Welcome to the UKGI weekly regulation update service for Aviva ABC brokers

Context

The FCA has published Policy Statement PS25/23 confirming its final guidance to tackle serious non-financial misconduct in financial services.  In July, the FCA changed its COCON rules to more closely align the rules for banks and ‘non-banks’ (so all firms).  At the same time, the FCA asked firms if they wanted additional guidance to help them take action – and said it would only publish this if they did. 95% of those who responded to the consultation agreed, so the FCA is now providing this final guidance.

Key points to note and next actions

• The FCA is amending its Code of Conduct (COCON) sourcebook to explain how NFM can be a breach of the conduct rules. This will make it easier for firms to interpret and consistently apply FCA rules.  The FCA also confirms how NFM forms part of the Fit and Proper test for Employees and Senior Personnel (FIT).
• There is a new COCON 1.3 (9 pages and 17 items of Guidance) and a new COCON 1 Annex 2 (8 pages and 21 items of Guidance, including several flowcharts).
• There are new items of Guidance in COCON 4.1 and 4.2, and a new COCON 4.3 (with an Annex) providing 48 new items of Guidance over six pages.
• In relation to fitness and propriety, there are 15 new items of Guidance added to FIT 1.3, with other additions made to FIT 2.1 and 2.2.
• ‘Non‑financial misconduct’ includes a wide range of behaviour, essentially any misconduct not of a clearly financial nature. It is not possible to list all types of misconduct that might amount to a breach of COCON (or of fitness standards in FIT), as each case requires individual judgement based on its specific circumstances.
• The FCA used the words ‘bullying’ and ‘harassment’ in the Consultation Paper as shorthand terms to describe unwanted conduct that has the purpose or effect of violating a colleague’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them.
• The guidance is designed to help firms make fair, consistent decisions when standards are breached and will help promote healthy and inclusive workplace cultures.
• The guidance covers how firms can apply FCA rules on minimum standards of behaviour for financial services employees, and the factors they should take into account when assessing whether someone is fit and proper for their role.
• The FCA has made some small changes to address the main areas of feedback:
• New examples and flow charts to support the application of the new rule.
• Clearer alignment with employment law.
• Clarification that managers’ accountability is relative to their knowledge and authority.
• Clarification that firms are not expected to investigate trivial or implausible allegations or breach privacy law.
• The guidance will come into force on 1 September 2026 at the same time as the new rule at COCON 1.1.7FR. See Chapter 2 of CP25/18 (PDF) for more information on the rule

Context

The FCA has updated its Pure Protection Market Study web page and has published consumer research quantitative outputs.  The consumer research was undertaken by The Big Window following a competitive tender process. It investigates consumers’ perceptions and experiences of buying, holding, and claiming on pure protection products.  The FCA will combine these quantitative findings with its qualitative research and publish them in a full consumer research report alongside its interim report.

Key points to note and next actions

• The FCA expects to publish its interim report at the beginning of 2026.
• The research findings include ‘key take-out’ commentary in relation to the landscape; triggers, needs, and cover; the sales process (last 12 months); and maintaining engagement.
• The report provides data and commentary on:
  • Product holdings and reviews.
  • Knowledge and understanding of cover and key product features – generally and by product.
  • Triggers/behaviour prior to purchase.
  • The sales process.
  • Choosing a policy & provider.
  • Reflecting on choices
  • Spotlight on vulnerability

Context

The FCA has fined Nationwide Building Society £44m for inadequate anti-financial crime systems and controls between October 2016 to July 2021.  Nationwide is the world’s largest building society. By 1 July 2021 it had approximately 18 million UK customers and £170 billion in customer deposits across its products. It held a 10%

market share of UK current accounts, which had grown significantly over the previous 4½ years from approximately 7%.

Key points to note and next actions

Nationwide would have been fined £62,969,297, but it agreed to resolve these matters and so qualified for a 30% discount under the FCA’s processes.

During this period, Nationwide had ineffective systems for keeping up-to-date due diligence and risk assessments for all its personal current account customers and for monitoring their transactions. 

Nationwide was also aware that some of those customers were using their personal accounts for business activity, in breach of its terms. Nationwide did not offer business current accounts at this point, so did not have the right processes in place to manage the financial crime risks from business activity.   

This meant Nationwide was unable to effectively identify, assess, monitor or manage the money laundering risks among its personal current account customers. It also meant Nationwide did not have an accurate picture of its customers who presented a higher risk of financial crime.

In one serious case, Nationwide missed opportunities to identify a customer using personal current accounts to receive fraudulent Covid furlough payments. The customer received 24 payments totalling £27.3m over 13 months, with £26.01m of this deposited over 8 days.  HMRC recovered £26.5m, but approximately £800,000 remains unrecovered.

Context

The FSRIF has published the minutes of its 3 November 2025 meeting, which focused on the content and publication of the 9^th edition of the Regulatory Initiatives Grid.

Key points to note and next actions

• The Forum discussed several strategic topics including the total number of initiatives to be included in the Grid, the timing and sequencing of initiatives, and the growth agenda. Forum member noted that the total number of initiatives was likely to reduce in this edition.
• The Forum discussed the narrative foreword that accompanies the Grid. It was agreed it would be helpful to demonstrate how regulators are supporting growth and innovation, along with discussing other considerations in the wider regulatory environment including consumer protection and economic stability.
• The Forum noted that the Autumn Budget would take place in late November and agreed to publish the Grid after this in December.
• The Forum delegated authority to the Co-chairs, Nikhil Rathi and Sam Woods, to approve the Grid prior to publication and subject to the recommendations made by members.
• The Forum agreed that its purpose as set out in the Terms of Reference remained appropriate.

Context

In this issue, FOS highlights its Plans and Budget Consultation for 2026/27 financial year and its online guidance on banking and payments complaints. FOS also shares its Business Support Hub opening hours over the Christmas and New Year period.

Key points to note and next actions

• The Plans and Budget Consultation sets out ambitious targets for case resolution and service improvements for the 2026/27 financial year.  The consultation is open until 21 January 2026.
• The Business Support Hub will have different opening times over the Christmas and New Year period – from 22 December 2025 to 2 January 2026

Context

Companies House has published some ‘signposting’ guidance in relation to identity verification.  Some customers are contacting Companies House to get help with completing identity verification and filing their confirmation statement.  For more information about how and when to verify your identity, go to the identity verification guidance collection on GOV.UK.

Key points to note and next actions

If you still need help, Companies House provides some guidance under the following headings to help you before contacting them:

• Check when you need to file your company’s confirmation statement.
• Verifying your identity as a director or a person with significant control (PSC).
• How to find your Companies House personal code.
• Accessing your WebFiling or Companies House account.

Context

EIOPA has published a factsheet on consumer trends in insurance and pensions in Europe during 2025 and produced a heatmap with key findings.  While this information relates to the European market, there can often be correlation found with the UK market.

Key points to note and next actions

The heatmap emphasises key trends across the European insurance and pensions sectors in the following areas:

• Claims management: While claims management issues have been a persistent concern, their materiality is now perceived as more significant than in prior years, warranting continued attention and monitoring.
• Digitalization distribution trends: As digital channels continue to enhance customer experience, they also introduce new risks and challenges, including consumer concerns and transparency issues.
• Atypical distribution models entering market: The growth of atypical distribution models offering insurance products with potentially detrimental features poses an increasing risk to consumers and the market.
• Value for Money in insurance and pensions: Improvements are beginning as a result of sustained supervisory initiatives. Nevertheless, certain concerns persist, and new risks are emerging, which necessitate ongoing monitoring and attention.
• Protection gap (Health and Natural Catastrophe (Nat Cat)): Although Health and Nat Cat insurance face challenges, including rising healthcare costs and an increase in extreme weather events, risks remain stable, with consistent coverage levels and similar issues continuing being reported.

The heatmap takes into account selected data and relevant supervisory judgement and represents actual findings which have been identified at the European level. The findings of the report are underpinned by various data sources, including the results of EIOPA’s Eurobarometer survey.