Appointing or changing non-SMF directors: new FCA notification form

The Financial Conduct Authority (FCA) has published a reminder to firms that, from 9 December 2019, MIFID investment firms and optional exempt firms should use a new form to submit information to the FCA when appointing non-SMF Directors to, or withdrawing them from, their management body.

Firms can currently preview the form. It will be available to download from the Handbook (in SUP 15, Annex 14R) from 9 December 2019.

If a firm's management body changes, they will need to download the form, complete it and email it to the FCA using This is a temporary process. From Q1 2020, firms will be able to submit the form via Connect. Firms that don't currently have access to Connect should prepare by registering now.

The FCA consulted on these changes in June 2019 and published its final rules in September 2019.

Potential duty of care in financial services: FCA update

The FCA has updated the webpage on its April 2019 feedback statement on a new duty of care and potential alternative approaches (FS19/2). The webpage now states that the FCA will publish a paper in early 2020 seeking detailed views on specific options for change. The FCA had previously indicated that it planned to publish a further paper on the topic in 2019.

Authorisation statutory deadlines: FCA accepts criticism of Complaints Commissioner

The FCA has published its response to a final report by the Complaints Commissioner. The report relates to a complaint about the FCA's failure to provide information to an applicant's solicitor on the statutory timeframe for considering an application for authorisation, despite repeated requests. The Complaints Commissioner upheld the complaint and was critical of the FCA.

The FCA has accepted the criticisms and recommendations made by the Complaints Commissioner. The FCA has written to the complainant to apologise and offered the complainant an ex gratia payment of £300.

ICT and security risk management: EBA final guidelines

The European Banking Authority (EBA) has published a final report containing its guidelines for credit institutions, investment firms and payment service providers on the mitigation and management of their information and communication technology (ICT) and security risk management. The guidelines aim to ensure a consistent and robust approach across the single market.

The EBA publishes these guidelines in response to the European Commission's FinTech action plan request for the EBA to develop guidelines in this area.

The guidelines enter into force on 30 June 2020. The guidelines on security measures for operational and security risks under the revised Payment Services Directive have been fully integrated into these new guidelines and will be repealed.

Directive to protect whistleblowers published in OJ

Directive (EU) 2019/1937 on the protection of persons who report breaches of EU law has been published in the Official Journal of the EU (OJ).Member states must implement the Directive generally by 17 December 2021. However, by way of derogation, implementation of the internal reporting requirements under Article 8(3) for legal entities in the private sector with 50 to 249 workers, is 17 December 2023.

Banking and Finance

Price discrimination in cash savings market: FCA update

The FCA has updated the webpage on its July 2018 discussion paper, DP18/6, on price discrimination in the cash savings market. The FCA previously indicated that it planned to publish a consultation paper or feedback statement in 2019. It now indicates a paper will be published in January 2020, which will outline the feedback received to the discussion paper and its next steps.

Definition of "legal mortgage" in PERG 4.4: FCA clarification

The Office of the Complaints Commissioner has published a final report relating to a complaint about the FCA's handling of an inquiry about the definition of a "legal mortgage" referred to in the FCA Handbook's Perimeter Guidance manual at PERG 4.4.

In its decision, the Complaints Commissioner quotes some clarification that the FCA gave it to explain the use of the term "legal mortgage" at PERG 4.4:

"All of the regulated mortgage activities (e.g. "entering into", "administering", "arranging" or "advising" etc) are framed in relation to the legal definition of a "regulated mortgage contract". There are a number of ways in which this is narrower than "any loan secured by a mortgage on land". This is discussed in our Perimeter Guidance at PERG 4.4 but as an example the borrower has to be an individual or trustee and at least 40% of the land has to be used (or intended to be used) as or in connection with a dwelling. So this tends to exclude, for example, commercial mortgages and buy-to-let.

"[Our] intention in referring to "legal mortgage" in PERG 4.4.16G as a piece of 'legacy drafting' was to explain its presence by reference to the evolving nature of the legislative definition of a "regulated mortgage contract". The drafting of PERG 4.4.16G is not now incorrect as a legal mortgage remains within the definition of a "regulated mortgage contract". We think the current drafting of PERG 4.4.16G and the inclusion of "legal mortgage" within it remains useful. It provides an answer for firms who notice that the original legislative definition of a "regulated mortgage contract" was limited to a "legal mortgage" whereas the current legislative definition doesn't mention them. This is because they are subsumed within the whole, which is the point that PERG 4.4.16G seeks to make."

CRR: Commission Implementing Regulation amending ITS on mapping credit assessments of ECAIs

Commission Implementing Regulation (EU) 2019/2028, which amends Implementing Regulation (EU) 2016/1799 on implementing technical standards (ITS) on the mapping of external credit assessment institutions' (ECAIs) credit assessments under the Capital Requirements Regulation (CRR), has been published in the OJ.

Commission Implementing Regulation (EU) 2016/1799 specifies the correspondence of the relevant credit assessments issued by an ECAI to the credit quality steps defined in the CRR. The Amending Regulation updates the mappings of ECAIs to reflect changes to the factors underpinning existing credit assessments and the extension by some ECAIs of their credit assessments to new market segments. It also provides a mapping for a credit rating agency (CRA) that has recently been registered under the CRA Regulation.

To see the full article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.