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Key Regulatory Topics: Weekly Update 3 - 8 April 2020

17 April 2020

Our weekly update on key regulatory topics affecting the financial services sector. If you would like to receive this update by email and be added to our marketing mailing list please contact regulatorychange@allenovery.com.


Capital markets

Additional FCA measures to aid listed companies to raise new share capital – Covid-19

On 8 April, the FCA announced a series of measures to assist companies that are turning to capital markets to raise new funding, while retaining an appropriate degree of investor protection. The package includes a combination of temporary policy interventions and reminders of some existing options for companies and their current and prospective shareholders. The FCA, among other things: (i) provides clarity on its expectations about the due diligence supporting ‘working capital statements’ in share prospectuses given the significant economic uncertainties caused by coronavirus; (ii) highlights the ability to apply to the FCA for waivers to ensure that shareholder approval can be sought for certain transactions without the need to hold a general meeting given government guidelines on social distancing; and (iii) encourages eligible companies to make use of the new simplified prospectus, introduced by the Prospectus Regulation last year, which removes the need to include information such as organisational structure, capital resources, remuneration and benefits, and board practices. The guidance will apply from 8 April.
Press release
Statement of Policy

EC consults on draft implementing decision on the equivalence of Japan’s legal and supervisory framework for its benchmarks 

On 6 April, the EC published a draft implementing decision for consultation, specifically on equivalence of the legal and supervisory framework applicable to benchmarks in Japan. The EC states that benchmarks such as the Japanese Yen TIBOR and Euroyen TIBOR are administered in Japan and used in the Union by a member of supervised entities, and therefore it has undertaken an assessment of the benchmark regime in Japan. The EC determined that the legal and supervisory framework of Japan applicable to its benchmarks is equivalent to the requirements laid down in the Benchmarks Regulation. The deadline for comments is 4 May.
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Client asset protection

FCA advice on client assets and Covid-19

On 6 April, on a new webpage, the FCA summarised some of the queries they have received in relation to compliance with the client asset regime (CASS) and their position on the relevant issues, which include amongst others: (i) firms have noted that cheques are being delivered to unmanned offices and remaining unbanked - the FCA expect firms to consider potential harm caused by not being able to cash the cheque on a case-by-case basis as well as highlighting the relevant CASS requirements; (ii) firms are concerned costs of CASS audit reports will increase due to additional breaches caused by the current situation – the FCA notes that CASS auditors usually group multiple breaches in their reports, avoiding the need for extensive repetition and additional cost; (iii) if an audit firm is not able to submit a particular CASS audit report to the FCA within the 4-month deadline it should follow the ‘late reporting’ rules in SUP; (iv) where there are logistical difficulties in relation to the requirement to reconcile physical safe custody assets, arising from coronavirus, the FCA expect firms to take such mitigatory steps as are possible in the circumstances, to ensure that clients assets remain protected; and (v) despite some firms, subject to CASS 7, noting that an increase in client money holdings may lead to some operational challenges in terms of meeting segregation and diversification requirements, the FCA expects firms to continue to follow the rules on diversifying holdings.
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Conduct

FCA statement on SM&CR and Covid-19: our expectations of solo-regulated firms

On 3 April, the FCA set out its expectations to help solo-regulated firms apply the SM&CR. The FCA does not require firms to have a single Senior Manager responsible for their coronavirus response, instead allocating these responsibilities in the way which best enables them to manage the risks they face. The FCA does not intend to enforce the requirement on firms to submit updated Statements of Responsibilities (SoRs), if the change is: (i) made to cover multiple sicknesses, or other temporary changes in responsibilities in direct response to the pandemic, and (ii) is temporary and expected to revert to the firm’s previous arrangements. However, the FCA does expect allocations (however temporary) to be clearly documented internally, so that everyone understands who is responsible for what. The FCA will, if notified by firms, extend the 12-week rule allowing cover for a Senior Manager without being approved to up to 36 weeks. The FCA also explains its approach to furloughed Senior Managers and that firms should reallocate any Prescribed Responsibilities of a furloughed Senior Manager to one that has not been furloughed. Individuals performing required functions should be furloughed as a last resort and their responsibilities must continue to be covered.
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Joint FCA and PRA statement on SM&CR and Covid-19: our expectations of dual-regulated firms

On 3 April, the PRA and FCA jointly published a statement on the impact of Covid-19 on SM&CR setting out their expectations of dual-regulated firms. With regard to Statements of Responsibilities (SoRs), required for any significant changes to senior management functions (SMFs), the PRA and FCA expect firms to resubmit relevant SoRs as soon as reasonably practicable, and understand that firms may take longer than usual to submit revised SoRs in the present environment. The PRA and FCA are currently gathering evidence on whether the 12-week rule, allowing individuals to perform an SMF without approval, is likely to give regulated firms enough flexibility to deal with temporary absences of SMF as a result of coronavirus. In normal circumstances, if an SMF becomes temporarily vacant, firms should reallocate those SMFs' prescribed responsibilities (PRs) among their remaining SMFs until a permanent replacement is identified and approved. Where possible, this remains the preferred option however, if firms cannot reallocate an absent SMF's PRs due to Covid-19, they can temporarily allocate them to the individual who is acting as interim SMF under the 12-week rule, even if they are, at the time, unapproved as an SMF. The PRA and FCA do not require or expect firms to designate a single SMF to be responsible for all aspects of their response to Covid-19. The statement also contains the PRA's and FCA's expectations as to furloughing SMFs, requiring an individual to be performing the mandatory SMFs at all times. Firms should update their PRA and FCA supervisors of any furloughing of one or more SMFs by emailing or calling them.
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Covid-19

Please see the other sections for product specific updates relating to Covid-19.

Please see our dedicated Covid-19 webpage containing links to a number of articles and insights to keep up-to-date with developments and assist with effective contingency planning.

Please see the FCA's webpage providing information for firms regarding its Covid-19 response which is updated on a regular basis.

IOSCO reprioritises work programme to address impact of Covid-19

On 8 April, IOSCO announced that it would pause or delay some of its work in 2020 in order to redirect its resources to focus on the multiple challenges securities markets regulators are addressing as a result of the Covid-19 crisis. Among other things, substantial resources are being redirected to addressing areas of market-based finance which are most exposed to heightened volatility, constrained liquidity and the potential for pro-cyclicality including the examination of investment funds, as well as margin and other risk management aspects of central clearing for financial derivatives and other securities. The work being delayed or paused includes IOSCO’s analysis of the use of Artificial Intelligence and Machine Learning by market intermediaries and asset managers, the impact of the growth of passive investing and potential conduct-related issues in index provision, issues around market data, outsourcing and implementation monitoring. However, IOSCO will continue to proceed with its work on good practices for deference, as well as other projects that are near completion and will not burden limited resources.
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FCA postpones commencement date of new rules on investment pathways and platform switching – Covid-19

On 7 April, the FCA published the COVID-19: Deferral of Commencement (Pension Transfers, Investment Pathways, Platform Switching, Access to Insurance) Instrument 2020, which came into force on 6 April. It postpones the commencement dates of the following, amongst others: (i) the Conduct of Business Sourcebook (Investment Pathways) Instrument 2019 (FCA 2019/83); and (ii) the Conduct of Business Sourcebook (Platform Switching) Instrument 2019 (FCA 2019/103). The FCA explains on related webpages that it has revised the implementation dates of the rules in these instruments (except those measures already in force) by 6 months until 1 February 2021.The FCA believes that the benefit to consumers from firms dedicating resources to dealing with critical functions in the short-term may outweigh the harm from delaying implementation of these policies.
Covid-19: Deferral of Commencement (Pension Transfers, Investment Pathways, Platform Switching, Access to Insurance) Instrument 2020
Platform switching webpage
Investment pathways webpage

FCA advice on messages firms can give customers regarding investments and life assurance – Covid-19

On 7 April, the FCA in a new webpage explained how firms can avoid straying into making personal recommendations when bringing out the implications for customers of realising their investments or cancelling life assurance. The FCA suggests, should a customer be willing to surrender an investment despite the losses involved, that firms ask customers for information to understand the rationale behind the request and remind them of general factors to consider. The FCA reminds firms of the rules in COBS and Principles 6 and 7. The FCA explains that communications to ensure the customer is making an informed decision, but do not guide them towards a particular investment strategy, fall short of amounting to a personal recommendation – it provides various examples of messages to illustrate this. Should customers request more support the FCA advises that firms should try to help their customers where possible by prompting them to consider relevant options, and warn of any downsides. However, the FCA explains, firms should be careful not to provide regulated advice, even implicitly, by steering the customer to a specific course of action on their investments, unless they are willing to comply with the conduct requirements concerning personal recommendations. The FOS has confirmed that this note will be taken into account if a customer brings a complaint about a firm's communications on surrendering investments at this time.
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UK Government announces further action to support firms affected by Covid-19

On 3 April, the UK government outlined further measures to support firms in financial difficulty. So far more than £90 million of loans to nearly 1,000 SMEs have been approved under the Coronavirus Business Interruption Loan Scheme since its launch last week – this scheme is now being extended: (i) covering all SMEs affected by Covid-19, not just those unable to secure regular commercial financing; (ii) stopping lenders from requesting personal guarantees for loans under £250,000, with additional limits on personal guarantees for loans above this amount; and (iii) making operational changes to speed up lending approvals.  The government also announced a new Coronavirus Large Business Interruption Loan Scheme (CLBILS) for firms with an annual turnover of £45-500 million, which will provide a government guarantee of 80% to enable banks to make loans of up to £25 million. There have now been over 130,000 enquiries from businesses across the country for business interruption loans, according to latest figures from UK Finance.
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EC extends consultation deadlines – Covid-19

On 3 April, the EC updated its consultation webpage to explain that it is extending the deadlines for responding to certain consultations because of Covid-19: (i) the post-implementation review of the regulatory framework for investment firms and market operators under MiFID II and MiFIR will now close on 18 May; and (ii) the review of the Non-Financial Reporting Directive (2014/95/EU) will now close on 11 June.
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Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the Covid-19 crisis

On 3 April, the EBA published a final report containing more detailed guidance on the criteria to be fulfilled by legislative and non-legislative moratoria applied before 30 June. The aim of these Guidelines is to: (i) clarify the requirements for public and private moratoria; (ii) clarify that payment moratoria, which meet the requirements, do not trigger classification as forbearance or distressed restructuring if the measures taken are based on the applicable national law or on an industry or sector-wide private initiative agreed and applied broadly by the relevant credit institutions; (iii) recall that institutions must continue to adequately identify those situations where borrowers may face longer-term financial difficulties and classify exposures in accordance with the existing regulation - the requirements for identification of forborne exposures and defaulted obligors remain in place; (iv) request that institutions, in order to allow effective monitoring of the effects of the Covid-19 pandemic and the application of response measures, collect information about the scope and effects of the use of the moratoria.
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Fees and levies

FCA consults on regulated fees and levies for 2020/21

On 7 April, the FCA began consulting on proposed 2020/21 regulated fees and levies to fund itself, the Financial Ombudsman Service (FOS), the Money and Pensions Service (MAPS), debt advice delivered by the Devolved Authorities and HM Treasury's illegal money lending (IML) expenses. The FCA's annual funding requirement (AFR) is £587.6m, an increase of 5.2% on last year, which includes the costs due to (i) Brexit; (ii) changes to the FCA's regulatory responsibilities; and (iii) to support its transformation programme. To assist firms impacted by Covid-19, the FCA has ensured that in apportioning its AFR across fee-blocks, the 71% of firms that pay minimum fees will see no increase. The FCA is also extending the period for SMEs (89% of firms) to pay their fees by two months to 90 days. Other proposals consulted on include (a) MTFs and OTFs reporting of their income as a measure of the size of their regulated activities; (b) to increase Part VII insurance business transfer application fees; and to introduce charges for submitting documents for prior approval by the FCA under the Prospectus Regulations. The FCA also provides feedback in relation to its cryptoasset businesses fees proposals. The deadline for comments is 19 May.
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Financial crime

PSR conference call on authorised push payment (APP) scams

On 6 April, the Payment Systems Regulator (PSR) published a note summarising its conference call on APP scams, which was held on 30 March. The call was hosted by Chris Hemsley, PSR Managing Director. The PSR wants to see more done to reduce APP scams and protect victims. The Contingent Reimbursement Model (CRM) Code has now been in place for ten months and the PSR is working with the industry, the Lending Standards Board and the FOS to understand how well it is working in the interests of consumers.
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Fintech

Please see the Bank of England’s dedicated Central Bank Digital Currency webpage, where they have uploaded a recording of a webinar that was held on 6 April. It is available under the related links section of the page.

UK Open Banking Further Delayed By Covid-19

On 7 April, the Competition and Markets Authority (CMA) published its amendments to the latest roadmap for the progress of open banking in the UK, following a consultation with the sector.
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EC consultation on a new digital finance strategy for Europe

On 3 April, the EC began consulting on a new five year digital finance strategy for Europe, to be proposed in Q3 2020. Building on the work carried out in the context of the FinTech Action Plan (e.g. the EU Fintech Lab), the work of the European Supervisory Authorities and the report issued in December 2019 by the Regulatory Obstacles to Financial Innovation Expert Group, and taking into account the contribution digital finance can make to deal with the Covid-19 outbreak and its consequences, the EC has identified the following four priority areas to spur the development of digital finance in the EU: (i) ensuring that the EU financial services regulatory framework is fit for the digital age; (ii) enabling consumers and firms to reap the opportunities offered by the EU-wide Single Market for digital financial services; (iii) promoting a data-driven financial sector for the benefit of EU consumers and firms; and (iv) enhancing the digital operational resilience of the EU financial system. In addition, the EC will be consulting specifically on payment services. The deadline for comments is 26 June.
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Fund regulation

FCA outlines expectations regarding funds in light of Covid-19

On 6 April, in a new webpage, the FCA set out its expectations of funds in the light of the Covid-19 crisis. The FCA states that: (i) it has agreed to allow firms to delay their annual and half-yearly fund reports; (ii) it does not have a supervisory concern about general meetings being held in a virtual format, although the FCA warns that it cannot forbear on private law obligations owed by authorised fund managers to unitholders or claims which they might bring – the managers will need to consider the terms of their fund documentation, including prospectuses and instrument of incorporation, when making arrangements for meetings; (iii) it expects firms to have plans in place already to deal with issues ensuring compliance with limits on value at risk as part of their risk-limit systems - if individual firms continue to face issues, they should speak to their supervisory contacts in the first instance; and (iv) it is willing to accept electronic signatures on applications to authorise funds or approve changes to funds.
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ESMA guidelines on performance fees in UCITS and certain types of AIFs

On 3 April, ESMA published a final report containing guidelines on performance fees in UCITS and certain types of alternative investment funds (AIFs). The main purpose for the guidelines, ESMA explains, is to ensure supervisory convergence regarding performance fee structures as well as the circumstances in which performance fees can be paid. ESMA provides guidance to fund managers when designing performance fee models for the funds they manage, including the assessment of the consistency between the performance fee model and the fund's investment objective, policy and strategy, particularly when the fund is managed in reference to a benchmark. The Guidelines in Annex IV of the report will be translated into the official EU languages and published on the ESMA website. The Guidelines will apply from the end of this two-month period.
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Markets and markets infrastructure

ESMA Terms of Reference for its Financial Innovation Standing Committee (FISC)

On 8 April, ESMA published the Terms of Reference for its FISC. The FISC will consider in all its activities how to: (i) contribute to a larger retail investor base to develop the Capital Markets Union; (ii) promote sustainable finance and long-term oriented capital markets; (iii) develop digital finance as an opportunity for market participants and regulators; and (iv) achieve a proportionate approach. The Terms of Reference cover the responsibilities of the FISC, product intervention power as well as structure and governance. Responsibilities of the FISC include, inter alia: (a) assessing risks to investors, markets and financial stability; and (b) promoting supervisory convergence.
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Payment services and payment services

Please see the Financial Crime section for the PSR's conference call on authorised push payment scams.

Please see the Fintech section for the EC's consultation on a new digital finance strategy for Europe.

PSR update on its work supporting cash access during the Covid-19 pandemic

On 8 April, the PSR published an update on its work to support cash access during the Covid-19 pandemic. The PSR, amongst other things: (i) is working with people from across the sector to make sure cash and digital payment networks remain available and is engaging with LINK and independent ATM deployers as a matter of priority; (ii) welcomes the industry’s initiative to increase the contactless limit, noting the FCA's relaxation on enforcement of SCA; and (iii) highlights its joint statement with the FCA responding to the CMA’s guidance on business cooperation under competition law. In the note, the PSR also compiles a list of FAQ's from across the sector in relation to, among other things: (a) the measures to ensure ATMs are still stocked and the lack of a need for consumers to stockpile cash; (b) how to access banking services if branches are temporarily closed; and (c) the contactless limit increase.
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EC's consultation on EU Retail Payments Strategy

On 3 April, the EC published a consultation on a retail payments strategy for the EU, in conjunction with its new digital finance strategy (please see the Fintech section). The EC states that the strategy will be an important contribution to reinforcing the international role of the euro, aimed at both strengthening Europe’s influence and consolidating its economic autonomy. It has four key objectives: (i) fast, convenient, safe, affordable and transparent payment instruments, with pan-European reach and “same as domestic” customer experience; (ii) an innovative, competitive, and contestable European retail payments market; (iii) access to safe, efficient and interoperable retail payments systems and other support infrastructures; and (iv) improved cross-border payments, including remittances, facilitating the international role of the euro. The outcome of this consultation will help the EC prepare its Retail Payments Strategy, to be published in Q3 of 2020. The deadline for comments is 26 June.
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Prudential regulation

BCBS reports on Basel III monitoring results based on end-June 2019 data

On 8 April, BCBS published the results of its latest Basel III monitoring exercise, based on data as of 30 June 2019. The report sets out the impact of the Basel III framework as well as the effects of the Committee's December 2017 finalisation of the Basel III reforms and the finalisation of the market risk framework published in January 2019. Given the June 2019 reporting date, the results do not reflect the economic impact of the Covid-19 on participating banks. As recently agreed by the Group of Governors and Heads of Supervision, implementation of the final Basel III minimum requirements has been deferred to 1 January 2023, and they will be fully phased in by 1 January 2028. The capital shortfalls at the end-June 2019 reporting date are €16.6 billion for Group 1 banks at the target level with reduced estimation bias and €20.3 billion with conservative estimation, in comparison with €24.7 billion at end-December 2018. The weighted average Liquidity Coverage Ratio (LCR) was stable at 136% for the Group 1 bank sample and at 177% for Group 2 banks. In order to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities, BCBS decided not to collect Basel III monitoring data for the end-June 2020 reporting date and, therefore, not to publish a report in spring 2021.
Press release
Basel III Monitoring Report

EBA update on impact of the Basel III reforms on EU banks’ capital and compliance with liquidity measures

On 8 April, the EBA published two reports which measure the impact of implementing the final Basel III reforms and monitor the current implementation of liquidity measures in the EU. Being based on June 2019 reporting date, these results do not reflect the economic impact of the Covid-19 on participating banks. The Basel III monitoring Report assesses the impact on EU banks of the final revisions of credit risk, split into four sub-categories, operational risk, and leverage ratio frameworks, as well as of the introduction of the aggregate output floor. It also quantifies the impact of the new standards for market risk (FRTB) and credit valuation adjustments (CVA). Overall, the EBA estimates that the Basel III reforms, once fully implemented in 2028 after the additional delay of one year agreed by BCBS, would determine an average increase by 16.1% of EU banks' Tier 1 minimum required capital. To comply with the new framework under the more realistic scenario, EU banks would need EUR 21.1 billion of additional Tier 1 capital. The semi-annual update of the EBA Report on liquidity measures, based on data prior to the Covid-19 epidemics, shows that EU banks have continued to improve their compliance with the liquidity coverage ratio (LCR). At the reporting date of 30 June 2019, EU banks' average LCR was 147% and 78% of the banks in the sample had an LCR above 140%.
Press Release
EBA Report on Basel III Monitoring (data as of 30 June 2019)
EBA Report on Liquidity Measures (data as of 30 June 2019)

Letter from PRA's Credit Union Supervision Team to credit unions (CUs) – Covid-19

On 8 April, the PRA published a letter sent to CUs that, among other things, sets out details of a PRA rule modification on minimum provisioning requirements available to all consenting CUs from 8 April until 1 January 2021. CUs have the option to consent to this modification such that the minimum provisioning requirements for bad debt will be reduced in line with the rates set out in the letter. CUs when deciding, should consider the profile of their membership and historic and current rates of arrears in their loan book. If taking up the modification, CUs should still be mindful of the overarching PRA requirement on provisioning that requires CUs to make adequate provision for bad debts. The PRA also outlines its supervisory approach and priorities for CUs: (i) it is crucial that CUs are mindful of sound governance, risk management and general prudence; (ii) the capital requirements policy was reduced for CUs on 16 March - where a CU is either already below its requirement or projects to be so, it should notify the PRA immediately; (iii) the PRA expects CUs to be mindful of their liquidity requirements, noting instances of good practice here, such as daily monitoring of members’ withdrawals, and considering investments held. The PRA also outlines its previous messages on regulatory reporting in that it will accept delayed submission for regulatory reports due on or before 31 May.
PRA letter
Updated PRA webpage

BCBS sets out additional measures to alleviate impact of Covid-19

On 3 April, BCBS announced additional measures to support the provision of lending by banks to the economy and measures to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities. The measures include: (i) technical clarifications to ensure that banks reflect the risk-reducing effect of extraordinary support measures introduced by various governments when calculating their regulatory capital requirements; (ii) amending BCBS' transitional arrangements for the regulatory capital treatment of expected credit loss accounting - providing jurisdictions with greater flexibility in deciding whether and how to phase in the impact of expected credit losses on regulatory capital; (iii) in agreement with IOSCO, deferring the final two implementation phases of the framework for margin requirements for non-centrally cleared derivatives by one year; and (iv) while BCBS will conduct the 2020 global systemically important bank (G-SIB) assessment exercise as planned, based on end-2019 data, it will not collect the memorandum data included in the data collection template - BCBS has also decided to postpone the implementation of the revised G-SIB framework by one year, to 2022.
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Sustainable finance

EC consults on the Renewed Sustainable Finance Strategy

On 8 April, the EC published a consultation document on the Renewed Sustainable Finance Strategy. The EC states that the Strategy will predominantly focus on three areas: (i) strengthening the foundations for sustainable investment by creating an enabling framework; (ii) increased opportunities to have a positive impact on sustainability for citizens, financial institutions and corporates; and (iii) climate and environmental risks will need to be fully managed and integrated into financial institutions and the financial system as a whole. The aim of the consultation is to collect the views and opinions of interested parties in order to inform the development of the renewed strategy. The deadline for comments is 15 July.
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Other developments

FOS finalises plans and budget for 2020/21 - Covid-19

On 8 April, the FOS published its plans and budget for 2020/21. The FOS notes that the plans and budget presented in this document were consulted on and highly developed before the widescale outbreak of Covid-19 in the UK. Having discussed the position with the FCA, the FOS have made adjustments to its budget and funding arrangements to help mitigate the financial pressures on firms. The minimum levy paid by businesses will be frozen. 70% of the FOS' income will now come from case fees, rather than the 60% proposed in the consultation. Based on analysis and stakeholders’ feedback some of the significant cross-cutting trends and issues the FOS expects to see in its casework are: (i) relatedly, and in light of the FCA’s programme of work in this area, the challenges of persistent debt and wider indebtedness, including in the context of the use of high-cost credit; (ii) fraud and scams -including both the continuing evolution and sophistication of fraudsters’ methods, and ongoing developments in mechanisms to tackle fraud; (iii) the potential for technology to accelerate the speed with which problems can arise, and the scale of the impact they can have; and (iv) an ongoing trend toward complexity - whether this relates to the circumstances of the parties involved, a changing regulatory landscape, or other developments that raise challenges. In her foreword to the document, Caroline Wayman, Chief Ombudsman and FOS Chief Executive advises that, in the current circumstances and given the imperative that firms' focus remains firmly on supporting customers, the FOS has decided to postpone the publication of further details regarding its future strategy.
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FCA sets out business plan for 2020/21 – Covid-19

On 7 April, the FCA set out its business priorities for the year ahead, with a specific focus on the challenges presented by the Covid-19 pandemic. The FCA, throughout the pandemic aims to: (i) protect the most vulnerable, ensuring that they can get the financial services and the help they need; (ii) tackle scams - helping consumers avoid the scams that spring up as the pandemic develops; (iii) ensure fair treatment for consumers and small firms - making sure that firms give strong and clear support to customers, recognising challenges that everyone is facing; (iv) keep markets working well, ensuring that markets remain orderly; and (v) mitigate firm failures - mitigating the impact on consumers where firms fail in these challenging circumstances. The FCA sets out four priority areas, in the medium term, to ensure that consumers: (1) can rely on safe and accessible payments to receive their pay or benefits, settle bills and access cash; (2) do not get into unaffordable debt; (3) can make effective investment decisions about their savings, and are not exposed to risky or poor value products; and (4) are offered fair value products in a digital age and are not at risk of being treated unfairly in the pricing and other terms they receive. The FCA also sets out its six cross-cutting work priorities (which include Brexit, climate change and operational resilience) and its planned sector work in wholesale financial markets, investment management, retail banking and general insurance and protection.
Press release
FCA 2020/21 business plan

ESMA updates its public statement of consultation practice

On 3 April, ESMA published an updated version of its public statement of consultation practices to take into account the amendments which the European Supervisory Authorities’ review has made to the ESMA Regulation. The statement summarises ESMA’s consultation practices, most of which have already been in place since before the amendment of the ESMA Regulation. The key elements of the ESMA consultation process include, amongst others: (i) publishing an annual work programme, so that all interested parties know when to expect output from ESMA; (ii) publishing all regulatory technical standards, implementing technical standards, guidelines, recommendations and questions and answers, technical advice and opinions to the EU Institutions; (iii) launching Calls for Evidence at an early stage, where needed; and (iv) producing reasoned consultative proposals, including cost-benefit analyses where appropriate and proportionate in relation to the scope, nature and impact of the measures. The changes are now in place.
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