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  • 03/2013 The FCA’s use of temporary product intervention rules
    In March 2013, the Financial Conduct Authority (“FCA”) published a revised policy statement (the “Statement”) setting out its approach to the setting of temporary product intervention rules. Existing legislation provides that the FCA should, amongst other things, consult with the new Prudential Regulation Authority and the public, when setting any permanent rules to enhance consumer protection. However, the Financial Services and Markets Act 2000 (as amended by the Financial Services Act 2012) provides that in circumstances where it is necessary or expedient for the FCA not to comply with these requirements for the sake of consumer protection, it can create ‘temporary’ product intervention rules. Such rules are not permitted to remain in existence in excess of 12 months from the date upon which they come into force. The FCA provide a number of details in the Statement relating to the circumstances when it may or may not be appropriate to institute product intervention rules. In addition, the Statement sets out provisions governing the required process for creating, reviewing and revoking such rules.
  • 01/2013 IOSCO Final Report - Suitability Requirements with Respect to the Distribution of Complex Financial Products
    Following a consultation report in February 2012, IOSCO published this final report which set out requirements regarding customer protection, including suitability and disclosure obligations, in relation to the distribution by intermediaries of complex financial products to retail and non-retail customers. The report was prompted by concerns regarding the assessment of customer suitability in relation to the distribution of complex financial products arising out of and in connection with recent market turmoil. It also supports the call by the G20 for action to review business conduct rules.
  • 12/2012 FSA Consultation Paper (CP12/35): The FCA’s Use of Temporary Product Intervention Rules
    This Consultation Paper discussed when and how the FCA may make temporary product intervention rules. In this Consultation Paper the FSA explained the nature of some of the situations in which the FCA may choose to do this and gave examples. It also set out the FCA’s draft Statement of Policy on making temporary product intervention rules, further to the requirements of  the Financial Services Bill.
  • 12/19/2012 HM Treasury Press Release - Financial Services Bill Receives Royal Assent
    This press release confirmed royal assent for the Financial Services Bill and set out the documents in the consultation process leading up to such assent, namely the various White Papers and the draft Bill. The Bill, which is now an Act of Parliament, will be known as the Financial Services Act. It sets out a clear and coherent regulatory framework, replacing the uncertainty and inadequacy of the failed Tripartite system and introduces the FCA, which will be the body in the UK responsible for product intervention.
  • 03/23/2012 FSA Finalised Guidance (FG12/9): Retail Product Development and Governance – Structured Product Review
    This finalised guidance was published further to the FSA’s guidance consultation (GC11/27) in November 2011, which set out the findings of the FSA’s review of how firms were designing structured products and contained proposed guidance on retail product development and governance. The FSA assessed seven major providers of structured products between November 2010 and May 2011, looking at how the firms designed structured products, identified target markets and handled post-sales responsibilities. The FSA's key finding in the guidance consultation was that, although firms had taken on board many of its messages on treating customers fairly, there were still weaknesses in product governance arrangements, with firms focusing on their commercial position at the expense of consumers. The finalised guidance is designed to assist firms in developing structured products to meet clients' needs and ensuring a robust post-sale process.
  • 03/2012 FSA Policy Statement (PS12/5): Distribution of Retail Investments
    In November 2011 the FSA published consultation paper CP11/25, which covered: (i) issues on facilitating the payment of adviser charges under the Retail Distribution Review (RDR) rules; (ii) whether product providers should, when reporting data under the FSA’s data requirements, report investment amounts on a basis net or gross of any adviser charges being facilitated; and (iii) minor changes to the disclosure requirements in Chapters 13 to 16 of the Conduct of Business Sourcebook to implement Solvency II Directive requirements. This Policy Statement reports on, amongst other things, the feedback received to such consultation paper.
  • 02/2012 FSA Policy Statement (PS12/3): Distribution of Retail Investments: RDR Adviser Charging – Treatment of Legacy Assets
    This Policy Statement followed consultation paper CP11/26, which covered the treatment of ‘legacy assets’ under the RDR adviser charging rules. The FSA refers to ‘legacy assets’ as retail investment products purchased by a retail client before the RDR rules came into effect and which the client is still holding when the rules are in force. The Policy Statement gave feedback on the responses to CP11/26 and explained the approach the FSA adopted in the final guidance on the treatment of legacy assets, which is contained in Appendix 1 therein.
  • 07/2011 – 07/2012 Belgian FSMA Moratorium on the Distribution of Particularly Complex Structured Products
    The Belgian Financial Services and Markets Authority (FSMA) called upon the financial sector not to distribute to individual investors structured products that were considered particularly complex. Distributors that signed on to the moratorium committed themselves not to distribute structured products that did not fulfil the criteria that had been established. Distributors who participated in the moratorium were placed on a list kept by the FSMA. The voluntary moratorium was the first step in a process intended to lead to a more transparent and simpler product range. FSMA published a consultation note on 10 July 2012 which was based on the responses to a call for comments on the introduction of a regulatory framework for the distribution of structured products to retail investors.
  • 06/2011 FSA Feedback Statement (FS11/3): Product Intervention – Feedback on DP11/1
    In this Feedback Statement the FSA summarised the feedback it received to the questions posed in its earlier Discussion Paper (DP11/1) and its responses to such feedback. The FSA also considered the place of product intervention in relation to other relevant projects (such as the Treasury’s work on simple products, development of the Financial Conduct Authority (the FCA) and work underway at EU level on product governance responsibilities), and discussed its next steps and expectations for the future.
  • 06/2011 FSA Paper on Proposals for the Approach to Regulation by the FCA
    This document sets out how the FCA will approach the delivery of its objectives and outlines the FSA’s initial thinking which has been further refined in the period between then and now. The FSA published it to inform public debate and facilitate stakeholder engagement and provide input for the pre-legislative scrutiny and parliamentary debate on the Financial Services Bill.
  • 01/25/2011 FSA Discussion Paper (DP11/1): Product Intervention
    In this Discussion Paper, the FSA stated that its existing regulatory approach had not prevented a series of product failures leading to significant customer detriment. It therefore proposed a much more interventionist and intrusive approach to regulation in this area involving earlier regulatory intervention and subjecting firms to greater supervisory and enforcement focus.
  • 03/2010 FSA Policy Statement (PS10/6): Distribution of Retail Investments
    In June 2009 the FSA published a consultation paper, CP09/18, which contained detailed proposals for implementing the RDR. The proposals sought to: (i) improve the clarity with which firms describe their services to consumers; (ii) address the potential for adviser remuneration to distort consumer outcomes; and (iii) increase the professional standards of advisers. This Policy Statement reported on the feedback received, and presented the FSA’s final rules on the first two elements of the proposals.
  • 06/2007 – 12/2012 Retail Distribution Review
    The Retail Distribution Review (RDR) is a review by the FSA of the UK retail investment market. In the RDR, the FSA has taken a new approach to policy making, undertaking an open consultation with industry and consumers to establish and address the persistent problems in the retail investment market, which have resulted in insufficient consumer trust and confidence. The FSA aims to restore trust and confidence in the industry and, as a result, increase consumer access to financial advice and ultimately, to encourage consumers to save.
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