August 31, 2023 by Clare Curtis

Pensions Dashboard Regulations

The Financial Conduct Authority (FCA) have laid down their final rules and guidance requiring FCA regulated pension providers to provide and qualify information about personal and stakeholder pensions for pensions dashboards, to align with the Government’s recently approved Pensions Dashboard (amendment) Regulations 2023.

Among the requirements the regulator will be seeking that providers must:

  • Complete connection to the digital system operated by the Pensions Dashboard Programme.
  • Be prepared to receive requests to find pensions and search for data throughout the records.
  • Be prepared to return pensions information to the consumer’s chosen pensions dashboard.

Streamlining of structured digital of financial statements

The FCA have streamlined transparency rules for certain companies to present their annual financial report in a specific web browser format (XHTML) to prove it easier for market participants to extract, compare and analyse said report. This is of importance to all companies who are required to publish their annual financial report in the electronic reporting format. It is also of relevance to advisory firms and service providers who assist companies in this field and to software sellers and other service providers who supply products and technology to enable digital recording.

Rules regarding Securitisation

The FCA and the Prudential Regulation Authority (PRA) are currently consulting on their proposed rules for UK securitisation markets. These rules are set to replace the current firm-facing provisions from the UK Securitisation Regulation (UKSR), although some provisions will be entered into the new rules, and most firm-facing provisions will be covered by the new FCA and PRA rules. All comments are requested to be submitted before 30th October 2023.

Authorised Fund Managers’ assessments of fund value 2023

After initial findings in 2017 exhibiting weak demand-side pressure on fund prices, which in turn meant uncompetitive outcomes for investors in authorised funds, new rules were introduced in 2019, these being Collective Investment Schemes (COLL).

Since then, it would appear that many firms have an improved and more lucid understanding of the rules and have notably improved their Assessment of Value (AoV) processes. A majority of firms are now including much fewer assumptions within their analysis that cannot be documented as reasonable, as the FCA expects any claims made by firms to be substantiated. Many firms are now also taking remedial action where poor value is identified, including fund fees, and although these may only be a few basis points, the savings to investors are considerable. But, it was discovered that where fees were cut, it was almost always driven by adverse comparable market rates findings, The regulator expects these and other issues to be addressed and rectified.

IFPR Disclosures

It would appear that many IFPR (Investment Firms Prudential Regime) firms are not including accurate information in their disclosures, especially in the remuneration section. The crux of the issue is that it is not entirely understood what information is to be submitted in this section by different sized firms. For SNI firms this is not so much of a problem as the information required is a lot less than the bigger firms. Moving on from that, large non-SNI firms are expected to provide quite a bit more information than plain non-SNI firms. Issues include types of staff, ratios of fixed to variable payments and whether or not there is a remuneration committee in place.

Operational Resilience

The FCA, over the coming months, are expecting all regulated firms to be constructing strong and robust IT frameworks in order to defend against cybersecurity risks. They also want to see the frameworks, as well as having mitigating procedures in place against cyber-attacks, strengthening the ability to annul issues arising due to system failures, third-party supplier failures, natural disasters and pandemics.

Cryptoasset AML/CTF Regime

The FCA has published results of feedback regarding good and bad applications on the above. It includes background and registration statistics, what to do before preparing an application as well as the preparation itself, submission of the application and what to expect while the application is being assessed. This feedback will be of interest to current and potential cryptoasset applicants and consultants and trade associations.