The following posts provide a snapshot of selected UK, EU and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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UK FOS publishes annual report and accounts for 2024/25
2 July 2025
The Financial Ombudsman Service (FOS) has published its annual report and accounts for 2024/25, accompanied by a press release. The report highlights a 54% year-on-year increase in complaints, with 305,726 new cases received, the highest volume since the PPI issue in 2018/19. The significant increase is driven primarily by complaints concerning motor finance commission (73,328 cases) and unaffordable lending (71,685 cases), alongside notable increases in fraud and scams. Around half of all complaints were submitted by professional representatives, a sharp increase from 25% the previous year. On average, across all financial products, the FOS upheld 34% of the complaints it resolved, compared to 37% in 2023/24. In response to operational pressures, the FOS confirms it is expanding its workforce, modernising its structure and investing in digital transformation.Topic : Consumer / Retail -
HMT and UK FCA announce new "targeted support" proposals for pensions and retail investments
30 June 2025
The UK Financial Conduct Authority (FCA) has published a consultation paper CP25/17 (CP) accompanied by a press release and updated webpage, proposing a new regulatory framework for "targeted support" in pensions and retail investments. The CP forms part of the Advice Guidance Boundary Review and the FCA's five-year strategy to support growth and help consumers navigate their financial lives. The deadline for comments is 29 August and a policy statement is expected by the end of the year, subject to the volume of feedback received.
The CP proposes the introduction of a new regulated activity of targeted support, which would allow firms to provide ready-made suggestions on investment products or courses of action to groups of consumers with common characteristics, making it clear that such support does not constitute fully personalised financial advice. The UK Government has announced that it will consult on amending the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 accordingly to introduce the new regulated activity. A draft statutory instrument is expected to be published alongside the Mansion House speech on 15 July. The targeted support framework would not impact the existing regulatory framework for activities that can currently be delivered as guidance without FCA authorisation.
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FCA publishes discussion paper on the future of the UK mortgage market
25 June 2025
The UK Financial Conduct Authority (FCA) has published discussion paper DP25/2 (DP) accompanied by an updated webpage and press release, on the future of the UK mortgage market, as part of its ongoing mortgage rule review. The DP forms part of the FCA's five-year strategy to rebalance risk, support growth and help consumers navigate their financial lives. It outlines potential reforms to improve access to sustainable home ownership, support responsible lending and encourage market innovation.
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FATF updates standards on payment transparency
18 June 2025
The Financial Action Task Force (FATF) has published revised standards and an accompanying explanatory note, updating its comprehensive framework on recommendations to strengthen global efforts in anti-money laundering, counter-terrorist financing and counter-proliferation financing, as announced during the joint FATF-MONEYVAL Plenary meeting. The FATF update includes amendments to Recommendation 16, which governs the transparency of wire transfers through the payment chain and is commonly referred to as the "Travel Rule. The revised recommendation is aimed to modernise FATF standards in response to the evolving payments landscape, which now includes a broader range of products and services, technologies and business models.
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HMT updates BNPL policy for domestic premises suppliers
16 June 2025
HM Treasury has published a policy paper setting out an update to its final position to its 2024 consultation on regulating Buy-Now, Pay-Later (BNPL) products which led to the laying of the draft secondary legislation, The Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025. Under the draft regulation, domestic premises suppliers (DPS merchants), which are businesses who sell, offer to sell or agree to sell goods or offer to supply or contract to supply services in people's homes, are required to seek credit broking permissions to offer BNPL products as a payment option. However, in response to industry feedback, the UK Government has concluded that this requirement may have a disproportionate impact for small businesses and will potentially reduce consumer choice. Consequently, an amending negative statutory instrument to coincide with the BNPL regulation, will be laid to remove this requirement, while maintaining key consumer protections. These include: (i) BNPL lenders will be required to conduct affordability and creditworthiness checks before consumers can use the product; (ii) consumers will be able to raise complaints through the Financial Ombudsman Service and access protections under section 75 of the Consumer Credit Act; and (iii) BNPL lenders authorised by the UK Financial Conduct Authority (FCA) will be expected to comply with Consumer Duty rules, including regular monitoring and review of consumer outcomes. BNPL firms will also be expected to exercise greater oversight of the merchants using their services—including DPS merchants. The UK government and the FCA will continue to monitor the BNPL market and will take any action, if required, to prevent consumer harm. -
House of Lords committee publishes report on barriers to growth and competitiveness
13 June 2025
The House of Lords Financial Services Regulation Committee (the Committee) has published a report, alongside a press release, evaluating the progress made by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in supporting growth in the financial services sector and the wider UK economy. The Financial Services and Markets Act 2023 introduced a secondary objective for the regulators focused on international competitiveness and growth. While the Committee acknowledges that this objective has encouraged regulators to consider the broader impact of their actions, it also finds a prevailing culture of risk aversion by the regulators which undermines the objective. It states this contributes to persistent barriers that limit firms' ability to grow, innovate and compete. -
FCA findings on retirement income advice
11 June 2025
The UK Financial Conduct Authority (FCA) has published an article with findings from a thematic review assessing firms who provide retirement income advice (RIA). The review assessed how effectively firms are providing RIA and the quality of outcomes for consumers entering decumulation, the phase when individuals begin drawing income from their pension savings.
The FCA has identified three key areas as crucial for achieving good client outcomes:- Information collection and record keeping by firms. Firms are expected to gather comprehensive and relevant client information to assess suitability before making recommendations and maintain clear, up-to-date records. While most firms showed a good understanding of clients' objectives and circumstances, several failed to adequately document or collect key information in client files.
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FCA launches IAAT
11 June 2025
The UK Financial Conduct Authority (FCA) has launched the investment advice assessment tool (IAAT) to help personal investment firms assess the suitability of their investment advice and disclosures to consumers (excluding advice on retirement income or defined benefit transfer advice). The IAAT offers a structured methodology for reviewing past advice provided since 3 January 2018, including in response to business complaints or as part of a past business review. The tool is intended not only for the use of investment firms but also professional indemnity insurance providers, compliance or legal consultants and trustees of defined contribution pension schemes. Use of the IAAT is subject to the FCA's licensing agreement, which must be reviewed before access or use. To support firms, the FCA has also published an instruction guide explaining how to use the IAAT and interpret the results of file reviews conducted by the FCA.Topic : Consumer / Retail -
EC call for evidence on savings and investment accounts recommendation
10 June 2025
The European Commission (EC) has issued a call for evidence to gather input on its initiative to develop a European blueprint for savings and investment accounts as part of its recommendation for the savings and investments union (SIU). The initiative aims to encourage retail investors to participate more actively in EU capital markets, aiming to boost long-term returns on their savings while simultaneously enhancing market liquidity and increasing the flow of capital to European businesses. The SIU Communication has emphasised the importance of savings and investment accounts to be based on best practices, with effective models described as being user-friendly, digitally accessible, providing access to a wide range of investment products, offering favourable tax treatment and/or simplified tax compliance, and allowing low or no-cost provider switching. The EC is specifically seeking feedback on these characteristics, as well as their benefits and limitations, to assess their effectiveness in making savings and investment accounts an easy and convenient entry point to capital markets for retail investors pursuing investment opportunities for their savings. The deadline for comments is 8 July, with the recommendation expected to be published in Q3 2025.Topic : Consumer / Retail -
FCA Quarterly Consultation No 48
6 June 2025
The UK Financial Conduct Authority (FCA) has published quarterly consultation paper No 48, accompanied by a press release, inviting feedback on proposed amendments to its Handbook. Key proposals include:- Amending guidance in SUP 6.4 to reflect legislative changes introduced in section 415AA of the Financial Services and Markets Act 2000 (FSMA); the deadline for comments is 14 July.
- Streamlining data reporting by decommissioning certain requirements, including changes to REP009 (consumer buy-to-let mortgage aggregated data) reporting frequency and removing nil return requirements for REP008 (notification of disciplinary actions relating to conduct rules staff other than SMF managers); the deadline for comments is 30 June.
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FCA statement on key considerations for any motor finance redress scheme
5 June 2025
The UK Financial Conduct Authority (FCA) has published a statement outlining key considerations for a potential consumer redress scheme, as part of its review into motor finance commission arrangements, following the pending Supreme Court judgement, expected in July. If upheld, the ruling could expose firms to significant liability for failing to disclose commissions.
Read more.Topic : Consumer / Retail -
FOS consults on interest rates for compensation awards
4 June 2025
The Financial Ombudsman Service (FOS) has published a consultation paper seeking views on the interest rates applied to compensation awards. This follows concerns raised in response to a 2024 joint call for input with the UK Financial Conduct Authority, that the current rate of 8% discretionary interest on top of compensation awards is excessively high.
The consultation paper invites feedback on whether the current 8% interest rate should be: (i) maintained at its current level of 8%; (ii) reduced, with respondents to suggest alternative rates and the rationale behind them; (iii) replaced with a tracker rate linked to the Bank of England (BoE) base rate plus 1%, where the base rate is calculated as an average rate over the period that the money was due until the date redress payment is made (FOS's recommended option); or (iv) replaced with a tracker rate linked to the BoE base rate plus 1%, but where the base rate is calculated as the rate at the point of determination of the complaint. FOS also sets out options for implementation, with its preferred approach to apply the new rate to complaints referred from the date the change takes effect.
In addition, FOS is seeking views on the types of exceptional circumstances where it may be appropriate for an ombudsman to ask a firm not to apply interest e.g., by choosing not to award interest for a certain period to reflect a firm's unreasonable conduct that caused delays during the investigation. In such cases, the ombudsman will be required to clearly explain the reasons for departing from the standard rate. The consultation focuses on pre-and-post determination interests, it does not address any other awards an ombudsman may recommend when making a decision. The deadline for comments on the consultation paper is 2 July. FOS aims to publish a policy statement in September, with the intention of implementing any changes as soon as possible thereafter. -
ESMA calls on platform providers to combat unauthorised financial promotions
28 May 2025
The European Securities and Markets Authority (ESMA) has issued written letters to several major social media and platform companies—including X, Meta, TikTok, Alphabet, Telegram, Snap, Amazon, Apple, Google and Reddit—urging them to take proactive steps against the promotion of unauthorised financial services on their platforms. ESMA suggests that this could be achieved by these companies checking ESMA's register of MiFID investment firms. This initiative seeks to combat the rising number of online scams targeting retail investors, which mislead consumers into engaging with unlicensed firms, resulting in financial losses and lack of trust in the wider financial sector and with digital platforms. ESMA's action is aligned with the recent initiative by the International Organization of Securities Commissions on combatting online harm, highlighting the global nature of the issue of financial misconduct in the digital environment. ESMA has also requested for meetings with these platform providers to develop a coordinated approach to retail investor protection from financial harm.Topic : Consumer / Retail -
FCA Handbook Notice 130
23 May 2025
The UK Financial Conduct Authority (FCA) has published Handbook Notice 130, which outlines updates to the FCA Handbook, including changes for fund managers stemming from the recommendations of the Investment Research Review and feedback to consultation paper CP24/21. These changes allow fund managers to use a joint payment option to pay for investment research and execution services, subject to a set of guardrails, aligning with rules already applicable to MiFID investment firms.
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IOSCO statement on the role of platform providers and combatting online harm
21 May 2025
The International Organization of Securities Commissions (IOSCO) has issued a statement calling for platform providers to take stronger action against rising investment fraud, driven by increased retail investor activity on digital platforms. It encourages platform providers to leverage the IOSCO International Securities and Commodities Alerts Network (I-SCAN)—a database launched in March that identifies unlicensed firms or those engaging in illegal activities—to block, warn against or remove illegal investment offerings from their platforms. In the statement, IOSCO has also highlighted effective measures used in some jurisdictions to combat online harm involving financial misconduct, including due diligence on unauthorised offerings, rigorous enforcement of compliance with terms of service, strong processes for detecting scams and proactive engagement with financial regulators and government authorities, including referrals of fraudulent activity. -
UK Government advances BNPL Regulation
19 May 2025
HM Treasury (HMT) has published a response to its 2024 consultation on regulating Buy-Now, Pay-Later (BNPL) products and laid the draft secondary legislation (Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025), to implement the proposed regime before Parliament. The consultation response is accompanied by an updated webpage and press release. The proposed regulatory framework aims to bring BNPL products under the UK Financial Conduct Authority's (FCA) oversight, ensuring consumers receive clear information, undergo affordability checks, have access to the Financial Ombudsman Service and benefit from the protections of section 75 of the Consumer Credit Act (CCA)—which imposes liability upon a creditor for breaches by a supplier—should something go wrong with their purchases.
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HMT consults on Consumer Credit Act Reform – Phase 1
19 May 2025
HM Treasury (HMT) has published Phase 1 of its two-part consultation on reforming the Consumer Credit Act 1974 (CCA), accompanied by an updated webpage. The proposals aim to modernise the CCA to better align with new financial products and technology while promoting a competitive consumer credit market which supports the growth of the UK economy. The new regime will repeal many of the CCA provisions, to be replaced with rules in the UK Financial Conduct Authority (FCA) Handbook as part of a more flexible, outcomes-based approach. Further details can be found in our client bulletin, Goodbye old friend? HM Treasury consultation on Consumer Credit Act 1974 reform.
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ECON draft report on access to finance for SMEs and scale-ups
14 May 2025
The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report (dated 13 May) and motion for a European Parliament resolution on improving access to finance for SMEs and scale-ups. The motion for a resolution has regard to various recent European Commission (EC) communications, including on the Savings and Investment Union (SIU) and competitiveness compass, and other key publications and reports such as the Draghi report and Letta report.
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EC call for evidence on fostering integration, scale and efficient supervision in single market as part of SIU
8 May 2025
The European Commission (EC) has launched a call for evidence on fostering integration, scale and efficient supervision in the single market as part of its savings and investments union (SIU) strategy. The SIU is a key initiative to improve the way the EU financial system channels savings to productive investments. It seeks to offer EU citizens broader access to capital markets and better financing options for companies, to foster citizens' wealth, while boosting EU economic growth and competitiveness.
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FCA policy statement on new regulatory return for consumer credit firms
7 May 2025
The UK Financial Conduct Authority (FCA) has issued a final policy statement (PS25/3) on consumer credit regulatory returns, published together with an updated webpage. The FCA is introducing a new regulatory return for consumer credit firms engaging in one or more of the regulated activities of credit broking, debt adjusting, debt counselling services and providing credit information services. The rules were previously consulted on in September 2024 in CP24/19 (for further background on this, please see our update). The return aims to collect tailored data on firms' operations, consumer engagement and use of permissions to allow the FCA to achieve its strategic objectives and be more efficient and effective in regulating the sector. The feedback to the consultation was largely positive. Most comments focussed on the scope of the data elements and clarifying the FCA's expectations. In response to the feedback, the FCA has reduced the number of questions in the return by 27% and has made changes to the rules making them clearer and more effective. This includes: (i) removing questions requiring data from lenders; (ii) changing the data required from credit brokers from successful applications to total introductions; and (iii) allowing firms to annualise data for the first reporting period if they do not have all the required data for the whole year. The FCA intends to review and replace returns for firms undertaking other consumer credit activities but will be delaying the implementation of remaining phases. This will reduce the burden on firms and give the FCA time to assess the impact and value of the new return, together with the three new product sales data returns which have already been introduced.Topic : Consumer / Retail -
FCA consultation on simplifying mortgage lending rules
7 May 2025
The UK Financial Conduct Authority (FCA) has published a consultation paper (CP25/11) on simplifying its rules on mortgage lending and increasing flexibility, with an updated webpage and press release. This is the first set of proposals made through the Mortgage Rule Review (MRR), and forms part of the FCA's 5-year strategy. The FCA is proposing to amend its mortgage advice and selling standards, and its affordability rules for mortgage term reductions and remortgaging. The FCA also proposes to retire two pieces of non-handbook guidance (FG13/7 and FG24/2). Broadly, the proposals seek to make mortgage regulation simpler; reducing the different sources firms have to check to understand the regulatory expectations; and will streamline processes, reduce costs and promote competition. For consumers, it is hoped that the changes will make it easier to: (i) engage with mortgage providers; (ii) reduce mortgage terms, lowering the total cost of borrowing and reducing the balance of mortgage debt taken into later life; and (iii) access the cheapest products available when remortgaging. The deadline for comments is 4 June and the FCA aims to publish its policy statement in Q3 2025. In addition, the FCA plans to launch a public discussion on the future of the mortgage market in June, covering: (i) risk appetite and responsible risk taking; (ii) alternative affordability testing and product innovation; (iii) lending into later life; and (iv) consumer information needs.Topic : Consumer / Retail -
Consolidated Q&A on PRIIPs KID updated
5 May 2025
The Joint Committee of the European Supervisory Authorities (ESAs) has updated its consolidated Q&A on the EU packaged retail and insurance-based investment products (PRIIPs) key information document. The consolidated document combines responses given by the European Commission in relation to interpretation of Union law with responses given by the ESAs in relation to the application or implementation of the PRIIPs legislation. The Q&A take into account amendments to the legislation made by Commission Delegated Regulation (EU) 2021/2268. The consolidated Q&A also includes three new Q&As as of 5 May, which relate to: (i) MRM class determination; (ii) performance scenarios; and (iii) calculation of the summary cost indicators.Topic : Consumer / Retail -
FCA consults on further proposals to support Consumer Composite Investments regime
16 April 2025
The UK Financial Conduct Authority (FCA) has published a consultation paper together with a related press release and webpage setting out further proposals on product information for Consumer Composite Investments (CCIs). The consultation paper follows the FCA's December 2024 consultation paper on a new product information framework for CCIs, which closed on 20 March.
The regime will apply in respect of a CCI which is or may be distributed to a retail investor in the UK and seeks to help consumers understand the products they are buying while giving firms flexibility to innovate. The proposals include: (i) removal of the requirement for firms to calculate and disclose implicit transaction costs as part of their CCI cost disclosures; (ii) alignment for CCI products of the pre- and post-sale cost disclosure requirements under the FCA Handbook Conduct of Business (COBS) rules derived from the MiFID Org Reg, to ensure no duplication or conflict in respect of investments within the scope of the CCI rules; (iii) proposed drafting on transitional provisions granting firms flexibility to move across to the new CCI regime when they are ready; and (iv) proposed consequential amendments to the FCA Handbook.
The CCI regime will replace the onshored Packaged Retail and Insurance-Based Investment Products regime. Responses to the consultation paper should be submitted by 28 May 2025. -
UK 2025 Regulatory Initiatives Grid published
14 April 2025
The Financial Services Regulatory Initiatives Forum (the Forum) has published the Regulatory Initiatives Forum Grid (the Grid), with the UK Financial Conduct Authority (FCA) also updating its webpage. The previous Grid was due to be published in May 2024 but was postponed due to the General Election, meaning the Forum published only an interim update in October 2024.
The 2025 Grid sets out the regulatory pipeline for the next 24 months and reflects the reprioritisation that has taken place since the new government came into power. Notable initiatives include:- motor finance commission review: the FCA intends to confirm, within six weeks of the Supreme Court's decision on past use of discretionary commission arrangements by motor finance firms, whether it will propose a redress scheme;
- liquidity risk management in funds: the FCA will consult on refined proposals regarding liquidity risk management in funds to implement FSB and IOSCO guidelines;
- Consumer Composite Investments (CCI) Regulation: the FCA published a second consultation paper on the new CCI regime on 16 April (see our update) and plans to issue a Policy Statement with final rules in late 2025;
Topics : Client Asset Protection, Conduct and Culture, Consumer / Retail, Financial Crime and Sanctions, Financial Market Infrastructure, FinTech, Fund Regulation, MiFID II, Operational Resilience, Other Developments, Payment Services and Payment Systems, Prudential Regulation, Recovery and Resolution, Securities -
FCA findings on multi-firm review of customers in vulnerable circumstances
12 April 2025
The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings of its multi-firm review on retail banks' treatment of customers in vulnerable circumstances involving bereavement and power of attorney (PoA). The webpage is accompanied by a press release. The Consumer Duty requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances. The multi-firm review makes a series of findings, including on:- policies and procedures: the FCA calls for firms to make guidance for staff accessible and policies to be clear that staff should adapt to customers' needs and recognise when matters should be escalated.
- identifying and responding to customer needs: the FCA encourages firms to identify signs of vulnerability and seek information from consumers to address their needs. The FCA also wants firms to establish feedback loops to enable continuous improvement of staff and processes based on previous errors.
Topic : Consumer / Retail -
FCA findings on multi-firm review of trading apps
11 April 2025
The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings from its multi-firm review of trading apps, together with a press release. The FCA notes that this is a growing sector allowing more retail investors easier access to a wider range of investments which can help to improve financial lives. Some trading apps, though, offer high-risk investments that were traditionally aimed at wholesale markets. The FCA's review made a series of findings, including on:- business models: trading app firms operate in various ways. The FCA stresses that regulated firms must ensure they understand the Handbook's requirements for manufacturers and distributors, regardless of their business model, and that firms with overseas affiliates must clearly inform customers that their trading agreement is with the overseas entity and disclose any potential loss of asset protection.
- target markets: firms are likely to be both manufacturers of a trading app and distributors of products sold on it, and therefore should consider the relevant rules under PRIN 2A.3 and PROD 3 on the need to identify a target market for the products and services they manufacture and distribute. The FCA found some firms had not specified their target market at a sufficiently granular level and, in some cases, offered lower-risk and less complex products alongside more complex or high-risk ones.
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UK FCA concludes consumer investment policy sprint
10 April 2025
The UK Financial Conduct Authority (FCA) has announced the conclusion of its six-week policy sprint aimed at improving consumer investment decisions to support its key objective of supporting growth. With only 9% of UK consumers taking regulated financial advice last year, the sprint focused on developing targeted support to bridge the gap between bespoke financial advice and guidance. For the first time, the sprint tested future rules before formal consultation involving industry, consumer groups and other members of the regulatory family, such as the Financial Ombudsman Service and the Information Commissioner's Office, with its aim to accelerate final policy proposals by June. The sprint is part of the work being carried out in relation to the Advice Guidance Boundary Review and other initiatives aiming to change how consumers interact with retail investments.Topic : Consumer / Retail -
UK FOS Plans and Budget published for 2025/2026
3 April 2025
The UK Financial Ombudsman Service (FOS) has published its plans and budget for 2025/2026, together with an accompanying press release. The FOS notes that there has been more uncertainty than usual over the last year, and this will continue into the next year. This is, in particular, due to the ongoing legal and regulatory developments in relation to motor finance commission complaints and the introduction of a fee for certain professional representatives, which the FOS expects will lead to a volume reduction as it will receive fewer cases without merit. In addition, the FOS expect disputed transactions cases in relation to fraud and scams to remain high, and an increase in respect of volumes of complaints in relation to authorised push payments. Despite the high level of complaints being referred, the FOS is not raising the case fees for businesses, and will be maintaining the reduced compulsory and voluntary jurisdiction levies. The FOS also confirms that it will carry out work over the course of the coming year to understand the impact of the introduction of regulatory rules in relation to deferred payment credit (previously referred to as buy now, pay later), which the FCA has said that it will consult on in the upcoming 2025/2026 period. -
UK FCA consultation on loan to income flow limit in mortgage lending
3 April 2025
The UK Financial Conduct Authority (FCA) has published a consultation on proposed amendments to the Prudential Regulation Authority's (PRA) rulebook and FCA guidance on the de minimis threshold for the loan to income flow limit in mortgage lending (CP25/6). The consultation follows the UK Financial Policy Committee's recommendation in November 2024 that the threshold be raised so that the loan to income flow limit would only apply to lenders extending residential mortgages above GBP150 million (up from GBP100 million, the current threshold) per four rolling quarters. The changes proposed amend the relevant references to the GBP100m figure used in the PRA rulebook and the FCA guidance and make some other minor consequential changes. The deadline for comments is 8 May.Topic : Consumer / Retail -
UK FOS new charging structure applied
1 April 2025
The UK Financial Ombudsman Service (FOS) has updated its webpage confirming that the new charging structure, which includes charges for professional representatives referring cases, now applies. The changes have been made in accordance with the two implementing instruments (FOS 2025/1 and FOS 2025/2) whose relevant provisions came into force on 1 April. The rules have been introduced to make the funding arrangements for the FOS fairer, and to encourage professional representatives – including authorised claims management companies and certain legal professionals – to give complaints more consideration before deciding to refer them to the FOS. As detailed in the policy statement published on 7 February, professional representatives can now refer up to ten cases for free each financial year. Subsequently, they will be charged £250 for each additional case but will receive £175 back in credit if the case outcome is in favour of the consumer. In terms of the charges to be paid by the firm against whom the complaint is made, if the complaint is not upheld or withdrawn, the firm's fee will be reduced to £475 instead of £650 (these figures being subject to any group charging arrangement). Individuals, families, friends, charities, and voluntary organisations who bring cases directly to the FOS will continue to be able to use their service for free. -
UK Supreme Court opens three-day hearing on motor finance commission complaints
1 April 2025
The three-day hearing of the significant Supreme Court case involving motor finance commission complaints has begun. The case involves the conjoined appeals involving two lenders who are challenging the decision of the Court of Appeal that a car finance broker could not lawfully receive a lender's commission without first obtaining the customer's full informed consent to the deal. This has the potential to impact other sectors that use intermediaries remunerated by commission, extending its implications beyond the motor finance industry. The UK Financial Conduct Authority (FCA) has previously confirmed that if, taking into account the Supreme Court's decision, it concludes that customers have lost out from widespread failings by car finance providers, it is likely the FCA will consult on an industry-wide redress scheme. This would mean that the usual complaint process would not apply to those consumers in scope of the scheme, and the onus would be on providers to review whether or not customers had lost out and, if so, offer compensation in accordance with rules set by the FCA. The FCA has also published written submissions to the Supreme Court including a statement that the Court of Appeal went too far in effectively treating motor dealer brokers as generally owing fiduciary duties to consumers.Topic : Consumer / Retail -
UK BoE consults on FSCS depositor protection and new resolution tool
31 March 2025
The UK Bank of England (BoE) has published its consultation paper CP4/25 which contains proposals for depositor protection and the new resolution tool proposed by the Bank Resolution (Recapitalisation) Bill. The consultation paper was published alongside relevant appendices and a press release.
The first part of the consultation proposes increasing the FSCS deposit protection limit from £85,000 to £110,000, and increasing the limit applicable to temporary high balance claims from GBP1 million to GBP1.4 million. The increases take into account the effect of consumer price inflation since the limit was last updated in 2017, with the UK Prudential Regulation Authority (PRA) revising the figure to a round number for memorability, with the aim of increasing depositor awareness and confidence in the deposit protection framework. The consultation also proposes changes to the PRA's supervisory expectation, reinstating that firms should ensure their systems are able to accommodate limit changes at short notice.
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Changes to UK Code of Broadcast Advertising relating to unregulated investments
26 March 2025
The Broadcast Committee of Advertising Practice (BCAP), author of the UK Code of Broadcast Advertising (the BCAP Code), has announced that following a consultation, it was introducing changes to Section 14 of the BCAP Code (Financial products, services and investments) to clarify the scope of its restriction of advertisements (ads) for unregulated investments to specialised financial channels and programming. The BCAP Code includes a rule that restricts ads for certain types of complex financial products to specialised financial channels, stations and programming, meaning that such ads cannot be broadcast on mainstream TV or radio to a general audience. The amendment is intended to clarify the scope of the existing restriction on ads for investments unregulated by the FCA, to ensure that it applies in practice to unregulated "investments" that meet the likely consumer understanding of that term. It will remove the risk of what is seen as an inadvertent application of the restriction to unregulated products that technically fall within the definition of investment activity set out within the Financial Services and Markets Act 2000 (as reflected in the Code section), but that are not in line with a layperson's understanding of an investment, and that are not compatible with the type of risky financial products from which restrictions were intended to protect general broadcast audiences. The changes take effect immediately, but BCAP are mindful of the need to avoid unintended consequences of amending the wording of rules and to ensure that changes are effective. As such, the amended rules will be subject to review after 12 months.Topic : Consumer / Retail -
FCA feedback statement on rule review in response to consumer duty
25 March 2025
The Financial Conduct Authority (FCA) has published a feedback statement on immediate areas for action and further plans for reviewing FCA requirements following introduction of the Consumer Duty. It follows the FCA's call for input to which it received 172 responses. Most respondents supported simplification of requirements in principle, but opinions varied on the approach and timeline.
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European Commission communication on the Savings and Investments Union
19 March 2025
The European Commission has unveiled its strategy for the Savings and Investments Union (SIU), an initiative to improve the way the EU financial system channels savings to productive investments. Alongside the communication, the Commission also published an accompanying press release and questions and answers. A factsheet includes a summary timetable for key proposed measures. In Q2 2027, the Commission will publish a mid-term review of the overall progress in achieving the Savings and Investments Union.
Implementing the SIU requires a range of policy measures, which are grouped under four headings:- Citizens and savings—encouraging and incentivising retail customers to hold more of their savings in capital market instruments.
- Investments and financing—promoting investment in equity and certain alternative assets, namely venture capital, private equity and infrastructure.
- Integration and Scale—removing sources of fragmentation in EU capital markets, whether regulatory, supervisory or political, to allow for the possibility of market-driven consolidation.
- Efficient Supervision in the Single Market—harmonised supervision is an objective of the SIU. All financial market operators should receive the same supervisory treatment irrespective of their location across the Union.
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Global alert portal launched to help reduce retail investment fraud
18 March 2025
The International Organization of Securities Commissions (IOSCO) has announced the launch of a new alert portal, which is aimed at strengthening the global fight against retail investment fraud. The International Securities & Commodities Alerts Network (I-SCAN) allows investors, online platform providers, banks and institutions to check if a financial regulator has a suspicious activity flag for a particular company or potential investment. I-SCAN is part of IOSCO's roadmap for retail investor online safety, which sets strategic initiatives for safeguarding retail investors worldwide from fraud, excessive risk and misinformation as digital trading and social media reshape the retail financial market. -
UK FCA call for evidence on interest rate 'stress test' rule for mortgage lenders
17 March 2025
The UK's Financial Conduct Authority (FCA) has updated its webpage on the interest rate 'stress test' rule for mortgage lenders, and issued a call for evidence on the impact of the FCA handbook rule on considering the effect of future interest rate rises in the context of mortgage lender affordability assessments. The rule, MCOB 11.6.18R, requires mortgage lenders, when assessing affordability in accordance with MCOB 11.6.5, to take into account the impact of likely future interest rate increases on affordability for at least five years, except in the case of contracts of less than five years (in which case the duration of the contract should be used) and in the case of contracts which have a fixed interest rate for an initial period for at least five years. The rule does not prescribe a specific rate that lenders should use for testing affordability, but does require lenders to assume that interest rates will rise by a minimum of 1% over the first five years. The rule is being reviewed as part of the broader review of the mortgage rules which follows the FCA's letter of 16 January to the UK prime minister, confirming (among other things) that it would simplify responsible lending and advice rules for mortgages. The deadline for responses is 11 April.Topic : Consumer / Retail -
FCA statement on motor finance review next steps
11 March 2025
The UK Financial Conduct Authority (FCA) has published a statement informing firms, consumers and stakeholders of next steps in its review of the past use of motor finance discretionary commission arrangements.
The Court of Appeal handed down its judgement in three related motor finance appeals on 25 October 2024, finding that there was a fiduciary relationship between the dealer and the consumer, raising the prospect of widespread liability among motor finance firms that failed properly to disclose commissions to customers. The Supreme Court will hear an appeal against the Court of Appeal's judgement on 1 to 3 April. The FCA's statement confirms that, if it concludes that motor finance customers have lost out (taking into account the Supreme Court's decision), it is likely to consult on an industry-wide redress scheme. Firms would be responsible for determining whether customers had lost out due to their failings, but the FCA would set rules that firms must follow under the scheme and introduce checks to ensure they do. The FCA will confirm within six weeks of the Supreme Court's decision whether it is proposing a redress scheme and, if so, how that would be taken forward. It may also consult separately on changes to its rules, depending on the Supreme Court's decision.Topic : Consumer / Retail -
FCA publishes review of consumer support outcomes
7 March 2025
The UK Financial Conduct Authority (FCA) has published the findings of its review of firms' approaches to the consumer support outcome of the Consumer Duty. The FCA identified a range of good practices, including keeping customers' needs front and centre, proactively understanding the needs of customers, building a culture that delivers good customer support outcomes and monitoring whether customers are receiving the support they need. The FCA also identified areas for improvement, including the need to: (i) align support processes to the target market; (ii) make post-sale support as accessible and effective as pre-sale support; (iii) embed a culture that is in step with the Consumer Duty; and (iv) monitor a broader range of outcomes about effective customer support.
These findings are intended to help firms understand FCA expectations around consumer support outcomes under the Consumer Duty so that they can continue evolving their approach accordingly.Topic : Consumer / Retail -
FCA publishes findings from review of firms' treatment of vulnerable customers alongside good practice and areas for improvement
7 March 2025
The UK Financial Conduct Authority (FCA) has published the findings from its review of the treatment of customers in vulnerable circumstances. Drawing on several sources, including research commissioned by the FCA (and published for the first time with this review), the FCA has evaluated how firms are supporting vulnerable customers, as well as the appropriateness of the FCA's existing FG21/1: "Guidance for firms on the fair treatment of vulnerable customers" in light of the Consumer Duty. The FCA found that FG21/1 is still useful and important under the Consumer Duty and is not revising its guidance or introducing new requirements. It noted that the Consumer Duty had driven a renewed focus on delivering good outcomes for vulnerable customers but that some areas for improvement remain.
In response to industry feedback that more case studies would help support firms, the FCA has published a series of examples to highlight good practice and areas for improvement. Going forward, the FCA encourages firms to make use of the good practice and areas of improvement and will continue to engage with industry to support ongoing improvement especially in areas that firms find more challenging.Topic : Consumer / Retail -
UK FCA speech on supporting economic growth
27 February 2025
The UK Financial Conduct Authority (FCA) has published a speech by Nikhil Rathi, chief executive, on supporting economic growth. Mr Rathi notes that from 27 February, the FCA no longer expects firms to have a consumer duty board champion, meaning boards can decide for themselves whether or not to have one. To reflect the same, the FCA has also updated its webpage on consumer duty information for firms. Separately, the FCA will move efficiently on the 50 or so growth proposals it made to the Prime Minister its response to the call to support growth. The FCA will also focus on their joint Call for Input with the Financial Ombudsman Service published in November 2024 on how complaints and redress mechanisms work, by reviewing the framework to ensure even tighter alignment, and clearer early warnings when significant issues are emerging.
Read more.Topic : Consumer / Retail -
UK FCA multi-firm review findings on suitability reviews
24 February 2025
The UK Financial Conduct Authority (FCA) has published a new webpage setting out their findings of whether financial advisers are delivering the ongoing advice services that consumers have paid for. The review focused on delivery of suitability reviews as firms generally included these as part of their ongoing advice service. The FCA found that in 83% of the cases where suitability reviews were promised, they were delivered. Firms reported that in a further 15% of cases, clients had either declined the review or not engaged with the firm's request for the information needed to conduct a review. There were fewer than 2% of cases where firms reported they had made no effort to deliver the suitability review to clients. However, the FCA notes that there were differences in the results across the firms surveyed and the population surveyed was not a representative sample. Additionally, a small subset of firms was not readily able to provide data for all of the years the FCA requested.
Read more.Topic : Consumer / Retail -
Financial Ombudsman Service policy statement on charging fees to claims management companies and other professional representatives
7 February 2025
The Financial Ombudsman Service (FOS) has published a policy statement on its new fee rules regarding complaints that are referred to it by certain claims management companies (CMCs) and other professional representatives acting on behalf of complainants. The rules are aimed at encouraging CMCs to consider the merits of complaints more diligently before referring them to the FOS. The FOS will introduce a maximum £250 case fee for each complaint a CMC refers to it exceeding the annual free case provision of ten per financial year. This is to reflect a proportionate contribution to the costs incurred by the FOS, ensuring adequate resources continue to be available to resolve disputes quickly. However, there will be a £75 minimum case fee for all cases referred by CMCs, regardless of the outcome of the complaint, in the interest of proportionality and fairness. If the complaint is upheld in favour of the complainant, the CMC will receive £175 credit. However, if the case outcome is not in favour of the complainant, then the respondent firm's case fee will be reduced to £475, from £650 for the current financial year. Under the new rules, this will mean that the overall aggregate charge from both parties will be £725 for a single complaint, whatever the outcome of the case. In relation to late payment of case fees, which was previously a £250 fixed fee plus interest, this will be replaced with a variable charge up to 25% of the outstanding debt, based on the cost and effort required to recover it. The rules will come into force on 1 April and will apply in relation to complaints referred to the FOS on behalf of complainants on, or after, this date.Topic : Consumer / Retail -
UK Financial Conduct Authority portfolio letter on strategy for mortgage intermediaries
January 30, 2025
The UK Financial Conduct Authority has published a portfolio letter on its strategy for mortgage intermediaries setting out the areas of regulatory focus for the next two years. The FCA's overarching focus is on embedding the Consumer Duty. Several key areas where this is most relevant for mortgage intermediaries are identified, including: (i) quality of advice and unsuitable products – particularly in the context of customers facing financial circumstances or vulnerability, meaning firms must do more to consider customers' personal and financial circumstances and financial objectives; (ii) high pressure selling and ancillary products – the FCA intends to assess how firms are identifying and managing conflicts of interest that may arise; (iii) excessive fees and fair value – in particular, the FCA highlights the relevance of its Consumer Duty guidance and recent update on good and poor practice in fair value assessments; and (iv) financial promotions – the letter emphasizes the importance of featuring the risks of secured lending prominently alongside the promoted benefits. The letter also notes the FCA's other expectations in relation to dormant appointed representatives, trading names and conditional selling.Topic : Consumer / Retail -
Permission to appeal granted against Financial Ombudsman Service decision concerning motor finance discretionary commission arrangements
January 27, 2025
Barclays Partner Finance has been granted permission to appeal against the Administrative Court's judgment in R (Clydesdale Financial Services Ltd) v Financial Ombudsman Service Ltd [2024] EWHC 3237 (Admin). Permission was granted by the Administrative Court on the order of Kerr J dated December 24, 2024, and the Court of Appeal will hear the appeal by December 8, 2025. In the judgment under appeal, the Administrative Court found in favor of the FOS and dismissed a claim brought by Clydesdale Financial Services Ltd (which trades as Barclays Partner Finance) for judicial review of an ombudsman's decision to uphold a complaint in relation to a discretionary commission arrangement in a motor finance agreement.Topic : Consumer / Retail -
UK Financial Conduct Authority responds to Government call for regulators to support growth
January 17, 2025
The Financial Conduct Authority has published a letter (dated January 16, 2025) from Nikhil Rathi, FCA Chief Executive, sent to the Government, setting out its work to ensure that it is supporting the Government's U.K. growth mission. The letter responds to Government's December call for regulators to support growth. In the letter, the FCA explains that to achieve the vast reforms, the FCA will need to take greater risks and prioritize resources. The Government's support and acceptance of this approach is required, including an acceptance that there will be failures because it will not be possible to prevent all harm under an approach based on risk-based choices. The FCA emphasizes that this acceptance needs to be shared across all accountability mechanisms, including in Parliament, and states that metrics for "tolerable failures" within the overall system would assist.
The areas addressed in the letter include:- unlocking capital investment and liquidity: in addition to the planned reforms for the wholesale markets, the FCA will fast-track a review of capital requirements for specialized trading firms to improve liquidity;
- accelerating digital innovation to enhance productivity: the FCA makes a number of suggestions on how to do this including introducing a new open banking payment method and developing open finance, the removal of the £100 contactless payment limit to enhance consumer flexibility and level the playing field with digital wallets. The FCA also suggests that government action could help by introducing digital identity authentication, enhancing the quality of the Companies House database to reduce costs for business, and digitalizing court systems to reduce delays;
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UK Financial Conduct Authority responds on motor finance judgment
January 17, 2025
The Financial Conduct Authority has published a letter addressed to the House of Lords Financial Services Regulation Committee on motor finance commission specifically addressing the court of appeal judgement in Johnson v FirstRand Bank Ltd (London Branch) (t/a MotoNovo Finance) [2024] EWCA Civ 1282. The letter responds to a letter the FCA received from the Committee in December.
In the letter, the FCA sets out the relevant FCA rules and principles concerning both discretionary and fixed commissions, both prior to and following the amendments introduced in 2021. The FCA also confirms that it did not seek legal advice on the specific issue of the relevance of disinterested or fiduciary duties with regard to formulating (and amending) the rules providing for commission disclosure and the ban on discretionary commission arrangements. The FCA concludes by explaining that once the Supreme Court has settled the law in this area, it will consider if any intervention is needed, which will include reviewing its rules to take account of the court's judgment.Topic : Consumer / Retail -
New UK Financial Conduct Authority webpages on consumer redress liabilities
January 14, 2025
The U.K. Financial Conduct Authority has published two new webpages relating to consumer redress liabilities. The first webpage provides an update for firms on what they should and should not do to tackle polluting behavior and how to meet their redress liabilities. Polluter behavior is described as when a firm or individual takes steps that leave behind potential or actual redress liabilities generated in the course of their regulated activities. To prevent and address this behavior, the FCA expects firms to have adequate financial resources to be able to provide redress as part of complying with Principle 4 (Financial prudence) and the threshold conditions. While there will be occasions when firms are genuinely unable to meet their liabilities, they should not seek to leave their liabilities behind and should provide robust reasons for the actions and decisions they intend to take and be prepared to evidence those. The webpage provides further information on what firms should expect from the FCA if they are required to provide consumer redress, which includes having to take further action to avoid polluter behavior or seek a voluntary requirement that aims to mitigate ongoing harm to consumers or markets. The second webpage explains how to identify and report polluting behavior. The FCA provides six main examples of polluting behavior: (i) basic phoenixing; (ii) lifeboating; (iii) fronting; (iv) sales at an undervalue; (v) restructuring; and (vi) proceeds of sale not being applied to redress. Regulated firms, financial advisers, compliance firms and other financial advice organizations are encouraged to speak out and report to the FCA any firm or individual suspected of providing poor advice, products or services, or attempting to phoenix to avoid their liabilities to consumers. Firms are also expected to carry out thorough due diligence and compliance checks on all advisers they recruit to ensure no poor advice has been given previously.Topic : Consumer / Retail -
Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025 published
January 14, 2025
The Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025 have been published, alongside an explanatory memorandum. The Regulations amend the Financial Services and Markets Act 2000 to provide for the U.K. Financial Conduct Authority's supervision and enforcement of requirements imposed by the designated activity regime. The Regulations enable the FCA to supervise designated activities by gathering information and launching investigations into persons carrying out designated activities, and to enforce its designated activity rules by publicly censuring or imposing financial penalties on persons that breach them. It also sets out the procedures that will apply to the giving of directions by the FCA relating to designated activities. In the first instance, the Regulations apply this supervision and enforcement framework to the Consumer Composite Investments (Designated Activities) Regulations 2024 and the Short Selling Regulations 2025. The stated intention is that the framework would also be extended to any future designated activities. The Regulations were made on January 13, 2025, and came into effect on January 14, 2025. -
UK Financial Conduct Authority portfolio letter for credit reference agencies and credit information service providers
January 10, 2025
The U.K. Financial Conduct Authority published a portfolio letter setting out its supervisory strategy for credit reference agencies and credit information service providers. In the letter, the FCA sets out its priority areas for the next two years, which relate to:- embedding the consumer duty—the FCA has concerns that the process of raising a data dispute or complaint can be difficult for consumers to navigate. As such the FCA intends to undertake work to understand complaint practices across the portfolio and what actions firms have taken under the duty to improve outcomes. The FCA will also continue to assess how firms are meeting the price and value outcome;
- cyber resilience—firms should have a forward-looking outlook and remain vigilant to technological advances and emerging threats to be able to anticipate potential system vulnerabilities. Firms should review the systems and controls, oversight, and monitoring arrangements that they currently have in place to ensure they are sufficient to identify weaknesses and vulnerabilities;
Topic : Consumer / Retail