On 4 March 2022, the FCA published Consultation Paper 22/4: Quarterly Consultation No. 35 (CP22/4).

In CP22/4 the FCA sets out miscellaneous amendments to the FCA Handbook comprising:

  • Changes to chapters 2 and 13 of the Perimeter Guidance (PERG) manual to clarify the application of the MiFID II ancillary activities test in the absence of overall market size data. Specifically, the FCA proposes to make clarifications within the UK version of Commission Delegated Regulation (EU) 2017/592 and the PERG 2 and PERG 13 Q&As to remove references that state a need to comply with both the market share test and main business test in order to benefit from the exemption. The FCA also proposes to clarify that for the purposes of relying on the main business test in the absence of the relevant market size data from an official source, firms may rely on the information published by an EU institution or regulator for the last 3 annual calculation periods for which that information is available. For the year 2022, for example, this will mean relying on the data available for the years 2018, 2019 and 2020.
  • Changes to the research and inducement rules for collective portfolio managers so they are subject to the same rules as investment managers. The changes the FCA is proposing to the list of minor non-monetary benefits rules in Chapter 18, Annex 1 of the Conduct of Business sourcebook (COBS) will complete the extension of the changes to the research rules for collective portfolio managers that were introduced in Policy Statement 20/21.
  • Changes to reflect amendments the Treasury has made to the UK MiFID delegated regulation in places where it is copied out in the Glossary and Conduct of Business sourcebook. The changes include revisions to the definitions of ‘durable medium’ and ‘website conditions’ in the Glossary and changes to COBS 6.1ZA.14, COBS 6.1ZA.17 and COBS 6.1ZA.19 (information about the firm); COBS 8A.1.6 and COBS 8A.1.7 (client agreements); COBS 9A.2.18 (suitability); COBS 14.3A.7 and COBS 14.3A.9 (preparing  product information to clients); and COBS 16A.3.1, COBS 16A.3.5, COBS 16.A.4.1 and COBS 16A.4.3 (reporting information to clients).
  • Changes to Listing Rule (LR) 14 to reflect the original policy position for investment entities other than open-ended investment company’s prior to the amendments introduced in January 2021. The FCA will amend the rules to provide that LR 14 does not apply to equity shares issued by an investment entity unless: (i) it has a premium listing of a class of its equity shares as a closed-ended investment fund under LR 15; or (ii) it is an open-ended investment company to which LR 16A applies.
  • Changes to the approach to continuing professional development for retail investment advisers and pension transfer specialists. The FCA proposes to amend the guidance in Training and Competence sourcebook 2.1.20G to provide greater flexibility for firms and advisers adapting to new ways of learning. Specifically, the FCA’s proposal relates to the minimum amount of time expected to be spent on structured activities (e.g., courses and e-learning) for them to count towards continuing professional development.
  • Extending the MIFIDPRU TP 7.4R(2)(b) notification deadline to 29 June 2022. The FCA also proposes to: (i) extend the scope of MIFIDPRU TP 7 to include former IFPRU investment firms and former consolidating UK CRR parent undertakings where those entities did not obtain approvals under the UK CRR before 1 January 2022; (ii) allow firms and parent entities to update the terms of non-MIFIDPRU 3‑compliant capital instruments issued before 1 January 2022 to make them compliant. Firms and parent entities would be able to then benefit from notification under MIFIDPRU TP 7 (rather than make a MIFIDPRU 3 application), provided that this can be done before the new 29 June 2022 notification deadline; and (iii) update related Handbook guidance to provide further clarity on how these provisions operate.

The deadline for comments on CP22/4 is 11 April 2022.