Context
The FCA has issued its Quarterly consultation paper No. 30, CP20/23 which highlights this quarter’s proposed Handbook changes.
Key points to note
- Clarification of expectations in relation to temporary long-term absences:
- The proposed handbook changes will provide clarification of expectations for temporary long-term absences when firms notify the FCA of a Senior Manager taking temporary leave for longer than 12 weeks (long-term leave), for example parental leave and where the length of absence is not known.
- The FCA is consulting on these proposed handbook changes following feedback received suggesting that clarification about the status of Senior Managers on long-term leave and in respect of the required notifications would be helpful to support firms in complying with the rules.
- The FCA is also proposing to make these changes in relation to Approved Persons at Appointed Representatives in SUP 10A, but not with regards to statements of responsibilities as these don’t apply to approved persons at appointed representatives.
- The full summary of proposals is available in CP20/23.
- Changes to the minimum levels of professional indemnity insurance (PII) cover:
- The FCA proposes to amend certain provisions in the Handbook which reference the Insurance Distribution Directive (IDD) minimum levels (limits of indemnity) of professional indemnity insurance (PII) cover.
- The minimum limits of indemnity for the IDD have been amended as follows:
- for a single claim against the firm, the limit has been increased from €1,250,000 to €1,300,380; and
- for the total aggregate of claims against a firm, the limit has increased from €1,850,000 to €1,924,560.
- These changes are required to ensure the limits are in line with IDD revised minimum levels of PII cover and that these move in step with increases in consumer inflation.
- Ensuring firms hold appropriate PII is important to protect both consumers and firms, by providing a source other than a firm’s capital from which redress liabilities may be met.
Next actions
Comments on this Consultation Paper should reach the FCA by 4th February 2021. Comments may be sent by electronic submission using the form on the FCA’s website at https://www.fca.org.uk/cp20-23-response-form.