The PS summarises responses to CP11/25, with the main issued raised being dealt with in chapters 2-4 on the specific topics of facilitation of payment of adviser and consultancy charges under the RDR adviser charging rules; reporting of investment amounts net or gross of adviser and consultancy charges and implementation of certain disclosure requirements of Solvency II. FSA notes that it has only made minor changes to the rules and guidance consulted on, so the Compatibility Statement in Annex 1 of the CP has not been amended. Rules on adviser and consultancy charges come into force on 31 December 2012 and the rule on reporting investment amounts where payment of adviser charges or consultancy charges is being facilitated will apply to firms’ first full reporting period after 31 December 2012. The Solvency II disclosure rules are “near final”, as they include new GLOSS definitions to be made with the main Solvency II rules. These will be made at the same time as the main Solvency II rules, which FSA expects to be at the end of 2012 and which are expected to come into effect on 1 January 2014.

Topics in this very short newsletter include policy updates and new help for firms to get ready for the RDR.

The PS gives feedback on the responses to CP11/26 and explains the approach adopted in the final guidance on the treatment of legacy assets. FSA notes that the RDR rules will prevent the payment of commission for new advice, and it was confirmed in CP11/26 that FSA did not propose to relax this ban. However, FSA has accepted that guidance would be helpful to firms in complying with the ban. The draft guidance on in CP11/26 (to go in a new section of PERG) set out typical recommendations and whether they will be regulated as ‘advising on investments’. Many of the responses to the CP asked for additional guidance on how the ban on commission for post-RDR advice will interact with the rules made in September 2011, which confirm that payment of trail commission can continue on pre-RDR assets. FSA has added guidance on this in COBS 6. The guidance in Appendix 1 of the PS will come into force on 31 December 2012, at the same time as the main RDR adviser charging rules. FSA will review the implementation of the new adviser charging rules, and will monitor changes in the market leading up to the implementation of the rules at the end of this year. This will include monitoring changes in the market pre-RDR, such as significant increases in the sale of particular products that could indicate noncompliance with the rules on suitability and the client’s best interests. It is emphasised that once the RDR rules have come into force, FSA will take action if it sees see firms acting in a way that could lead to consumer detriment.

This guidance consultation looks at the key components of the standard for independent advice; the requirements for firms providing restricted advice; the requirements for how firms hold themselves out; advice tools and investment strategies, and how their use may influence the ability of firms to meet the independent advice rules; and professional standards and how differences between the qualifications and skills of advisers may affect the ability of advice to meet the independent advice rules. Responses are required by 9 April 2012.

This guidance consultation looks at the key components of the standard for independent advice; the requirements for firms providing restricted advice; the requirements for how firms hold themselves out; advice tools and investment strategies, and how their use may influence the ability of firms to meet the independent advice rules; and professional standards and how differences between the qualifications and skills of advisers may affect the ability of advice to meet the independent advice rules. Responses are required by 9 April 2012.

This guide is intended to help firms implement RDR requirements, including key questions that can be used to check progress, identify any gaps, and prioritise and plan next steps

Text of the above speech, given at the European Parliament/EC (DG-Health and Consumers) event, follows. He discusses ESMA’s approach to consumer protection in light of MIFID II/MIFIR, UCITS IV and work on ETFs.