global insurance management

Compliance Updates - Information Only


Sep 14 2011

Compliance Updates - Information Only

Relevance:             All firms.

Action required:     Nothing to do at this stage, for awareness only.

There have been a number of items issued by the FSA that we want to draw your attention to but you do not need to take any action at this stage.

1)     Financial Conduct Authority (FCA)

  • This is the replacement body to the FSA that will regulate the conduct of about 27,000 firms after 2012.
  • Its first publication “Approach to Regulation” outlines its objectives and powers, responsibilities and functions as well as where it fits in the new regulatory structure;
  • Its main objective is to “protect and enhance confidence in the UK financial system”;
  • It is expected to intervene more strongly in retail financial markets and may also stop firms from marketing and selling certain products.

2)     Financial Crime Guide

  • A draft guide covering all aspects of what is considered to be financial crime has been published.
  • As with all other FSA guidance, it will be non-binding, does not contain rules and is said to impose “no new requirements” on firms.
  • The FSA “already expect[s] firms to have systems and controls in place to deal with the financial crime threats they face” and the FSA will “take action against those who do not”.
  • As such, the FSA will expect firms to be aware of the Guide and to consider how to translate it into more effective policies and controls.
  • The consultation period is due to close in September and the final version probably issued in December.

3)     Financial Promotions

  • Recent guidance has been issued relating to prominence of items in marketing and adverts;
  • Prominence is defined as “the state of being easily seen”;
  • It covers positioning of text, background, colour, type size etc.;
  • It covers all product areas and all media types;
  • Remember – all promotions must be “clear, fair and not misleading”;
  • Monitoring and thematic reviews will continue, likely to see more activity in this area.

4)    FOS Award

  • Limit raised to £150,000 from 01 January 2012;
  • FSA suggest “firms should keep capital requirements and PII arrangements under review”.

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