Rules on open banking, SME access to the ombudsman and the approach to boosting competitiveness feature alongside continuing concerns over crypto marketing and the handling of Politically Exposed Persons.

Enforcement

Novaloans Ltd, trading as Cash4UNow, went into administration on October 23. The company was an online-only, high-cost short-term lender. Administrators from Armstrong Watson LLP have been appointed.

Rules and consultations

The Joint Regulatory Oversight Committee (JROC), which the FCA is part of alongside the Payments Systems Regulator (PSR), Competition and Markets authority (CMA) and HM Treasury, welcomed the publication of two data collection frameworks by Open Banking Limited.

The FCA said: “The collection of API data is a key step forward in developing an ecosystem where open banking API availability and performance is consistently high across all Account Servicing Payment Service Providers”. Firms are encouraged to submit data to JROC as part of the ongoing project.

A review of whether larger SMEs should be given access to the Financial Ombudsman Service has been completed by the FCA, with the regulator concluding “the current level of coverage remains appropriate”. It said: “Currently, SMEs are able to access the ombudsman service if they have a turnover of less than £6.5m and fewer than 50 employees, or a balance sheet total of less than £5m. These thresholds cover 99% of the 5.6 million private sector businesses in the UK”.

The full feedback statement was published under FS23/5.

Speeches and media

Nikhil Rathi gave a speech at a City dinner at London’s Mansion House entitled “Collaborate to compete: why we must all embrace a growth mindset”. The focus was on industry, government and regulators working together to boost UK competitiveness, with the FCA’s chief executive stressing “we need to work together on a long-term vision, not short-term tactics”. He also urged “a balanced view of risk”.

Our regular columnist Gavin Stewart gave his assessment of Rathi’s remarks.

Scrutiny of cryptoasset promotions continues to be a strong theme of the FCA’s current work, with the regulator publishing a further warning about “common issues” that are giving it cause for concern. These are largely failures to highlight risks clearly enough. The regulator also said it had now issued 221 alerts since new legislation on crypto marketing came into effect on October 8.

The fallout from NatWest Group’s decision to close Nigel Farage’s account and the wider issues around Politically Exposed Persons continued, with the FCA issuing a statement on the findings of the NatWest-commissioned independent report. The regulator said the findings “has highlighted potential regulatory breaches and a number of areas for improvement. These include:

• the firms’ processes, systems and controls around how they consider potential closure of accounts and handle complaints from their customers;
• the allocation of responsibilities and effectiveness of the firms’ governance mechanisms.”