Rules and consultations
The FCA is seeking feedback on its proposals to change its rules, allowing overseas schemes to be recognised under the new Overseas Funds Regime (OFR) if the UK Government recognises an overseas jurisdiction as equivalent. The FCA indicates that it may need to consult about additional investor protection requirements following each individual equivalence decision.
Comments on the Consultation Paper are due by 12 February 2024.
Proposals to improve the quality of the information collated by credit reference agencies (CRAs) have been tabled by the regulator. Specifically, the proposals aim to;
- Require FCA-regulated data contributors, such as lenders, to share credit information with CRAs.
- Introduce a common data reporting format to enhance consistency across CRAs and promote competition.
- Provide greater control for consumers over how they are viewed through making it easier for consumers to record non-financial vulnerability information.
Sheldon Mills, Executive Director, Consumers and Competition at the FCA, said: “Poor quality credit information can result in people being cut out of the credit market or taking on more debt than they can afford.
“These improvements will help deliver more effective lending decisions, particularly for consumers with limited or poor credit records, and support sustainable economic growth. The changes will also enable people to more easily raise disputes when mistakes are made.”
New rules to ensure access to cash in these digital times is maintained have been proposed by the FCA. Designated banks and building societies will be required to assess gaps in access to cash, taking local factors such as demographics and transport into account. Where gaps are identified, they will need to act to close them.
An advice Guidance Boundary Review has been launched by the FCA and the Government on proposals to help people make more informed choices about their pensions and investments. Views are sought on three proposals;
- clarifying when firms can give consumers support without giving regulated financial advice;
- allowing firms to give support tailored to groups of people in similar circumstances;
- making it easier for for firms to provide affordable recommendations to clients with simpler needs and smaller sums to invest.
Sarah Pritchard, the FCA’s Executive Director for Markets and Commercial, said: “We want to open the door for more people to get the right advice or support to manage their money at the time they need it and at a cost they can afford.”
Publications
A data update on the cash savings market has been published. The FCA said: “We have seen some indications of a more competitive cash savings market emerging, with higher rates being paid to savers and data indicating people are moving their money to take advantage of them”.
Deposits held in fixed-term and notice accounts increased by £17 billion ($21 billion) between July and October 2023.
Sheldon Mills, the FCA’s Executive Director of Consumers and Competition, said: “There is a more competitive savings market now than July – including many easy access accounts paying above 5%.
“But there are still low paying accounts out there, particularly products that are no longer on sale. We want firms to keep prompting customers in lower paying accounts to move, and we encourage customers to shop around for the best savings deals.”
The regulator has sent a letter to the Treasury Committee explaining its decision not to take enforcement action following investigations into NCM Fund Services Ltd and Northern Provident Investments Ltd, the two organisations that approved the financial promotions of Blackmore’s mini-bonds. The FCA says it has not been able to find sufficient evidence to meet legal thresholds to justify enforcement action, but recognises that “many will be disappointed”.
Speeches and media
With many still struggling with financial pressures, the risk of loan fee fraud at Christmas is rising, the FCA has warned. So it has launched a campaign alongside debt advice coalition Debt Free Advice to alert people to the dangers.
Research has found that 40% of UK adults are worried about Christmas spending, and 29% of parents with young children have already borrowed or intend to do so to cover the cost of the holidays. The amount borrowed averages £412 ($518), up from last year’s figure of £305 ($383).
Loan fee fraud typically results in a loss of £255 ($320), with borrowers fooled into paying fees for loans they never receive. The campaign suggests a three-step check to protect from scammers;
- If you are cold called or emailed, it could be a scam.
- Or if you’re asked to pay an upfront fee, it could be a scam.
- Or if you’re asked to pay quickly or unusually, it could be a scam.
