Extending the remit of Independent Governance Committees (IGCs)
The FCA has published a consultation on plans to extend the remit of IGCs and Governance Advisory Arrangements (GAAs), a proportionate alternative for firms with less complex relevant products and fewer members. The proposed rules would introduce two new duties into the IGC regime:
- A duty to provide independent oversight of, and report on, the policies in place on environmental, social and governance (ESG) issues, member concerns and stewardship
- A duty to oversee the value for money provided by the non-advised pension drawdown pathway solutions offered by the firm.
With these proposals the FCA is aiming to ensure the pensions sector delivers good outcomes for customers with workplace personal pensions and reduce the risk of them losing money as a result of unsuitable investment options. This work also feeds into helping to ensure the retirement pathways offered represent good value for money and are appropriate for the consumers invested in them.
Dear CEO letter on the approval of financial promotions
The regulator has written to the CEOs of all regulated firms to remind them of their obligations when approving financial promotions for an unauthorised person. Despite a previous letter on the same topic, issued in January 2019, the regulator has found evidence that some firms aren’t carrying out appropriate due diligence when approving financial promotions that will be communicated by an unauthorised person. Firms acting as s21 approvers of financial promotions are reminded of their obligations in this area. Approvers must:
- Confirm that the promotion complies with all financial promotion rules
- Withdraw their approval if they become aware that the promotion no longer meets the requirements of COBS
- Have adequate systems and policies in place to ensure compliance
- Ensure that all information is accurate and relevant risks are prominently displayed alongside any potential benefits.
The FCA also highlights that if it identifies concerns with a firm’s due diligence, it will also take steps to determine what governance and oversight failings may have contributed to any breach.
Proposed fees and levies for 2019/20 published
The FCA has published its proposals to raise the 2019/20 fees and levies to fund the FCA, FOS, the Money and Pensions Service (formerly the Single Financial Guidance Body), devolved authorities and the illegal money lending (IML) expenses of HM Treasury. The ongoing regulatory activities (ORA) budget has increased by 2%, to £537.7m. The annual funding requirement (AFR) has also increased by 2.7%, to £558.5m. As a result of the increased ORA, the regulator is proposing to increase the minimum fees and flat fees for the A fee-blocks and CC1 and CC2 consumer credit fee blocks by 2%. As a result of the rebates from retained financial penalties, the total fees collected in 2019/20 will be reduced by £48.6m.