How Many of These are on Your To-Do List?

To say that it’s a busy time for regulatory change at the moment is to understate the position just a bit. It may be a combination of the tax year-end and the timing of new reforms that is driving much of this activity. But whichever way you look at it, the last week in March has seen activity levels from the regulators reach new heights. From a firm’s point of view, this means a huge amount of information to assimilate, quite often in a very short space of time.

If you don’t believe me, then take a look at the list below to see what I mean. And whilst you’re at it, why don’t you have a look and see how many of these apply to you or your firm? And from this list, test how many you’re aware of.

1. Solvency II – The big push

It’s not surprising that there has been as much activity as there has lately in this area. The implementation date for the Directive is now about nine months away, and regulators have to give firms the certainty that they need in the form of rules, to be able to make sure they are compliant from 2016.

As a result, the following items have been pushed out, to try and keep up the momentum:

  • Policy statements from both the PRA and the FCA setting out how the Directive will be transposed into the respective handbooks.
  • A joint consultation on key aspects of the new regime for approved persons; most notably, the provisions for transitional arrangements (including “grandfathering” of existing approved persons to the new regime) as well as the forms required to make new applications for approved persons from 2016. This consultation also includes proposals from the FCA on the governance of firms post Solvency II, including provisions relating to the maintenance of governance maps.
  • A policy statement from the PRA on further changes to the Senior Managers and Senior Insurance Managers regimes for banks/investment firms and insurers respectively.

2. Pension reforms – nearly upon us

By the time this blog is published, the pension reforms mooted in the 2014 Budget will have arrived, and will be available. But right up until the implementation, regulators have been active. Only very recently, the FCA has updated its “Scam Smart” initiative to warn pension scheme members about the risks of falling for scams, especially where they decide to free up cash from their pension funds.

Also, straight after this year’s Budget, the DWP and HM Treasury issued a Command Paper proposing the development of a secondary market for annuities. A look through this reveals that the government envisages this market developing between annuity providers and third parties, where annuitants can try and source a buyer for their annuity income stream in exchange for a cash lump sum. For many firms (including insurers and investment firms) no doubt this will be a business opportunity they’ll wish to pursue. The legislation to allow this to happen is expected to be in place by April 2016.

As if this wasn’t enough, the FCA also took the opportunity to issue the final Retirement Income Market Study at the end of March. This restated the key messages from the previous draft, most notably that there will be further changes to the pre-retirement notifications that firms have to give their customers. The FCA will use behavioural trialling to help shape the final communications, but firms will most likely need to go through another round of changes in 2016.

3. Not forgetting business as usual

Mix all of this in with the “BAU” communications and things start to get quite heavy.

  • The FCA has this year combined its Business Plan with its Risk Outlook. In the latter case, pension reforms again loom large (particularly the risk of scams) as well as consumer credit (especially with the window for interim approval now approaching closure).
  • The FCA has also issued its annual consultation on the fees it levies on firms. This year, included is how it intends to collect the levy for the Pension Wise guidance service.

4. And then there are investment firms

The FCA has issued a discussion paper on how the conduct requirements of MiFiD II can be implemented in the UK, and in particular how the changes to the governance of insurance products will be affected. The implementation date for MiFID II is now less than 2 years away, so the pace of development is now likely to quicken here.

What all this means

So, did you get everything that applies to you? If so, great. If not, then hopefully this post serves as a reminder of just how important it is to keep a very close eye on regulatory developments at the moment.

But this isn’t just about identifying change. It’s about understanding it; and then putting it into practice. This is where training and development opportunities for relevant staff have to keep being identified and provided.

The risk is that with so much to do, people find their personal development plans can easily take a back seat, if the focus is too much on implementation.

But there is a strong argument that attendance at courses, conferences, seminars and other events can help to quicken the pace of learning, whilst allowing people to gain valuable insight from sharing their experiences with others.

And in environment where everyone is pressed for time, that’s something of a “win-win”, especially as firms grapple to climb the mountain of new regulatory knowledge, whilst needing to use time wisely.

And time can be used even more wisely by using Industry Events Online to search for interesting training opportunities, of which there are now many.

So, make sure your to-do list includes training and development, not just regulatory awareness.


Martyn Oughton    

By Martyn Oughton a Professional Member of the International Compliance Association (ICA).  Martyn now writes a regular blog for Industry Events Online focusing on the importance of training in all aspects of compliance. Read Martyn's other publications at Martyn's Writers' Residence website.

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