Ken Hogg, Director, Insurance Sector, FSA has addressed the Association of Financial Mutuals. He stated:

 

“Last month, we published our second ‘Dear CEO’ letter to all chief executive officers of mutual insurers that provide with-profits business. It follows last October’s letter, which explained the conclusions we had reached on several questions put to us by some of you, and by the AFM’s predecessor. We asked you to consider the implications of our conclusions for yourselves and respond to us by the end of December.”

 

“Our latest letter aims to highlight some of the points that emerged from our consideration of your responses. To begin with, we gave very careful and very detailed consideration to firms’ responses, which is why it has taken us some time to come back to you. The varying responses also reinforced our understanding of the sector’s diversity, particularly in terms of form, size, origins and the development of individual mutuals over the last 200 years.”

 

Mr Hogg then discussed aspects of With-profits, Solvency II and Retail Distribution Review, closing by stating:

 

“Strength and intelligence are essential ingredients to the success of any business, and none of you would be sitting here today if you didn’t have both. But the challenge you face now is to be innovative and responsive to your sector’s imminent changes. And if you can do that, while still operating in the best interest of your members and policyholders, you will be one of the survivors.”

 

Source: Financial Services Authority

FSA Website

Lynda Blackwell, Mortgage Policy Manager, FSA addressed the Building Societies Association Annual Mortgage Seminar to discuss the Mortgage Market Review (MMR) and with the aim of dispelling some of the “myths” regarding the proposals.

 

Ms Blackwell stated that the overall aim of the MMR was to create a mortgage market that was sustainable for all participants and one that works better for consumers throughout the economic cycle.

 

The theme of Ms Blackwell’s speech was that house-price stability was key for homes to become more affordable in the long term, as house-price booms kept people out of the market. Similarly, house-price busts meant that homes were worth less than paid for. Thus what was needed was a housing market that was “boring” and “Where things are really quite predictable”.

 

Source: Financial Services Authority

FSA Website

Policy Statement 10/16 reports on the main issues arising from Consultation Paper 10/9 Enhancing the Client Assets Sourcebook and publishes final rules.

 

This Policy Statement will be of interest to regulated investment firms and groups who hold the relevant client assets and money permissions, as well as:

 

• Their senior management and staff with client money and/or assets responsibility;

• Their trade associations; and

• Firms who intend to hold or control client money.

 

This paper may also be of interest to consumers, who will benefit from enhanced protection as a result of the proposed rules changes.

 

In CP10/9 Enhancing the Client Assets Sourcebook (CASS) FSA proposed a number of policies to enhance the protections offered by CASS in response to issues highlighted by the global financial crisis and a number of insolvency appointments – most notably that relating to the insolvency of Lehman Brothers International (Europe) (LBIE).

 

The proposals FSA consulted on included:

 

• Introducing a disclosure annex for prime brokerage agreements;

• Daily reporting to prime brokerage clients;

• Restricting the placement of client money with group banks;

• Prohibiting the use of general liens in custodial agreements;

• Establishing a CASS operational oversight controlled function; and

• Reintroducing a client money and asset return.

 

While FSA received widespread support to enhance the protections offered by the CASS regime, they received mixed feedback on the proposals relating to:

 

• the prime brokerage disclosure annex;

• daily reporting to prime brokerage clients;

• restricting client money deposits intra-group; and

• prohibiting general custodian liens.

 

Although FSA plan to address a number of the detailed concerns raised by respondents, they broadly intend to proceed with the implementation of the proposals they consulted on.

 

By introducing the rules contained within this Policy Statement, FSA aim to enhance standards of client protection in the UK, as well as market confidence and financial stability.

 

The made rules attached to this Policy Statement will come into force over the course of 2011. The commencement dates will require work from regulated firms and the FSA to ensure that the new system for categorising firms as small, medium or large for the purposes of the Client Money and Assets Return is in place by June 2011.

 

In early January all firms with the relevant investment business and client assets permissions and requirements will be sent an email requesting certain information about their client money and asset holdings.

 

This email will, at a minimum, request the following information:

 

a. the name of the firm and its firm reference number (FRN);

b. the firm’s highest client money holding during the 2010 calendar year;

c. the firm’s highest value of client assets during the 2010 calendar year; and

d. the name of the individual within the firm who has been assigned responsibility for client assets oversight before the implementation of the CASS operational oversight controlled function – FSA will hold this individual responsible for CASS operational oversight until the CF10a is introduced for medium and large firms.

 

Firms will have until 31 January 2011 to complete this return and submit it to FSA.

 

Source: Financial Services Authority

FSA Website

This edition of List! is dedicated to the results of the 2010 Market User Survey. The survey was commissioned by the Listing Authority Advisory Committee (LAAC), a body of market practitioners appointed as a sub-committee of the FSA Board to advise the UK Listing Authority (UKLA) on primary market issues. This is the second survey of market users that LAAC has commissioned; the first Market User Survey was completed in 2007.

 

In this edition FSA have detailed the survey’s main findings. FSA have also included their reflections on these findings and, where appropriate, how FSA intend to respond to them. The survey’s overall objective was to assess the UKLA’s performance in relation to the key aspects of its role, and to measure whether this performance had improved or declined since the first survey. The results have now been analysed, and have been presented to LAAC and the FSA Board.

 

In broad terms FSA think the survey results demonstrate an improvement in performance from the strong base reflected by the 2007 survey. Given the challenges presented by the credit crisis during this period, and the feedback from investors that during such times of stress the performance of FSA’s role becomes particularly important, this feedback is seen as particularly pleasing.

 

FSA equally recognise that there is a degree of tension in their objectives, and in the various priorities of market participants, and this tension was recognised by IFF itself in the commentary in its report. There is a degree of tension between the need to ensure adequate investor protection and the need to ensure appropriate access to capital markets, and between the need to provide an appropriate level of regulation and to display a sufficient degree of commercial sophistication.

 

There is equally a tension between the need to be flexible and the need to be consistent, and between the desire of market practitioners to have access to senior members of the UKLA and FSA’s responsibility to ensure they manage their resources in an effective manner. FSA see an important part of their role at the UKLA to be to ensure they have struck an appropriate balance between these potentially competing pressures. The Market User Survey provides important feedback to help FSA to determine how effectively they have achieved this aim.

 

Source: Financial Services Authority
 

The FSA has published a paper which details the international context for financial regulation and for the FSA’s responsibilities and explains how it will deliver their regulatory priorities through international engagement. It also includes at Annex 1 a useful diagrammatic representation of the international architecture, which explains the inter-relations between the many international bodies involved.

 

The Executive Summary states:

 

“The increasing global nature of the financial services market-place has meant that regulators have been raising the levels of regulatory communication and cooperation, and enhancing the role of international standard-setting regulatory organisations. The breadth and depth of the issues currently under consideration is wide ranging. In many areas of regulation, the context, levers and drivers are international and likely to remain so. International engagement is essential to be able to deliver on domestic objectives and priorities. We have always been a high profile participant and leader in international and European debates about financial services regulation."

 

“The financial crisis has pushed financial services regulation up the international political agenda, with the G20 heads of state taking a direct interest. It has also fundamentally altered the dynamics of addressing the risks posed by financial services institutions. The crisis made it clear that there is an interconnectedness of the global economy and of the global financial markets. Risks posed by those interconnected global markets and firms are driving the need to build a strategic global approach to regulation. Only a coordinated approach among regulators will allow us to manage these risks through coordinated macro-prudential analysis, harmonised prudential rules, effective supervision of cross-border firms and fair, orderly and clean global markets."

 

“Particularly in Europe, there is an ongoing drive to find common solutions and coordinating action. We have actively supported the establishment of the new EU regulatory framework in terms of identifying macro-prudential risks, achieving high common standards and rules and ensuring that these are effectively implemented in all European countries. We continue to believe that supervising individual firms and market infrastructure providers must remain with national supervisors for it to be delivered effectively and to incorporate the appropriate accountabilities."

 

“To achieve the appropriate regulatory outcomes, the UK needs to continue to play an influential role internationally. We therefore have a strong international focus in most of the work that we do and we have strengthened that focus over the last couple of years by enhancing our skill sets, organisational structure and resources to deliver the enhanced global and, in particular, EU engagement. We must be clear and convincing in showing that we have learned the lessons of the crisis and recognise the need to operate in this new landscape to achieve effective cross-border solutions."

 

“This paper explains the way in which we deliver against our priorities and commitments through our work at EU and global level. It builds on previous strategic documents, such as The Business Plan and The Turner Review, and provides more information about the international framework in which we are working.

 

Source: Financial Services Authority

 

The BBA said:

 

“UK banks support the broad structure of the new UK regulatory framework which, in the long-term will allow the regulatory authorities to become strong advocates for the future competitiveness of UK financial services. We also support both the ‘twin peaks’ approach and focus on macro-prudential analysis and action."

 

“However we feel the Treasury’s proposals may not have built in sufficient checks and balances. Particularly, we believe government must consider how financial stability fits with monetary policy, fiscal policy and the overall macroeconomic management of the economy and that more thought needs to be given to how the regulator will work with the Treasury and Parliament."

 

“We believe any move to a more judgement-based approach to prudential supervision - where strategies and business models are questioned – will need more work and that the Prudential Regulatory Authority will need a proper process and to be accountable and transparent."

 

“We are not sure consumers will be best served by the regulator becoming a ‘consumer champion’. And we believe the Consumer Protection and Markets Authority must give equal weight to its responsibilities for retail and wholesale markets and that it will need a strong, cohesive markets division to represent UK interest in European and international discussions.”

 

Source: British Bankers’ Association

BBA Website

Over the past three years TCC have helped a number of firms with remediation work and investigative work to satisfy the regulator.

 

We provide advice regarding FSA monitoring, investigation and enforcement including remediation and investigative services, Skilled Persons Reports and Section 166-168.

 

Please do not hesitate to contact us on 0207 645 8808 for further information.

 

Source: The Consulting Consortium

TCC Website

The Council of Mortgage Lenders welcomed the extension of the temporary concession on support for mortgage interest announced today under the government's comprehensive spending review. The £200,000 limit on mortgage size and the 13 week waiting period (down from 39 weeks) will now remain in place until January 2012. The CML trusts that the government will review the housing market conditions before that point and decide on whether further continuation would be appropriate.

 

According to the government, this will cost £90 million over the next two years - a modest sum in the overall scheme of public expenditure, but a reprieve that will come as a relief to those households which, through no fault of their own, lose their income and their ability to meet their mortgage obligations.

 

CML members who lend extensively to the affordable housing sector look forward to engaging in developing different ways of doing things to support the expansion of private finance. However, the right conditions need to be in place for this to happen in the way the government envisages and this includes strong regulation as well as targeted capital investment and support for individuals through the welfare benefit system.

 

Source: Council of Mortgage Lenders.

CML Website

A new industry guide, jointly published by the Association of Mortgage Intermediaries (AMI), the Council of Mortgage Lenders (CML) and the Intermediary Mortgage Lenders Association (IMLA), brings greater clarity and transparency on how lenders and intermediaries work together on mortgage sales and administration. Although much of what is in the guide is already in practice in the industry, the guide gives everyone - intermediaries and lenders - a shared understanding and clear description of what should be done.

 

The guide will be useful underpinning for market confidence, and should help consumers and policymakers, as well as the industry. With the FSA turning its attention to proposals on distribution and advice in November, the industry sees the guide as an important marker and clear evidence that common, high quality working standards can be achieved through productive collaboration between the lending and intermediary sectors.

 

Source: Council of Mortgage Lenders

CML Website

Natalie Ceeney, chief ombudsman, addressed the Insurance Institute of London and concluded:

 

“In essence, I believe that complaints are the opportunity for you to:

 

• Recognise an expectation that has not been met;

• Fix a problem (taking account of the ombudsman’s position, where appropriate);

• Reconnect with – and gain more loyalty from – a customer that you might otherwise have lost;

• Generate positive word of mouth rather than negativity;

• Provide a better service and design – and sell better products in the light of what complaints tell you; and

• Put yourselves at a competitive advantage.

 

“I believe that the process detail of your complaints-handling approach matters much less than your organisation’s mindset. Your responsibilities to your customers don’t end when you have done the deal or sold the product. You have ongoing responsibilities – including when you are responding to customer complaints. This is what providing really excellent customer service is all about.”

 

Source: Financial Ombudsman Service

FOS Website

We at TCC offer a service that takes the pain out of complaints.

 

We can design an end to end process and provide the skilled resources to support your firm.

 

We deal with the Financial Ombudsman Service (FOS), third party complaint handling companies and directly with customers for a number of high profile clients.

 

 

 

Call us now on 020 7645 8808 and find out what we can offer.

 

Source: The Consulting Consortium

TCC Website