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The Financial Conduct Authority’s new Consumer Duty has been an important cornerstone in terms of regulation this year.
It is something Money Marketing explored in depth in the cover feature of its October edition.
Until now, the Consumer Duty has not convinced everyone in the industry. Andy Bell described it as “a charter for ambulance chasers”.
This year also saw the London Capital & Finance (LCF) saga coming to a close. The Compensation (London Capital & Finance plc and Fraud Compensation Fund) Act 2021 received royal assent on 20 October.
The Financial Services Compensation Scheme (FSCS) is administering the collapsed mini-bond provider’s compensation scheme on behalf of the government and said all eligible bondholders will receive an offer of compensation by 20 April 2022.
So far, the FSCS has paid compensation to just over 84% of eligible LCF bondholders.
In an update published on 16 December, the FSCS said it had contacted more than 7,750 people. It had issued cheques for over 10,000 bonds, totalling £91m.
There are other cases involving collapsed mini-bond issuers that are still pending. That includes among others Basset & Gold and Blackmore.
The FCA’s approach to whistleblowing has been severely criticised this autumn. It came after its executive director of enforcement and market oversight Mark Steward said the regulator had not received any whistleblowing intelligence in the cases of LCF and Blackmore from anyone who could be classed as a whistleblower under the Public Interest Disclosure Act.
The government is considering reviewing the regulation of mini-bonds next year.
Depending on the government’s action, the Treasury Select Committee (TSC) might also get involved.
This is what the chair of the TSC, Mel Stride told Money Marketing in the MM Meets for the November 2021 edition of the magazine.
Overseeing the FCA’s transformation programme will be at the heart of TSC’s work next year.
Stride said he wants the FCA to carry out its transformation programme as quickly as possible.
The TSC has also campaigned for the inclusion of a ban to prevent advertisements from non-authorised firms.
The FCA has also recommended that duties on internet businesses in the Online Safety Bill should extend to paid-for-advertising.
Yet, some consider the Online Safety Bill is not fit for purpose.
Google, for instance, warned through its director of trust and safety at Google Europe, the Middle East and Africa Amanda Storey, that it is designed for user-generated content and not to tackle scams.
No one likes fee increases and unsurprisingly the industry has not been particularly pleased with the constant raise of FSCS levies in recent years.
It is expected to hit £717m for 2021/22, which is an almost 160% increase in a decade.
The discussion paper published by the FCA aiming to improve the compensation framework of financial services certainly comes at the right time.
The Financial Ombudsman Service has dealt this year with a significant rise in complaints. It signalled a 91% hike in complaints about investments and pensions in the 2020/21 financial year.
FOS has also seen an 66% increase in fraud and scam complaints in the first quarter of the 2021/22 financial year.
As a result, FOS has published an action plan to improve the service delivered to customers.
It was published in response to an independent periodic review commissioned by FOS’s board.
Another significant highlight of 2021 has been the announcement that Charles Randell would step down from his roles as chair of the FCA and Payment Systems Regulator (PSR) in Spring 2022.
The identity of his successor is still unknown, but lobbyists have called for a transparent selection of the FCA’s next chair.
There’s also been a lot of focus around cryptocurrencies and that is also true from a regulatory perspective.
The FCA issued a consumer warning on cryptoasset firm Binance Markets Limited and the Binance Group in June.
The regulator said the company is not permitted to undertake any regulated activity in the UK.
The Advertising Standards Agency has also been acting and banned adverts for cryptocurrency from various companies.
There is no doubt that there will be further action taken next year and the years after on the regulation of cryptoassets.
