Compliance News - 7 October 2011
CC:ME WEEK ENDED 7 OCTOBER 2011
The standard of financial promotions is a priority element of the FSA's retail market strategy and work in this area is part of an overarching Treating Customers Fairly (TCF) initiative.
The FSA issued guidance on Prominence within financial promotions includes, among other things:
- Misleading headline claims
- Small print
- Prominence of Key Risks
- Insufficient product information
- Unrealistic impressions of the product
- Cherry-picked or too prominent past performance data
- Misleading savings claims
FSA website
The FSA has published final guidance on how they intend to assess firms' implementation of the Remuneration Code for the coming year. The Remuneration Code sets out the standards that banks, building societies and some investment firms have to meet when setting pay and bonus awards for their staff. FSA issued Dear CEO Letters on 5 October regarding the Remuneration Code setting out its approach to assessing firms’ implementation of the Code.
The Dear CEO letters also contain guidance on:
- defining Code Staff
- using long-term incentive plans
- using non-share instruments in variable remuneration
Two version have been issued, one for firms in proportionality Tier 1, which includes a template for self-assessment of compliance with the remuneration code; the second letter is relevant for firms in proportionality Tiers 2,3 & 4.
Given the significant changes to the FSA Handbook on remuneration over the last two years, the FSA stated their aim is to keep further changes in 2011 to a minimum. Nevertheless, in several policy areas more work has been done to clarify certain aspects of the Code and make clear how they expect firms to comply with it.
Source: Financial Services Authority
FSA website
FSA website
FSA has revised its implementation assumptions in light of the discussions in Europe about the splitting of the implementation dates for Solvency II (also referred to as bifurcation). FSA will only revisit these assumptions if there is a significant change in the dates to beyond 2014.
FSA’s revised planning assumptions are that:
- 1 January 2013 remains the date at which the responsibilities of supervisors and EIOPA would be switched on (i.e. transposition of the Directive would have to be complete by 1 January 2013)
- 1 January 2014 is when the Solvency II requirements would be switched on for firms
There are issues still to be resolved in Europe, including but not restricted to the approach to groups, equivalence, reporting and transitionals. The FSA has developed an approach that balances what is needed to discharge regulatory obligations and bring in the new regime, with the needs of the industry. This approach to implementation depends on whether the firm intends to use the standard formula or an internal model.
Source: Financial Services Authority
FSA website
FSA website
This document sets out the FSA’s findings during their prudential review of firms’ mortgage forbearance and impairment provisions processes and sets out the actions they want firms to take. The document includes good and poor practice guidance to help your firm comply with its responsibilities under the rules set out in Handbook (SYSC Chapter 4, SYSC Chapter 7 (Risk Control) and Principle 8 (Conflict of Interest). The principles outlined in the Guidance are also applicable to other loan facilities and should be considered within this wider context.
This review considers forbearance processes across firms, whether in customer services, operations, debt management, credit risk or finance functions. It includes consideration of internal reporting of forbearance activities, impairments and provisions to management committees and boards and external disclosures of credit risk exposure and impairment provisions.
This review is primarily aimed at residential mortgage lenders or mortgage administrators. This review should be considered by the management responsible for any aspect of forbearance activities, credit-risk reporting, finance, audit and the compliance functions of firms.
Source: Financial Services Authority
FSA website
FSA website
The Financial Services Authority invites comments on this Consultation Paper. Comments should be received by 6 January 2012. The proposals set out in this CP will be of interest to Recognised Bodies, comprising Recognised Investment Exchanges (RIEs) and Recognised Clearing Houses (RCHs). They are intended to address the own capital requirements of a Recognised Body arising from its position as a business enterprise.
The OFT is consulting on its approach to the notification of names for inclusion on a consumer credit licence and the type of names which will be considered misleading or otherwise undesirable. The consultation explains the provisions of the Act relating to trading names, the processes involved in complying, what needs to be notified, and the OFT's approach to misleading or otherwise undesirable names, including its enforcement approach. The document covers all types of trading names, including names used in online trading. The OFT seeks comments on all aspects of its analysis and proposals
Source: Office of Fair Trading
This consultation paper concerns two separate proposals: a change in the audit exemptions and a change in the law to allow companies to change their accounting framework. Each proposal has its own draft Impact Assessment
Consultation opened: 6 October 2011 and Closes on 29 December 2011
Source: Department for Business Innovation & Skills
Two organisations have taken action after they breached the Data Protection Act by failing to encrypt personal information on laptops that were later stolen. Both organisations have now taken action to make sure the personal information they handle is protected. This includes ensuring that portable devices used to store personal data – including laptops - are appropriately encrypted. Both organisations will also introduce adequate checks to make sure their employees are following policies and procedures governing the secure use of personal information.
This conference will cover the most important issues facing lenders including The Bank of England's engagement with the UK mortgage market.
Source: Council of Mortgage Lenders
TCC IS DELIGHTED TO ANNOUCE THAT WE HAVE BEEN SHORTLISTED FOR TWO AWARDS AT THE THOMSON REUTERS ACCELUS 7TH ANNUAL COMPLIANCE AWARDS
TCC has been shortlisted for the 2011 Best Consulting Firm of the Year Award
AND
Joanne Smith, CEO, has been shortlisted for the 2011 Compliance Personality of the Year Award
AND
Joanne Smith, CEO, has been shortlisted for the 2011 Compliance Personality of the Year Award
Source: Complinet
