref: CP 11/31
16th December 2011 585 pages
A comprehensive set of plans to prevent a return of the risky mortgage lending seen in boom times.
At the core of the proposals are the following principles:
Consultation period ends on 30th March 2012.
|Proposed Regulatory Prudent Valuation Return
Consultation Paper Ref: CP 11/30
14th December 2011 13 pages
Of interest to UK banks and BIPRU 730k firms..
The consultation calls for greater harmonisation of firms’ accounting approaches to the fair valuation of assets, which vary substantially at present. At present companies are required to present quarterly reports on differences in approach; the proposed new regime, however, will require a consistent format allowing greater comparability.
Consultation period ends on 14th February 2012.
|Distribution of Retail Investments – RDR Adviser Deposit Protection: Raising Consumer Awareness
Consultation Paper Ref: CP 11/29
14th December 2011 4 pages
At the beginning of 2011 two key changes were made to strengthen compensation arrangements for deposits protected by the FSCS. First, the compensation limit for deposits increased to £85,000, and secondly faster payout mechanisms were introduced.
The proposal envisages requiring deposit takers to prominently display stickers and posters in branches and on websites (in electronic form), explaining their compensation arrangements. The aim of these proposals is to raise consumer awareness of deposit protection and its limits. In this Consultation Paper (CP) we are asking for feedback on these proposals..
Consultation period ends on 9th March 2012.
|UK Implementation of Amending Directive 2010/73/EU – Simplifying the EU Prospectus and Transparency Directives
Consultation Paper Ref: CP 11/28
13th December 2011 84 pages
Of interest to interest to issuers and their professional advisers and to investors. Also to clients.
On 31 December 2010, the Amending Directive 2010/73/EU came into force amending the Prospectus Directive (2003/71/EC) and Transparency Directive (2004/109/EC). The proposal envisages changes to the FSA’s Prospectus Rules, Listing Rules and Disclosure and Transparency Rules.
Consultation period ends on 13th March 2012.
|FSA Regulation of Credit Unions in Northern Ireland
Policy Statement Ref: PS 11/18
9th December 2011 162 pages
This Policy Statement reports on the main issues arising from Consultation Paper 11/17 (FSA Regulation of credit unions in Northern Ireland) and publishes near-final rules
|Authorised Professional Firms and Legal Services Reform: Feedback to CP11/13 and Final Rules
Policy Statement Ref: PS 11/17
9th December 2012 7 pages
This Policy Statement reports on the main issues arising from Consultation Paper 11/13 (Authorised professional firms and legal services reform) and publishes final rules
|Regulated Covered Bonds: Feedback on the Review of the UK Regulated Covered Bonds Regulatory Framework and Final Sourcebook Instrument
Policy Statement Ref: PS 11/16
9th December 2011 96 pages
This Policy Statement reports on the main issues arising from the Consultation Paper on proposals for the Review of the UK’s regulatory framework for covered bonds and publishes final Sourcebook Instrument
|Financial Crime: A Guide for firms
Policy Statement Ref: PS 11/15
9th December 2012 168 pages
This Policy Statement reports on the main issues arising from Consultation Paper 11/12 (Financial crime: a guide for firms) and publishes the final guide.
|Thematic Overview: Regulated Covered Bond Regime
Guidance Consultation Ref: GC 11/31
16th December 2011 4 pages
The key areas the guidance will cover are the scope and depth of engagement that the signatory of the annual confirmation of compliance (RCB 3 Annex 1D) has with the programme, the content of Management Information and the appropriateness of systems and controls.
Consultation period ended 27th January 2012
|Non Executive Directors Conference; Delivering Fair Treatment for Consumers of Financial Services
Guidance Consultation Ref: GC 11/30
9tht December 2011 11 pages
The guidance is to help NEDs understand better how to deliver against their regulatory responsibilities under the FSA Rules and Principles, from a retail conduct risk perspective, and what this looks like in practice.
In summary it recommends NEDs challenge whether:
Consultation period ends 3rd February 2012
|Proposed update to the distributor-influenced funds factsheets
Guidance Consultation Ref: GC 11/29
5th December 2011 8 pages
Of interest to distributors with their own range of distributor-influenced funds, or firms that run or help to run distributor-influenced funds for distributors, and product providers and platforms that include fund links to distributor-influenced funds.
The document aims to achieve a system whereby firms marketing these products put into place robust systems and controls to ensure that the use of these products is in the best interests of each client and does not simply increase complexity and costs without providing new services and good value for money.
Consultation period ended 30th January 2012
|Distribution of Retail Investments: RDR Adviser Charging – Treatment of Legacy Assets
Consultation Paper Ref: CP 11/26
16th November 2011 28 pages
Follows on from Consultation Paper CP 11/25, which dealt with Solvency II issues.
Consultation period ended on 16th January 2012.
Enhancing Frameworks in the Standardised Approach to Operational Risk – Policies and Documentation
Finalised Guidance Ref: FG 11/21
November 2011 20 pages
The latest in a series of papers intended to assist firms and supervisors in understanding, assessing and enhancing the adequacy and effectiveness of operational risk (OR) frameworks used by firms to implement the standardised approach (TSA) to OR.
|Thematic Feedback on the FSA’s
Reviews of the Regulated Covered
Finalised Guidance Ref: FG 11/20
November 2011 2 pages
Notes on good conduct. Sets out the following objectives:
|Distribution of Retail Investments – RDR Adviser Charging and Solvency II Disclosures
Consultation Paper Ref: CP 11/25
10th November 2011 45 pages
Of interest to firms advising on retail investment products and product providers, as well as consumers and consumer bodies. Chapter 4 will be of interest primarily to insurers.
The consultation deals with three matters of interest to IFAs: two of them relating to the FSA’s Adviser Charging rules (published in March 2010), and the third concerning the implementation of Solvency II disclosure requirements.
Consultation period ends on 10th January 2012.
|RDR – Accredited Bodies
Consultation Paper Ref: CP 11/24
10th November 2011 20 pages
A consultation on the proposal to confer FSA accredited body status on two applicants – the Institute of Chartered Accountants in England and Wales, and the Pensions Management Institute.
The proposal will enable advisers to decide which body they wish to approach to validate their qualification gap-fill (if required), and to issue their Statement of Professional Standing.
Consultation period ends on 9th December 2012.
|Solvency II and Linked Long-Term Insurance Business
Consultation Paper Ref: CP 11/23
9th November 2011 42 pages
Of relevance to consumers with linked long-term insurance policies, their advisers, and consumer groups.
The consultation paper presents proposals for changes to FSA rules and guidance relating to the operation of unit-linked and index-linked insurance business, primarily in the Conduct of Business Sourcebook (COBS) 21, Permitted Links. The proposed changes are intended to reform the current rules, so that they are consistent with the requirements of Solvency II.
Consultation period ends on 15th February 2012.
|Transposition of Solvency II – Part 1
Consultation Paper Ref: CP 11/22
6th November 2011 208 pages
Of primary interest to all insurance firms captured within the scope of Solvency II. It will also be of indirect interest to non-Directive firms, representative trade bodies, business advisers and consultants, and other financial advisers serving in or linked to the insurance industry.
This is the first of two consultation documents relating to the proposed changes involved in the Solvency II regime. Although primarily a European Union issue, involving the European Commission, the European Insurance and Occupational Pensions Authority and the FSA, it is also important in the context of the domestic regulatory reform to move to a twin peaks regime, split by prudential and conduct issues.
The FSA recommends that this document should be read in conjunction with the FSA’s Conduct CP11/23 which includes proposals on some of the limited requirements relating to conduct issues in Solvency II (specifically Chapter 10).
Consultation period ends on 15th February 2012.
|PS11/14: Product Disclosure: Retail Investments – Changes to Reflect RDR Adviser Charging – Feedback to CP11/3 and Final Rules
Policy Statement Ref: PS 11/14
8th November 2011 45 pages
Recommended changes to some aspects of the FSA rules on product disclosure, as part of the Retail Distribution Review (RDR). The FSA notes that retail products are often considered complex and opaque in terms of the way they work, and that customers will typically have little or no experience of the products, as they do not buy them regularly. Hence the need for tighter regulation.
For further details of this document, please see The Compliance Doctor article in this month’s IFA Magazine (Page XX)
|Data Collection: Retail Mediation Activities Return and complaints data – feedback to CP11/8 and final rules
Policy Statement Ref: PS 11/13
8th November 2011 75 pages
Proposed changes to the Retail Mediation Activities Return (RMAR) and complaints data, which will be of interest to both advisers and providers active in the retail investment and corporate pensions markets.
Consumers and consumer bodies are also expected to be interested in finding out how the FSA will use data to help it supervise and enforce the new Retail Distribution Review (RDR) regime and ensure that the new rules are properly implemented
|Strengthening Capital Standards 3 – Feedback and Final Rules for CRD3
Policy Statement Ref: PS 11/12
3rd November 2011 118 pages
Relevant to banks, building societies and certain investment firms caught by the Capital Requirements Directive (CRD) from the European Commission’s CRD3 package of amendments. It will also be of particular interest to those firms and their advisers.
Essentially, the statement concerns itself with the responses to questions in CP11/9. But it also contains finalised guidance on the Supervisory Formula Method (SFM) and Significant Risk Transfer (SRT) following the Guidance Consultation in May 2011.
The general background concerns the Basel Committee’s finding that the financial crisis had exposed gaps in the European CRD capital requirements for re-securitisations, and that risks arising from credit risk and illiquidity in the trading book had been underestimated. It aims, therefore, to correct the capital requirement levels for such positions in both the trading and non-trading book.
|Proposed Guidance on the Practice of ‘Payment for Retail Product Development and Governance – Structured Products Review
Guidance Consultation Ref: GC 11/27
2nd November 2011 50 pages
Of interest to firms involved in the manufacture of structured products. Much of the guidance may also be relevant to a wider population of firms, involved in the manufacture of other retail products.
The FSA feels that, although structured products are rising in popularity, the growing number of structured product sales, as well as increasing product complexity, is placing a strain on firms’ systems and controls. A lack of robustness in a firm’s product development and marketing processes can increase the risk of poorly designed products and lead to mis-selling or mis-buying by consumers, the regulator says.
The proposed guidance says that firms should:
Consultation period ends 11th January 2012
|Payment Protection Products
Guidance Consultation Ref: GC 11/26
1st November 2011 32 pages
The proposal seeks to limit the proliferation of products with properties similar to Payment Protection Insurance (PPI), which has been curtailed during the last year after many abuses. The FSA is aware that some firms are developing new forms of protection that aim to meet similar consumer needs, which it feels may pose similar risks to PPIs.
The document sets out risks which may arise in the design of payment protection products. In particular, the risks around:
It discusses ways of managing these risks, both through firms’ distribution and marketing strategies and through their governance arrangements.
Consultation period ends 13h January 2012
|Guidance on the Selling of General Insurance Policies Through Price Comparison Websites
Finalised Guidance Ref: FG 11/17
October 2011 10 pages
The guidance results from an FSA study of how firms which sell regulated insurance products and services online have developed their business models, and how they are designing these models to ensure the fair treatment of consumers.
Issues considered included the provision of ‘white labelled’ comparison websites where the host firm uses in its own business a price comparison tool provided by a third party. These considerations raised concerns in three particular areas:
|‘Dear CEO’ Letters Providing Guidance on Issues Relating to Remuneration
Finalised Guidance Ref: FG 11/16
October 2011 30 pages
These letters set out how the FSA intends to assess firms’ implementation of the Remuneration Code for the coming year.
The letters also contain guidance on:
Different letters and templates are provided for firms in proportionality tiers 1 to 4
|Regulatory fees and levies: Policy Proposals for 2012/13
Consultation Paper Ref: CP 11/21
28th October 2011 86 pages
Annual consultation on fees and levies for 2012/2013. The final consolidated Policy Statement is due in May 2012.
Consultation period ends on 6th January 2012.(Chapter 2, 6th February 2012)
|Packaged Bank Accounts: New ICOBS Rules for the Sale of Non-Investment Insurance Contracts
Consultation Paper Ref: CP 11/20
27th October 2011 38 pages
Of interest to firms selling insurance as part of a packaged bank account, insurers, and retail intermediary firms selling general insurance products. The consultation concerns a proposal for tightening up the regulations for firms selling insurance as part of packaged accounts.
Consultation period ends on 27th January 2012.
|Finalised Guidance: Forbearance and Impairment Provisions -’Mortgages’
Finalised Guidance Ref: FG 11/15
October 2011 41 pages
Of interest to residential mortgage lenders or mortgage administrators, and to
managements responsible for any aspect of forbearance activities, credit-risk reporting, finance, audit and the compliance functions of firms.
The guidance provided in this document covers:
|Financial Resources Requirements for Recognised Bodies
Consultation Paper Ref: CP 11/19
5th October 2011 61 pages
Proposals for revised principles to be taken into account by the FSA when determining whether the Recognition Requirement has been satisfied.
The changes to the FSA’s Recognised Investment Exchange and Clearing House Sourcebook (REC, section 2.3) take account of the changing shape of various financial instruments during the last nine years, and aim to bring them all satisfactorily within the regulatory terms of the Markets in Financial Instruments Directive (MiFID) and similar measures.
Consultation period ends on 6th January 2012.
|Use of non-EEA Rules in Calculating Group Capital Requirements – Feedback on CP11/6 and Final Rules
Policy Statement Ref: PS 11/11
26th September 2011 25 pages
Relevant to banks, building societies and BIPRU investment firms that are part of UK consolidation groups which may have subsidiaries in jurisdictions outside the European Economic Area (EEA).
The Policy Statement reports on the main issues arising from Consultation Paper 11/6 (Use of non-EEA rules in calculating group capital requirements, March 2011), and it publishes final rules.
The revisions follow on from an internal FSA review of the equivalence rules, with regard to the continuing validity of the equivalence approach as a whole in the context of group capital requirements. The review led to a proposal in CP11/6, to revoke the equivalence rules by deleting BIPRU 8.7.35R, 8.7.36G and 8.7.38R from the FSA Handbook.
This will mean that, for the purpose of calculating the consolidated capital requirements of a UK consolidation group, firms will use the FSA rules rather than local (i.e. non-EEA) rules in calculating the capital requirements of the non-EEA subsidiary.
|Proposed Guidance on the Practice of ‘Payment for Order Flow’
Guidance Consultation Ref: GC 11/23
12th October 2011 10 pages
Of interest to brokers executing client orders, and also market makers.
The proposal seeks to regulate the use of ‘payment for order flow’ (PFOF) – meaning an arrangement whereby a broker receives payment from market makers, in exchange for directing order flow to them. The FSA takes the view that PFOF arrangements create a clear conflict of interest between the firms’ clients and the firm itself, so that it is unlikely to be compatible with the FSA’s inducement rules and risks compromising compliance with best execution rules.
The key element of the reforms is a requirement that brokers receiving these payments must declare them to clients, and that they must be able to prove that they are (a) cost-effective and (b) consistent with the client’s best interests.
Consultation period ends 9th November
Guidance Consultation Ref: GC 11/22
15th September 2011 27 pages
Of interest to Firms who wish to offer a simplified advice service, and trade associations who are working with their members in this area.
The paper provides additional guidance on simplified advice processes which are now being piloted by various firms, aims to address the issues they have faced. It also provides guidance on certain aspects of the regulatory regime suitability, adviser charging and service disclosure.
Furthermore, it contains general guidance on professional standards, designing and delivering a simplified advice process, and choosing an appropriate product suite.
Consultation period ends 15th November
|Transactions on Turquoise Derivatives and Derivative Markets Where Reference Data is Unavailable
Guidance Consultation Ref: GC 11/21
8th September 2011 2 pages
Of interest to authorised firms with transaction reporting responsibilities, particularly those trading in derivatives.
The document contains proposed guidance on transaction reporting for transactions on Turquoise Derivatives and derivative transactions conducted through clearing platforms of derivative markets where the reference data for these transactions is not made available to the FSA and ARMs.
Consultation period ended 22nd September
|Quarterly Consultation Paper No.30
Consultation Paper Ref: CP 11/18
7th September 2011 102 pages
Various proposed changes, including amendments to the SYSC Sourcebook, the Training and Competence Sourcebook, liquidity rules in the Prudential sourcebook for BIPRU firms, the Collective Investment Schemes sourcebook, Perimeter Guidance manual, and Disclosure and Transparency Rules.
Consultation period ends on 6th October for Chapters 3 and 9; 20th October for Chapter 2; 6th November for other Chapters.
|Transposition of the Revised UCITS Directive
Policy Statement Ref: PS 11/10
2nd September 2011 295 pages
This Policy Statement reports on the main issues arising from the joint HM Treasury/FSA paper (Transposition of UCITS IV: consultation document) of December 2010 and publishes final rules. The driving issues, the FSA says, are that:
|Reporting Transactions in Derivatives Conducted Through Clearing Platforms of Derivative Markets
Finalised Guidance Ref: FG 11/12
September 2011 10 pages
Guidance applies only to transactions in derivatives conducted through
clearing platforms of ISIN derivative markets or of Aii derivative markets. This guidance will be effective from 31 March 2012. However, firms wishing to comply with guidance before this date may do so.
All the remaining transactions in derivatives executed on an ISIN derivative market (eg transactions in derivatives executed on the order book) continue to be reportable under SUP 17.1.4 (1) as currently.
All transactions in derivative instruments executed on the order book of an Aii derivative market are required to be reported from 13 November 2011.
|FSA Regulation of Credit Unions in Northern Ireland
Consultation Paper Ref: CP 11/17
31st August 2011 229 pages
Primarily intended for members, advisers and volunteers associated with credit unions in Northern Ireland.
An updated version of the dedicated section of the FSA Handbook of rules and guidance CRED, to be called CREDS, is due to apply by the time the transfer of regulation of credit unions in Northern Ireland takes place on 31 March 2012.
This Consultation Paper proposes a single regulatory regime which will apply, as far as is possible, the new CREDS rules to credit unions in Northern Ireland. However, it will not be possible to apply CREDS in its entirety and the FSA proposes tailoring the rules to reflect remaining legislative differences between Northern Ireland and Great Britain.
Consultation period ended on 31st October
|Top Questions Asked at the Retail Distribution Review (RDR) Roadshows
Guidance Consultation Ref: GC 11/20
25th August 2011 3 pages
A list of FAQs that arose during the FSA’s recent RDR roadshows, relating to questions about the changes and about what firms are required to do.
Consultation period ended 26th September
|Recovery and Resolution Plans
Consultation Paper Ref: CP 11/16
9th August 2011 78 pages
Primarily intended for banks, building societies and insurers.
This Paper covers the proposed requirement for certain financial services firms to prepare and maintain Recovery and Resolution Plans (RRPs) and separately, for some of these firms, and others, to make additional preparations in relation to their investment client money and custody assets (CMA) holdings.
Recovery Plans require firms to identify options to recover financial strength and viability should a firm come under severe stress. Resolution planning requires firms to submit detailed information about their business and operational structure in the form of a Resolution Pack.
Consultation period ends on 9th November
Remuneration Code (SYSC 19A)
Contains self-assessment templates for Tier 2, 3 and 4 firms, and also various information sheets on frequently asked questions
|Proposed ‘Dear CEO’ Letters Providing Guidance on Issues Relating to Remuneration
Guidance Consultation Ref: GC 11/19
5th August 2011 10 pages
Of interest to FSA-authorised banks, building societies and Capital Adequacy Directive (CAD) investment firms. (This generally corresponds to firms subject to MiFID, although exempt CAD firms are not included.)
The revised Remuneration Code came into force on 1 January 2011, implementing the rules on remuneration contained in the EU Capital Requirements Directive (CRD3). These proposed ‘Dear CEO’ letters set out our plans for monitoring implementation of the Code during the coming remuneration round. An annexe alsocontains proposed guidance for consultation on certain policy issues.
Policy Statement Ref: PS 11/09
1st August 2011 73 pages
This Policy Statement reports on the main issues arising from Consultation Paper 10/29 (Delivering the RDR and other issues for platforms and nominee-related services) and publishes final rules.
|Client Assets Sourcebook
Consultation Paper Ref: CP 11/15
29th July 2011 42 pages
The document aims to seek views on the FSA’s proposals to amend
the Client Assets Sourcebook (CASS). It covers two main topics:
Custody liens policy is being revised in the light of the 2008 banking crisis. Proposals have already been consulted upon in CP10/9, and rules were subsequently published in PS10/16. But one of the proposals included in CP10/9 involved prohibiting firms from granting inappropriate general liens over their clients’ assets and client money derived from those assets. A transitional period is due to expire on 1st October 2011, and interim arrangements need to be tidied up.
Title transfer collateral arrangements (TTCA) are also being amended, in line with the Consultation Paper (CP10/15) issued in July 2010.
Consultation period ended on 28th October
|Auctioning of Greenhouse Gas Emission Allowances
Consultation Paper Ref: CP 11/14
25th July 2011 68 pages
The document proposes changes to the Handbook which complement the Treasury’s implementation of a new regulatory regime for platforms that will conduct auctions in emission allowances. The new regime is being put in place ahead of the start of EU procurement processes to select both a common EU auction platform and one or more national auction platforms.
Consultation period ended on 25th September
|Proposed Guidance on Liquidity Swaps
Guidance Consultation Ref: GC 11/18
21st July 2011 23 pages
Market conditions have prompted banks to seek to diversify sources of liquidity. In particular, the FSA says it has observed an increasing trend of banks seeking to access liquidity embedded within asset portfolios held by insurers by entering into various transactions which we collectively refer to as “liquidity swaps”. This guidance consultation has arisen as a response to these developments.
Key issues include:
Consultation period ended 21st September
|The Prudential Regime for Trading Activities
Discussion Paper Ref: FS 11/4
14th July 2011 40 pages
Reports on Feedback to Discussion Paper DP 10/4 (The prudential regime for trading activities – a fundamental review) from August 2010.
The review focuses on the prudential requirements for banks and investment firms that engage in trading activities, with particular regard to the Fundamental Review of the trading book regime which the Basel Committee on Banking Supervision (BCBS) is developing.
The BCBS study centres on a range of amendments to the Basel II market risk framework, targeting specific weaknesses that were highlighted by the financial crisis of 2008. On average, these changes will increase the capital held against trading activities in large banks to between two and three times current levels.
|Enhancing Frameworks in the Standardised Approach (TSA) to Operational Risk – Policies and Documentation
Guidance Consultation Ref: GC 11/17
13th July 2011 18 pages
The paper recommends that firms meet the requirement of a ‘use test’ for documentation, i.e. ensure that it works thanks to its quality, the fact it is regularly reviewed, communicated, well-understood and actually used by relevant staff.
Although the paper is not prescriptive, it insists that documentation needs should evolve with the firm’s business and reflect any changes in the firm’s environment.
Consultation period closed 10th August
|FSA Reviews of Credit Risk Management by Central Counterparties
Guidance Consultation Ref: GC 11/16
11th July 2011 10 pages
The purpose of this consultation paper is to seek views on the process and scope of review the FSA undertakes when assessing the adequacy of the counterparty credit risk management framework within a central counterparty.
Consultation period closed 10th August
|Proposed Guidance on Financial Promotions – Prominence
Guidance Consultation Ref: GC 11/15
8th July 2011 8 pages
Clarification for firms on the manner in which the features of financial promotions may be presented, so as to achieve an adequate balance of the features as perceived by the client. Interest rates, fees, charges, relevant risk statements and other key product information are all covered by this clarification.
|Proposed Guidance on ‘Buy Out’ Awards to New Staff
Guidance Consultation Ref: GC 11/14
7th July 2011 2 pages
The proposed guidance clarifies the provision of the FSA’s Remuneration Code on the question of when firms may offer ‘buy out’ awards to new staff (i.e. awards to compensate a new hire for the outstanding deferred remuneration that he/she has forfeited by joining the firm).
|Authorised Professional Firms and Legal Services Reform
Consultation Paper Ref: CP 11/13
1st July 2011 45 pages
Of interest to IFAs, consumers and consumer rights groups
From October 2011, the Legal Services Act 2007 establishes ‘alternative business structures’ in England and Wales which leave some uncertainty as to how the financial services activities of FSA-authorised alternative business structures will be regulated.
The proposed measure extends a modified form of regulation to these services, thus closing a potential gap.
Consultation period ended on 12th August
|Financial Crime: a Guide for Firms
Consultation Paper Ref: CP 11/12
22nd June 2011 137 pages
Of interest to IFAs but not, primarily, consumers
The document contains guidance, in the form of self-assessment questions and examples of good and poor practice, which firms can use to assess and improve their existing approaches to meeting their legal and regulatory obligations in relation to financial crime.
Consultation period closes on 21st September
|Product Intervention Feedback Statement
Discussion Paper Ref: FS 11/3
14th June 2011 65 pages
Reports on the Product Intervention discussion paper (DP), published on 25 January. The original paper proposed a new direction for retail financial services regulation, moving away from an approach largely focused on point-of-sale, to one that actively regulates all aspects of the product life cycle, including the design, development and management of products.
|Proposed Guidance on the Selling of General Insurance Policies Through Price Comparison Websites
Guidance Consultation Ref: GC 11/13
8th June 2011 11 pages
Clarification for firms on the relevant need to:
|Code of Practice for the Relationship Between the External Auditor and the Supervisor
Finalised Guidance Ref: FG 11/09
May 2011 6 pages
The Code sets out principles that establish, in the context of a particular regulated firm:
The aim and focus of the Code is to enhance the regulatory process and contribute to high-quality external auditing by promoting an effective relationship between the auditor and supervisor in the context of a particular regulated firm.
|Pension Reform – Conduct of Business Changes
Policy Statement Ref: PS 11/08
28th May 2011 33 pages
This Policy Statement reports on the main issues arising from Consultation Paper 10/26 (Pension reform – Conduct of business changes) and publishes final rules
Relevant to pension providers, advisers, consumer groups and professional bodies. The proposals in this paper will affect consumers who have a pension now, expect to make contributions to a pension in the future, or who will be automatically enrolled into workplace personal pensions from 2012.
This Policy Statement discusses the responses received to CP10/26 and includes final rules.
New provisions and guidance come into effect on 1st October 2012
|Consolidated Policy Statement on FSA Fee-Raising Arrangements and Regulatory Fees and Levies
Policy Statement Ref: PS 11/07
27th May 2011 236 pages
This Consolidated Policy Statement (PS) summarises the FSA’s policy with regard to its fee-raising powers under the Financial Services and Markets Act 2000
|The Client Money and Asset Return (CMAR): Operational Implementation
Policy Statement Ref: PS 11/06
27th May 2011 38 pages
This Policy Statement reports on the main issues arising from our proposals on implementing CMAR on GABRIEL for CASS medium and large firms in Consultation Paper 11/4 (The Client Money and Asset Return (CMAR): Operational Implementation) and publishes final rules.
Of interest to:
• all CASS firms;
• consumers; and
• individuals who may have senior management responsibilities in relation to a regulated firm’s client money and assets.
Note: the CMAR regime will come into effect from 1 October, rather than 1 June, as previously indicated
| Consumer Complaints: The Ombudsman Award Limit and Changes to Complaints-Handling Rules
Consultation Paper Ref: CP 11/10
28th May 2011 68 pages
Of interest to consumers and consumer representatives, and to all firms involved in retail financial services markets, where their customers are eligible to complain to the ombudsman service. Some applications to non-regulated firms and organisations.
This paper contains final policy, rules and guidance, and consults on a proposed change to the definition of ‘eligible complainant’ in response to feedback received to CP10/21.
It also contains guidance and rulings on remuneration to the ombudsman, and on tighter complaints handling procedures generally.
Consultation period closes on 31st August
|Proposed Guidance on the Supervisory Formula Method and Significant Risk Transfer
Guidance Consultation Ref: GC 11/12
25th May 2011 4 pages
Mainly for BIPRU firms who undertake securitisation as an originator or sponsor:
Guidance aims to set out the FSA’s expectations on firms using the Supervisory Formula Method (SFM) to calculate risk-weighted exposure amounts (RWEA) for unrated securitisation positions. This arises from ‘significant concern’ that firms’ use of the SFM undermines the significant risk transfer requirement with the reduction in RWEAs, due to the use of the SFM being disproportionate to the credit risk transferred.
Consultation period closed 21st June
|Proposed Guidance on Reporting Derivative Transactions Conducted Through Derivative Exchange Platforms
Guidance Consultation Ref: GC 11/11
25th May 2011 3 pages
Mainly for Firms that deal in on-exchange derivatives
Guidance aims to:
Consultation period closed 2nd June
|Strengthening Capital Standards 3 – Further Consultation on CRD3
Consultation Paper Ref: CP 11/09
11th May 2011 164 pages
Intended mainly for banks, building societies and certain investment firms caught by the Capital Requirements Directive. The CRD charges do not, on the whole, apply to smaller businesses.
The paper discusses the implications of the Basel Committee on Banking Supervision’s decision to increase the risk capture and level of capital requirements in the trading book, and also credit risk and illiquidity in the trading book. The CRD changes implement these requirements in Europe and will result in higher market risk capital under both the internal models methods and standardised rules.
The ongoing CRD4 discussions will implement Basel III amendments, and will include liquidity standards; definition of capital; leverage ratios; capital buffers; counterparty credit risk; and a single rule book for banking.
Most of the proposed changes will come into effect on 31 December 2011 and firms within the scope of the CRD will need to be compliant at that date. Firms falling under the scope of the CRD it will need to ensure that their systems and finances are ready in advance of the changes.
Consultation period ends 11th June
|Data Collection: Retail Mediation Activities Return and Complaints Data
Consultation Paper Ref: CP 11/08
10th May 2011 69 pages
Relevant to both advisers and providers active in the retail investment and corporate pensions markets, and relating to the proposed changes to the Retail Mediation Activities Return (RMAR) and complaints data.
The paper explores the data storage and usage implications of RDR, which will require IFAs to conduct much more intensive data collection in the context of mitigating the risk of poor consumer outcomes.
Consultation period ends 8th July
|Forbearance and Impairment Provisions – ‘Mortgages’
Guidance Consultation Ref: GC 11/10
3rd May 2011 38 pages
Mainly for residential mortgage lenders or mortgage administrators. Issues include:
|Remuneration Code (SYSC 19A)
Guidance Consultation Ref: GC 11/09
20th April 2011
Mainly for banks, building societies, capital adequacy directive investment firms
The Remuneration Code (the Code) was revised to implement the requirements of the third Capital Requirements Directive (CRD3) and came into force on 1 January 2011. The revised Code covers a wide variety of firms, including investment banks, retail banks, building societies, asset management firms, stockbrokers, corporate finance firms and multi-lateral trading facilities.
Consultation period ended 18th May
|Use of Non-EEA Rules in Calculating Group Capital Requirements
Consultation Paper Ref: CP 11/056
31st March 2011 29 pages
Sets out proposals for removing the rules permitting the use of non-EEA regulators’ rules in calculating the group capital requirements of a UK banking/investment firm group on a standardised approach.
The principle under discussion is that, now that all EEA competent authorities have implemented similar standards with regard to the Capital Requirements Directive (CRD), there is no longer a case for using non-EEA equivalence rules when calculating the standardised requirements of a non-EEA subsidiary. The proposal would involve revoking the equivalence rules in BIPRU 8, by deleting BIPRU 8.7.35R, 8.7.36G and 8.7.38R from the FSA Handbook.
Consultation period ends 30th June
|Consumer Complaints (Emerging Risks and Mass Claims): Feedback on DP10/1
Discussion Paper Ref: FS 11/02
28th March 2011 24 pages
Summary of the feedback on DP10/1 (January 2010), relating to proposals for improving the handling of consumer complaints. With specific reference to the Treasury’s July 2009 White Paper, Reforming Financial Markets, following which the FSA proposed a new Coordination Committee of the FSA, OFT and the ombudsman service that would meet regularly and draw together members of their executive teams.
To be followed by a tightening of the liaison with the Claims Management
Regulator (CMR), including the enhanced sharing of intelligence.
|Auditor’s Client Assets Report
Policy Statement Ref: PS 11/05
25th March 2011 50 pages
Conclusion and final rules resulting from Consultation Paper 10/20: Tracing employers’ liability insurers. Primarily intended for auditors and their client companies. Primarily concerning the need for tighter controls on auditors’ reporting of client companies’ asset declarations, and the need to clarify accountability.
New rules come into force on 1st June 2011, although a transition period until 29th September is allowed for.
|Enhancing the Auditor’s Contribution to Prudential Regulation: Feedback on DP10/3
Discussion Paper Ref: FS 11/01
10th March 2011 55 pages
Summary of the feedback on DP10/3 (June 2010), relating to
the contribution that auditors make to prudential regulation.
Key areas of interest include:
|Assessing Suitability: Establishing the Risk a Customer is Willing and Able to Take, and Making a Suitable Investment Selection
Finalised Guidance Ref: FG 11/05
March 2011 31 pages
Consolidation of guidance following Guidance Consultation 11/01
(13th January 2011). Intended for IFAs, discretionary management services (retail clients only), providers of risk-profiling and asset-allocation tools.
Governance in Retail Firms – Feedback from Winter 2010 seminars
Finalised Guidance Ref: FG 11/04
March 2011 3 pages
|Tracing Employers’ Liability Insurers
Policy Statement Ref: PS 11/04
25th February 2011 68 pages
Conclusion and final rules resulting from Consultation Paper 10/13: Tracing employers’ liability insurers. Primarily for insurance industry professionals.
New rules came into force on 6th March 2011.
|Decision Procedure and Penalties Manual and Enforcement Guide Review
Policy Statement Ref PS11/03
25th February 2011 52 pages
Concluding the consideration of issues arising from Consultation Paper 10/23: Decision Procedure and Penalties manual and Enforcement Guide review 2010.
The Policy Statement includes final amendments to the Glossary, the General Provisions module, the Decision Procedure and Penalties manual and the Enforcement Guide
|Protecting With-Profits Policyholders
Discussion Paper Ref: CP 11/05
24th February 2011 99 pages
Intended for all providers of with-profits policies, but also for consumers and their advisers.
The paper discusses issues including:
|Pension Obligation Risk and ICAS / ICAAP
Guidance Consultation Ref: GC 11/06
14th February 2011
Primarily for banks and building societies, insurers and investment firms. Clarification and updates relating to Section 1.2 of the General Prudential Sourcebook.
|Reverse Stress-Testing: Frequently Asked Questions
Guidance Consultation Ref: GC 11/06
14th February 2011
Mainly for BIPRU firms, insurers and investment firms. Topics covered include:
|The Client Money and Asset Return (CMAR): Operational Implementation
Consultation Paper Ref: CP 11/04
10th February 2011 74 pages
Proposals on how firms should report the new Client Money and Asset Return (CMAR). Principally for:
(Policy Statements to follow in May 2011; New rules will
enter into force on 1 June 2011.)
Comments period ended 10th April
Discussion Paper Ref: DP 11/01
10th February 2011 75 pages
Consultation on ways in which the FSA can continue to tighten up its self-described ‘more interventionist approach’, aimed at anticipating consumer detriment and stopping it before it occurs.
Key themes include:
Reducing consumer detriment by dealing with problems earlier
The report discusses a range of future interventions that could be introduced in areas where the potential for customer harm is greatest.
Comments period ended 21st April
|Product disclosure: Retail Investments – Changes to Reflect RDR Adviser Charging and to Improve Pension Scheme Disclosure
Consultation Paper Ref: CP 11/03
2nd February 2011 74 pages
Mainly of interest to pension scheme or SIPP providers, pension advisers and other product providers.
Detailed implementation of RDR proposals. Specifically:
Comments period ends 3rd May
|Regulatory Fees and Levies: – Rates proposals 2011/12
Consultation Paper Ref: CP 11/02
1st February 2011 182 pages
FSA Funding requirement for 2011/12 is up by 10.1% to £500.5 mn. But because of additional revenue from heavier fines, subscriptions and fees are to be 2% lower.
The FSA says it estimates that there will be substantial indirect costs as staff reschedule other work to create the capacity needed to implement the impending structural changes. Smaller IFAs will be more affected than larger ones.
Comments period for various sections ended 1st April
|Distribution of Retail Investments: Delivering the RDR – Professionalism
Policy Statement Ref: PS 11/01
20th January 2011 126 pages
Following on from Consultation Papers CP10/14, CP09/18 and CP09/31 and CP10. Includes final rules.
Qualifying conditions for IFAs stipulate that:
Some of the professionalism rules will come into force in July 2011, after which firms will be obliged to notify the FSA if any adviser falls below the required standards of competence or ethical behaviour.
Guidance Consultation Ref: Guidance 11/02
13th January 2011 6 pages
Proposed guidelines on clarity, mainly for fund managers and advertisers
Consultation period ended 25th February.
|Proposed Guidance on Survey Report of Derivative Risk Management Practices
Guidance Consultation Ref: Guidance 10/07
6th December 2010 19 pages
Based on a survey which addressed inconsistencies in the ways that fund managers handle and evaluate derivative risks.
|Proposed Guidance on Assessing Suitability
Guidance Consultation Ref: Guidance 11/01
13th January 2011 25 pages
Establishing the risk a customer is willing and able to take, and making a suitable investment selection
Intended for IFAs, discretionary management services (retail clients only), providers of risk-profiling and asset-allocation tools.
|Quarterly Consultation Paper No 27
Consultation Paper Ref: CP 11/01
6th January 2011
10 topics, including:
Comments period ended 17th February
|Revising the Remuneration Code and implementing CRD requirements on the disclosure of remuneration.
Policy Statement Ref: PS 10/21 and PS 10/21
17th December 2010 55 pages
Feedback on CP10/27 and final rules
|Strengthening Capital Standards 3
Policy Statement Ref: PS 10/19
17th December 2010 51 pages
Feedback and final rules arising from CP10/17 (chapters 11-13) and CP10/22 (chapter 3).
|Platforms: Delivering the RDR and other issues for platforms and nominee-related services
Consultation Paper Ref: CP 10/29
17th November 2010 87 pages
Consultation period ended 17th February.
|Mortgage Market Review: Distribution & Disclosure
Consultation Paper Ref: CP 10/28
16th November 2010
Developing the FSA’s existing themes on responsible mortgage lending, and placing the onus on the lender to assess the customer’s ability to can afford a mortgage.
Consultation period ended 25th February
|The Prudential Regime for Trading Activities – a Fundamental Review
Discussion Paper Ref: DP 10/4
16th November 2010 126 pages
Response to the Turner Review’s findings after the 2008 crisis. The paper addresses perceived failings in the efficient market theory, and proposes regulatory changes for banks and traders.
Response period ended 26th November.