Compliance staff don’t come under any of the defined categories to be certified as such unless they also have a role which does. For example, if (in addition to their compliance role) an individual was supervising a certified member of staff, such as
The extension of the Senior Managers and Certification Regime (SM&CR) to all FCA regulated firms takes place on 9 December 2019. The regime will have implications for both you and your firm and you will be required to make a number of changes to your policies and procedures.
The SM&CR will have an impact on various areas of your business, including your T&C obligations. To help with your preparations, this section highlights the changes you will need to consider in relation to your firm's T&C scheme.
Each senior manager will need to have a Statement of Responsibilities (SoR). This is a single document which sets out their role and what they are responsible for. The SoR must clearly describe the individual’s responsibilities and accountabilities, without unnecessary detail. It must be self-contained without making reference to information held in any other documents
The prescribed responsibilities are a set of FCA defined responsibilities that must be allocated to an appropriate individual senior manager in core and enhanced firms.
Each prescribed responsibility should be given to the senior manager who is the most senior person responsible for that area. Each prescribed responsibility should be given to one person. The FCA does not expect any prescribed responsibilities to be split or shared.
| Who does this apply to? | All firms – Article 3, Exempt CAD, BIPRU providing investment advice |
| What is this? |
Firms advising clients in relation to investments are required to consider potential tax implications. We have pulled together a number of Frequently Asked Questions which can assist firms when looking at the potential taxation of investment bonds. |
| How can threesixty help? |
Online guidance Technical support |
With the lifetime allowance (LTA) having reduced from a high of £1.8m to a low of £1m an increasing number of people are getting close to or exceeding the LTA. Here we provide a reminder of the protections available now and previously and take a look at some of the issues that need to be considered when deciding whether to apply for protection.
The standard lifetime allowance increased to £1,055,000 from tax year 2019/20 (£1,030,000 in 2018/19) and will, increase annually by CPI (the annual rate to the previous September – where CPI is negative the LTA will remain level).
| Who is this for? | Article 3 exempt, Exempt CAD, DFM, Authorised professional firm |
|---|---|
| Senior mgt. (who run the business), Non-exec. directors, CF10 - Compliance oversight | |
| What is this? |
Product governace is intended to ensure products are distributed to and meet the needs of the proper target market. Periodic reviews should be carried out to ensure this remains the case. All distributors and manufacturers of investment products and services must have appropriate product governance procedures in place. |
| How else can threesixty help? |
Guidance on related areas Template documents Business risk assessment visits to assess implementation of your procedures Helpdesk support |
The main residence nil rate band (RNRB) applies to deaths on or after 6th April 2017. For those eligible to use it, it is in addition to the standard nil rate band (NRB), currently £325,000 (and frozen at that level until April 2021).
This section provides guidance on pension transfers from schemes with safeguarded benefits, for example, defined benefit pension transfers.
Given the advantages of DB pensions, in the FCA’s view, the proportion of consumers advised to transfer is too high and many of these transfers will not have been in consumers’ best interests. The FCA is also concerned that despite its previous work, too many advisers are delivering poor advice, much of it driven by conflicts of interest in the way they are remunerated, in particular, the practice of contingent charging where payment is only made if a transfer proceeds.
To address these concerns, the FCA is proposing a number of changes as to how advisers manage and deliver pension transfer advice, particularly for DB to DC transfers.
Within CP19/25, the FCA is proposing to:
|
This paper is proposing a wide range of changes for pension transfer business. Although this is a consultation we recommend that you start to consider the implications to your business if the changes are introduced as proposed. According to the FCA, many of the changes will come into force within one week of the FCA Board making the final rules. If you currently use a contingent charging model for pension transfer business, you need to consider the implications of this type of charging structure becoming obsolete. We are currently reviewing the impact of the FCA's proposals and we'll be submitting a response to the FCA's consultation. |
Full details of the above proposals are available via: Consultation: Pension transfer advice: contingent charging and other proposed changes
The FCA has also published a video to help consumers better understand financial advice on transferring out of a DB pension scheme: https://www.fca.org.uk/news/news-stories/fca-publishes-video-help-consumers-understand-pension-transfer-advice
| Who is this for? | Article 3 exempt, Exempt CAD, DFM, Authorised professional firm, Mortgage & insurance |
|---|---|
| Senior mgt. (who run the business), Non-exec. directors, CF10 - Compliance oversight, Insurance distribution responsibility, Mortgage mediation responsibility | |
| What is this? |
All personal investment firms and mortgage and insurance firms, are generally required to hold appropriate professional indemnity insurance (PII) cover. BIPRU firms are only required to hold PII where they undertake insurance or mortgage distribution business. |
| How else can threesixty help? |
Guidance on related areas Template documents including PII policy checklist and PII Application Covering Letter Business risk assessment visits to assess implementation of your procedures Helpdesk support |
| Who is this for? | Article 3 exempt, Exempt CAD, DFM, Authorised professional firm, Mortgage & insurance |
|---|---|
| What is this? |
The FCA is extending the Senior Managers and Certification Regime (SM&CR) to FCA regulated firms from 9 December 2019. Its main focus is on clarity of responsibility and accountability, high and consistent standards of conduct of all individuals in the financial services industry and a shift to look at individuals as well as firms in the carrying out of supervision activity. |
| What should I do? |
Although implementation is not until December 2019 you can begin to prepare for the regime by looking at your firm's management structure and considering how responsibilities within your firm should be allocated. You may also consider potential training needs as a result of the changes. |
| How else can threesixty help? |
We are running events on the subject in August and September 2019 and expect to expand the locations and numbers of events in the coming months. We will keep you updated with developments through our usual guidance pages. |
Usually an individual is entitled to take up to 25% of total pension benefits as tax free cash (or 25% of their lifetime allowance if less). However at A-day (6th April 2006) some people were entitled (under the old Inland Revenue maximum benefit rules) to tax free cash from occupational schemes (including Section 32 buyouts) that exceeded 25% of their benefits at A-day. These higher tax free cash amounts are automatically protected without needing to be registered with HMRC (the figures should be recorded by the scheme administrator though and proper records kept to avoid any future issues).
The main residence nil rate band (RNRB) applies to deaths on or after 6th April 2017. For those eligible to use it, it is in addition to the standard nil rate band (NRB), currently £325,000 (and frozen at that level until April 2021).
In summary, the RNRB is intended to protect some or all of the value of the family home (or previous family home) from inheritance tax where the home (or, if the home has been disposed of, assets of equivalent value) is being passed on to children or grandchildren (or their spouses).
| Who is this for? | Article 3 exempt, Exempt CAD, Authorised professional firm |
|---|---|
| Senior mgt. (who run the business), CF10 - Compliance oversight, Advisers | |
| What is this? |
Where your firm provides investment services to clients relating to MiFID investments (such as units in collective investment schemes and shares), you must provide:
This information must be provided in advance (ex-ante) and ongoing on at least an annual basis (ex-post) for clients who receive ongoing reviews. |
| How else can threesixty help? |
Guidance on related areas Templated documents, including documents for initial and ongoing disclosure Business risk assessment visits to assess implementation of your procedures File review assessments (on site or remote) Helpdesk support |
| Who is this for? | Article 3 exempt, Exempt CAD, DFM, Authorised professional firm |
|---|---|
| Senior mgt. (who run the business), Non-exec. directors, CF10 - Compliance oversight, Advisers, Pension transfer specialist | |
| What is this? |
Advising on pension transfers and pension switches can be a complex area. It's important to first understand the distinction between these two areas:
Depending on the types of pensions and benefits being transferred, different requirements will apply, in terms of required regulatory permissions and approval of advice being given. |
| How else can threesixty help? |
Guidance on related areas Template documents Remote learning, speicialist workshops and regional development events Business risk assessment visits to assess implementation of your procedures Helpdesk support |
| Who is this for? | Article 3 exempt, Exempt CAD, DFM, Authorised professional firm, Mortgage & insurance |
|---|---|
| Senior mgt. (who run the business), CF10 - Compliance oversight, Insurance distribution responsibility, Mortgage mediation responsibility, Advisers, Investment managers | |
| What is this? |
The FSCS is the last line of defence for a client who is entitled to compensation where a regulated business is unable to meet the liability. The FSCS covers claims against authorised firms where they're unable, or likely to be unable, to pay claims against them (such as FOS awards). In general this is likely to be because the firm is insolvent or has gone out of business. |
The FCA has today proposed a ban on contingent charging for pension transfer advice. In a raft of pensions related publications, the consultation proposing the ban has been issued alongside a policy statement on the longstanding retirement outcomes review and a feedback statement on competition in workplace pensions.
Contingent charging in this context is where the advisory fee (usually a percentage of fund value) is dependent on the client accepting a recommendation to transfer. The FCA is therefore concerned that this can lead to unsuitable advice.
CP19/25 - Pension transfer advice : contingent charging and other proposed changes makes the following proposals:
The consultation closes on 30 October 2019 with finalised rules expected to be issued in the first quarter of 2020.
We will be issuing further comment and guidance on CP19/25, as well as the accompanying papers on workplace pensions and the retirement outcomes review, in the near future.
| Who is this for? | Article 3 exempt, Exempt CAD, DFM, Authorised professional firm, Mortgage & insurance |
|---|---|
| Senior mgt. (who run the business), Other senior mgt., Non-exec. directors, CF10 - Compliance oversight, Insurance distribution responsibility, Mortgage mediation responsibility, Advisers, Investment managers, Support incl. paraplanners, Pension transfer specialist | |
| What is this? |
Training and competence (T&C) is about support and development of individuals working for your firm. You must ensure they have the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them. This should also include achieving good standards of ethical behaviour. |
Clients of threesixty enjoy full access to our online resources.
To talk to us about any of the topics mentioned here, or to find out more about threesixty and our breadth of services, please call 03707 360 360.
Alternatively email talktous@threesixtyservices.co.uk for more information.