The PS summarises the feedback FCA received on the proposed changes to Section K of the RMAR and the PSD reporting requirements. FCA has made what it describes as some small amendments to the final rules and guidance. The changes to Section K of the RMAR will take effect from 31 December 2014. The changes to PSD reporting will take effect in two stages: 1 October 2014 (reflecting the policy changes pre-MMR implementation) and 1 January 2015 (reflecting the changes post-MMR implementation).

FSCP reviews its work over the past year and notes particular topics of concern going forward, including consumer credit, competition, mortgage borrowing, non-compliance with RDR rules, pensions, cross=subsidies in personal current accounts, investment costs and effective regulation as the consumer sees it.

FCA has published details of instruments passed at its Board meeting on 5 June 2014. These are: Retail Distribution Review (Complaints Data) Instrument 2013/35 and Client Assets Sourcebook (Amendment No 5) Instrument 2013/36. In addition, it notes that the Conduct Of Business Sourcebook (Use of Dealing Commission) (Amendment No 2) Instrument 2014/29 was approved at a Board meeting on 5 May 2014 and states that Instrument 2014/34 was approved at the June meeting and will be published at a later date. The Instruments will be available to download via the second link.

Further to TR14/06, published in April, FCA has published an assessment tool to enable firms to review their disclosure documents against the key disclosure requirements of the RDR. FCA plans to use this to assess disclosure in the third cycle of its RDR review and encourages firms to use this assessment template to make any required amendments to their client facing documentation prior to this.

FCA has published its final guidance in respect of what it expects from firms that are involved in the transfer of investors from pre-RDR unit classes to post-RDR unit classes, The guidance addresses uncertainty over whether a conversion to a clean unit class should be treated in the same way as a switch involving cancelling the existing units and issuing new units and questions on the conversion process. FCA has also published feedback on the original consultation (second link below).

FCA notes that it has been engaged in the second stage of a thematic review to assess how firms have implemented RDR requirements focusing on whether firms that are describing themselves as independent are acting independently in practice and whether firms are complying with the disclosure requirements. TR 14/15 looks at the first of these issues and a separate report outlining how firms are meeting the disclosure requirements is to be published in April. TR 14/15 shows that most advisory firms describing their service as ‘independent’ appeared to use the description accurately. In response to industry requests for further clarification on the standards required for advice to be ‘independent’, FCA has published examples of good and poor practice within its review. FCA is releasing a video on the issue of independence for financial advisers introduced by Clinton Askew, a financial adviser who sits on SBPP. Together the examples in the review and the video will address a number of topics, including: providing advice on all retail investment products in a relevant market; referrals to other advisers; the use of product panels; the use of platforms; the use of model portfolios, which are a collection of funds with a certain asset allocation typically designed to meet a specific risk profile and referrals to discretionary investment services.

The HN provides information on Instruments passed at the FCA Board on 12 December 2013 (Supervision Manual (Product Sales Data and Mortgage Lending and Administration Return) Instrument 2013/83); on 17 January 2014 (Capital Requirements Directive IV (Reporting Guidance) Instrument 2014/1) and on 30 January 2014 (Senior Management Arrangements, Systems and Controls Sourcebook (AIFM Remuneration Code) Instrument 2014/2; Capital Requirements Directive IV (Handbook Administration) Instrument 2014/3; Training and Competence Sourcebook (Accredited Bodies and Qualifications Amendments No 10) Instrument 2014/4; Retail Distribution Review (Adviser Charging No 7) Instrument 2014/5; Supervision Manual (Listing Authority Review Committee) Instrument 2014.6; Supervision Manual (Suspicious Transaction Reports) (Amendment) Instrument 2014/7; Over-the-Counter Derivatives, Central Counterparties and Trade Repositories (No 2) Instrument 2014/8; Listing Rules and Disclosure and Transparency Rules (Primary Information Providers) Instrument 2014/9 and Fees (Consumer Credit) Instrument 2014/10). Instruments may be downloaded inpidually via the second link.

Further to CP13/4, FCA has published this PS. The final rules prohibit new referral payments by a discretionary investment manager to an adviser when the adviser recommends that a client places additional money with the same discretionary investment manager from whom they receive payments following a pre-RDR referral; prohibits referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them and provides a minor amendment to the rules requiring complaints against inpidual advisers to be reported FCA (in order to match the policy intention that complaints concerning activities when acting as a retail investment adviser – such as advice on shares and derivatives as well as retail investment products – should also be included). The rules banning new referral payments come into force on 31 December 2014. FCA intends at present that the rules on complaints reporting should come into force in June 2014.

FCA has published Finalised Guidance for financial advisers and product providers on when payments made under service and distribution agreements might create conflicts of interest. Payments should be “based on reasonable reimbursement for the costs incurred” by advisers and “should always enhance the quality of service provided to customers”. The responsibility for managing potential conflicts is to be shared between product providers and advisers.

This article considers the key legal and regulatory issues in the fast-developing world of mobile payments.