Context
The Regulatory Initiatives Grid, from the Financial Services Regulatory Initiatives Forum, sets out the regulatory pipeline. It is published so the financial services industry and other stakeholders can understand and plan for the timing of the initiatives that may have a significant operational impact on them. Contributors to the Regulatory Initiatives Forum include the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), HM Treasury (HMT), the Information Commissioner’s Office (ICO) and the Bank of England (BoE). The Grid has been published as an interactive dashboard web-page, as a .pdf document, and in a spreadsheet format.
Key points to note
The key initiatives noted in the Grid are:
- Ban on cold calling for consumer financial services and products (HMT) – Announced in the Fraud Strategy in May 2023, the Government will extend the pensions cold calling ban to cover cold calling for all consumer financial services and products. The consultation was open from 2 August – 27 Sept 2023, with the Treasury due to publish the outcome by the end of the year.
- Employment guidance (ICO) – New guidance on data protection and employment covering a wide range of topics such as employee surveillance, health data, job applications, TUPE, HR records etc.
- New brief guidance on Information Sharing in Mental Health Emergencies at Work will be published in due course.
- New TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) draft guidance is expected to be published for public consultation in December 2023.
- Regulatory framework for approval of financial promotions (FCA/HMT) – The FCA policy statement PS23/13 was published on 12 September 2023. The gateway to enable firms to approve the financial promotions of unauthorised firms opened for applications on 6 November 2023,
- Key point to note: The application window for firms currently approving financial promotions for unauthorised firms ends on 6 February 2024. From 7 February 2024, the regime will be fully in force and firms that have not applied will no longer be able to approve financial promotions (subject to exemptions) until they have received approval.
- Key point to note: Firms that approve financial promotions for their Appointed Representatives are exempted from this regime.
- Post-implementation review of the Guidance for firms on the fair treatment of vulnerable customers (FCA) – The FCA is conducting a post-implementation review, to test the effectiveness of firm implementation of the Guidance and how this has impacted on outcomes for customers in vulnerable circumstances. A final report is expected by the end of 2024.
- Expansion of the dormant assets scheme (FCA) – This is the second phase of amendments to FCA rules that will enable investment firms and firms holding client assets to transfer dormant assets when Reclaim Fund Limited expands its scheme. A Consultation was published Q2 2023, with Policy Statement and final rules expected Q2 2024.
- Complaints reporting review (FCA) – The FCA is developing proposals to improve complaints reporting to enable it to better assess whether firms are putting things right themselves. This will also help it spot issues earlier and support its assertive interventions. Stakeholder engagement and consultation on any proposed changes are expected during 2024.
- Consumer Duty (FCA) – The Consumer Duty comes into force for closed products on 31 July 2024.
- Gibraltar Authorisation Regime (HMT) – The Gibraltar Authorisation Regime (GAR) was introduced in the Financial Services Act 2021. A framework of secondary legislation is needed to operationalise the GAR, which is currently under development.
- Review of the Senior Managers and Certification Regime (FCA/HMT/PRA) – HMT Call for Evidence was published in March 2023, with the FCA and PRA issuing a Discussion Paper in March 2023. A Consultation Paper is to be published Q2 2024.
- Diversity and Inclusion in Financial Services (FCA/PRA) – Policy proposals aimed at supporting progress on improving diversity and inclusion across the financial sector. Consultation Paper published in September 2023, with a Policy Statement due in H2 2024.
- Key point to note: Solo regulated firms with fewer than 251 employees and Limited Scope firms will have fewer requirements to adhere to (refer to the table at 3.11 on page 16 of the Consultation).
- Oversight of Critical Third Parties (BoE/FCA/PRA) – A joint Discussion Paper was published in July 2022, following the Treasury’s publication of a Policy Statement, which set out proposals for mitigating risks from critical third parties to the finance sector. Measures relating to critical third parties were included in the 2023 Financial Services and Markets Act, with the regulators planning to consult on proposals relating to Critical Third Parties in by the end of 2023.
- Incident and Outsourcing and Third Party Reporting (BoE/FCA/PRA) – A Consultation is planned for H2 2024, with the purpose of any resulting policy introducing clarity regarding the information firms should submit when operational incidents occur; and collecting information on firms’ outsourcing and third party arrangements, to manage the risks they may present to the regulators’ objectives, including resilience, concentration and competition risks.
- Regulation of Buy Now Pay Later (HMT/FCA) – The Treasury is considering stakeholder feedback to its consultation paper and will publish a consultation response setting out next steps when it is finalised. Secondary legislation to bring BNPL into the perimeter will be laid when Parliamentary time allows.
- Insurance Mediation and Distribution Directives (FCA/HMT) – In September 2023, the FCA consulted on rules transferring the provisions of IDD currently in secondary legislation to the FCA Handbook. Final rules are due to be published in December 2023, to come into force at the time the legislation is repealed (expected end March 2024).
Next actions
None – for information and awareness.