| Link(s): | FCA statement regarding motor finance firms’ financial resources | FCA Dear CEO letter: Maintaining adequate financial resources (fca.org.uk) |
Context
The FCA has announced that it is currently reviewing the historical use of ‘discretionary commission arrangements (‘DCAs’) and has observed firms taking different approaches to account for the potential impact of their previous use of DCAs on their financial resources. Perhaps indicating that the FCA is concerned that significant redress awards may impact such firms, the FCA is writing to firms to remind them that they must maintain adequate financial resources at all times.
Key points to note and next actions
As the FCA’s review continues, the FCA is reminding affected rims that they should continue to investigate complaints involving a DCA, should consider the Information Commissioner’s Office guidance on responding appropriately to Subject Access Requests, and notify the FCA if they are involved in litigation relating to motor finance commissions.
The FCA press release announcing the letter includes an update on the progress of the FCA’s review:
- indicating that many firms are struggling to promptly provide the required data; and
- highlighting the judicial review proceedings commenced by Barclays on the FOS decision to uphold a complaint relating to DCAs.
The FCA has said that it will set out its next steps by 24 September 2024 at the latest.