The FCA has published Consultation Paper 17/32: Quarterly Consultation No. 18 (CP17/32).

In CP17/32, the FCA is proposing changes to:

  • chapter 3 of the Fees manual so that the FCA may charge authorised payment institutions and authorised electronic money institutions that wish to vary their permissions to provide payment initiation services and account information services;
  • chapter 2, annex 1 of the Decision Procedure and Penalties manual and chapter 19 of the Enforcement Guide to reflect the transposition of the Packaged Retail and Insurance-based Investments Products (PRIIPs) Regulation;
  • a number of forms and associated annexes in the Supervision manual (SUP) relating to the implementation of the Insurance Distribution Directive. Also, to ensure that the rules in COBS 16.5 and COBS 16.6 continue to apply to insurers doing long-term insurance business in relation to life policies the FCA proposes changing Conduct of Business sourcebook (COBS) 16.1.1R to clarify that only COBS 16.2, COBS 16.3 and COBS 16.4 will apply to firms carrying on non-MiFID business e.g. designated investment business (other than MiFID, equivalent third country or optional exemption business);
  • 2.2.28R(2) of the Prudential sourcebook for Investment firms. The FCA proposes adding a sentence to ensure full implementation of Article 83(3) of the CRD IV. In outline, the addition requires firms to have adequate financial resources and internal capital where they hold opposite positions in stock-index futures which are not identical in respect of either their maturity or their composition or both;
  • annex 2 of chapter 13 of COBS that relate to economic assumptions for projections;
  • form FIN-A and updating the associated guidance in SUP 16 annex 1BG. The FCA also proposes to extend the exemption from controllers reporting (form REP002) that is currently available for friendly societies in SUP 16.4.10R, to include mutual insurers; and
  • address the consequence of the policy decision to pass on to the market the full benefit of exemptions negotiated from the Mortgage Credit Directive (MCD). As part of this, the FCA originally redefined retirement interest-only mortgages as lifetime mortgages. The FCA is now revisiting this position because it may be restricting consumer access to retirement interest-only mortgages. The FCA is also proposing to correct a second inadvertent consequence of its MCD implementation. One part of its regulatory approach to lifetime mortgages has been to require them to be restricted to older customers above a specified age. Inadvertently, the FCA partially dis-applied this requirement when making the MCD changes. The FCA now proposes to correct this.

In Consultation Paper 16/18: Changes to disclosure rules in the FCA Handbook to reflect the direct application of PRIIPs Regulation the FCA proposed removing the requirement to produce a key features illustration (KFI) for PRIIPs and therefore the obligation to provide personalised projections. The FCA also proposed that firms would have the option, but not the obligation, to continue to provide ‘standardised deterministic projections’, if they were produced in line with the relevant rules in COBS. In Policy Statement 17/18: FCA’s disclosure rules following application of the PRIIPs Regulation: Feedback to CP16/18 and final rules the FCA updated its rules to reflect the requirement for firms to provide the PRIIPs key information document (KID) instead of a KFI. However, in this Policy Statement the FCA did not finalise its approach to providing other projections alongside the PRIIPs KID for PRIIPs (that are not in-force PRIIPs). In chapter 6 of CP17/32 the FCA sets out a further consultation on what projections can be provided in addition to the PRIIPs KID.

View Latest FCA Quarterly Consultation, 1 September 2017