FCA has published this CP in response to questions received on how to apply RDR rules. Proposals cover: payments to advisers for referrals to discretionary investment managers; banning referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them such as passing on information from the discretionary investment manager and proposes a minor amendment to rules requiring complaints against inpidual advisers to be reported to FCA (meaning that complaints concerning all activities when acting as a retail investment adviser – such as advice on shares and derivatives as well as retail investment products – should be included). Responses are required by 4 October 2013.

Further to FSA’s CP12/12, FCA is proceeding with the core proposal that requires a platform service to be paid for by a platform charge disclosed to, and agreed by, the consumer. However, some platforms suggested a number of charges that could still appropriately be taken from firms, including product providers. FCA has agreed with a number of these so has amended the rules to allow: payments for the work incurred correcting a pricing error by the product provider; payments for the work incurred in dealing with a corporate action by the product provider; payments for the work incurred in providing the product provider with management information regarding the consumers who are invested in the product; and payments in relation to advertising products on the platform. The paper notes that, with regard to “read across” of the platform proposals to non-platform markets, there is a strong argument for the application of similar rules to adjacent markets, particularly in the case of execution-only and SIPPs markets. FCA will consider these markets as part of its ongoing work and will aim to consult later on any rules, where necessary. FCA will publish a further consultation shortly with regard to the definition of “platform service”. Rules set out in the PS will come into force on 6 April 2014 but platforms will have two years to move existing customers to the new explicit charging model. At the end of the two year transitional period (6 April 2016) platforms will have to charge its customers a platform charge for both new and existing business.

FSA has published these two documents. The business plan sets out how FCA will manage conduct risks in the first year and how it will use its resources effectively to meet its objectives, which are: to secure an appropriate degree of protection for consumers. to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers. The key areas of focus for the year ahead include: a renewed focus on consumers; continuing to tackle market abuse, by taking strong enforcement action to deter future misconduct. ensuring a competitive financial services industry. continuing to address ongoing misconduct and carrying forward major policy initiatives such as MMR, RDR and extensive engagement with Europe on Directives under consideration. The financial risk outlook sets out FCA’s current thinking on conduct in financial markets by analysing the root causes and emergence of conduct risk. It emphasises wholesale conduct, suggesting “we recognise that wholesale conduct in some respects sets the tone for the conduct of the wider financial industry; the risks in transactions where conflicts of interest are poorly managed or counterparts do not act with integrity can undermine overall market integrity, and may eventually feed through to the retail consumer”. The main risks identified for the coming year are: firms not designing products and services that respond to real consumer needs or are in consumers’ long-term interests; distribution channels not promoting transparency for consumers on financial products and services; over-reliance on, and inadequate oversight of, payment and product technologies; shift towards more innovative, complex or risky funding strategies or structures that lack oversight, posing risks to market integrity and consumer protection; and poor understanding of risk and return, combined with the search for yield or income, leads consumers to take on more risk than is appropriate.

FSA has produced this factsheet in the form of a Q&A, which sets out answers to the top questions on RDR asked at recent FSA events. Specific topics covered include: independent and restricted advice’ adviser charging and professionalism.

This is described as the last RDR newsletter. Topics include: passive investments; social investments; RDR data requirements; supervising compliance with RDR; receiving adviser charges over a period of time; adviser readiness research; reviewing systems and controls and questions on RDR.

This new FSA newsletter is intended to update all retail life and general insurers and the London market on the work of ots supervision departments, some of the key cross-sectoral regulatory initiatives that affect insurers and relevant policy developments. Specific topics in this edition include: thematic review of motor legal expenses insurance; general insurance “add-ons”; telematics insurance; RDR thematic work;’ annuities thematic work; thematic review of the governance of unit-linked funds and how FCA and PRA will work on with-profits.

FSA has published a factsheet which covers “top questions on RDR” from recent workshops. Specific topics include: independent and restricted advice; adviser charging and professionalism.

This PS summarises feedback to CP12/9. FSA notes that it received over 230 responses which included concerns from consumers and MPs over the scheme. FSA says that “we received no new evidence or arguments to suggest that the proposed scheme would not be an appropriate way of dealing with this issue or that we do not have the power to make rules to implement the scheme [under FSMA s404]”. However, FSA has amended some of its original proposals over concerns that the IFA sector is already engaged with RDR implementation and that a redress scheme would lead to higher FSCS levies and PII costs. A modified s404 FSMA scheme will be implemented, which gives consumers the opportunity to ‘opt-in’ to have their sale reviewed, rather than requiring firms to review proactively all sales. FSA has also amended the start date of the scheme from 1 January 2013 to 1 April 2013 to give firms more time to prepare for the scheme. Firms will have until 29 April 2013 to identify all consumers for whom the firm advised, arranged or managed investments in an Arch cru fund and identify all cases that fall within the scope of the scheme. Firms must write to all consumers within and outside the scope of the scheme by 29 April 2013. The letter will either explain to the consumer that the firm will review the advice it gave to them if they decide to opt in to the scheme, or it will explain that their case falls outside the scope of the scheme. If consumers do not receive a letter from the firm by 29 April 2013 they should call or write to FSA to make it aware of this. Consumers that do not respond will receive up to two reminder letters following this first letter. They will have until 22 July 2013 to opt in to the scheme.

On 13 December 2012 the FSA Board made changes to the Handbook which amend the RDR adviser charging and remuneration rules regarding referrals to discretionary investment managers (Retail Distribution Review (Adviser Charging No 6) Instrument 2012/74)

On 13 December 2012 the FSA Board made changes to the Handbook which amend COBS and GLOSS so that the wording of the exemption from the RDR rules for certain Holloway policies reflects FSA’s policy intention (Retail Distribution Review (Holloway Sickness Policies) (Amendment) Instrument 2012/70)