Issue 74 - November 2020

Welcome to the latest edition of Gem Compliance’s monthly regulation newsletter. The aim of the newsletter is to present a summary of relevant industry news which has occurred during the month in an easily digestible format. As such, not all sources of industry information or FCA publications (and no PRA publications unless specified) may be included.  

Clients and associates of Gem Compliance should periodically check the FCA’s, and where relevant, the PRA’s websites for regulatory developments. We hope you find this newsletter useful and should you have any feedback, compliance queries or require advice on any of these topics, please do not hesitate to contact us.


  1. Other Newsletters and Updates
  2. Main Features:
    1. FCA statement on approach to share trading obligation
    2. Speech: Facing the Future - Challenges and Priorities for the FCA
    3. FCA policy statement on extending SM&CR implementation deadlines for solo-regulated firms
    4. Consultation paper on changes to regulatory fees and levies
  3. Other Publications
  4. FCA Press Releases
  5. Speeches
  6. Enforcement Actions and Prosecutions
  7. Industry News:
  8. Brexit
  9. Financial Crime
  10. Data Protection
  11. Pensions and SIPPs
  12. Other
Other Newsletters & Updates

November has been a significant month for world news, beginning with the United States electing their 46th President, Joseph Biden. Although around the UK many areas are back in local lockdowns, promising advances have been made in the battle against COVID-19 as various sources announce vaccines that could turn the tide of the pandemic. Finally, passporting will end on the 31st of December this year, and EU laws and rules relating to the single market will no longer apply.  However, because EU legislation has been onshored, the majoring of requirements that applied before the end of the transitional period will continue to apply. 
The FCA have published their November Regulation Round-up which emphasises the entry to this new phase, where it highlights that it has been taking steps to prepare for all scenarios at the end of the transition period and expect firms to be doing the same.  The FCA also highlighted that Solo-regulated firms must submit their Directory Persons data via Connect by the 31st of Match 2021 using the single-entry submission form. The FCA continues to update its dedicated Brexit webpage and firms are reminded to check this regularly for any updates.  
The latest Policy Development Update from the FCA was last updated on the 6th of November 2020. 
The ICO’s November newsletter has now been issued and can be found here.
October’s PRA Regulatory Digest has been published
The Financial Ombudsman has also published newsletter 155.

Main Features

1. FCA statement on approach to share trading obligation

On the 4th of November 2020, the FCA issued a statement setting out its approach to the share trading obligation at the end of the Brexit Transition Period if mutual equivalence is not agreed. The FCA plan to use the Temporary Transitional Power (TTP) to avoid disruption in the market and allow firms to continue trading all shares on EU trading venues and systematic internalisers (Sis) where they choose to do so, and where the regulatory status of those venues and Sis permits such activity. The FCA will publish a transition direction to implement this before the end of the transition period.   However, it will monitor market developments closely and review the use of the TTP if conditions change.

The FCA explains that this approach will preserve UK-based firms' ability to execute their share trades at the venues where they can get the best outcomes for themselves and their customers. It will also mean firms do not have to change their systems for trading shares during a period where minimising unnecessary operational disruption will be important.

Under this approach, all EU trading venues that continue to have UK participants or undertake relevant regulated activity in the UK from the end of the transition period will need to be:
  • A UK recognised overseas investment exchange;
  • Using the temporary permissions regime; or
  • Certain that their activities meet all the conditions required to benefit from the overseas persons exclusion.
The FCA will discuss with market participants and trading venues the future steps that may be needed to protect the integrity of UK markets and to ensure that UK participants can continue to achieve high standards of execution for their clients. These discussions will include whether the MiFID II calibrations remain appropriate for the UK in the absence of its current equivalence being recognised.

2. Speech: Facing the Future - Challenges and Priorities for the FCA

On the 12th of November, the CEO of the FCA Nikhil Rathi delivered a speech regarding the future challenges and priorities for the FCA. The first section of this speech was based around the environment currently being dominated by Coronavirus and Brexit. He highlighted the work the FCA have done to face the scale of the challenges brought by the pandemic, including IT engineers working around the clock, and frontline financial services workers keeping vital services available in rapidly changing circumstances. He discussed that £14.7billion in equity was raised on UK markets between April and June this year, and the issuance of corporate debt by UK companies in June increased by 247% compared to January. 
Mr Rathi explained that while ultimately the FCA can’t intervene to stop firms from failing in the face of economic distress, it is expected that a significant number of regulated firms will fail in the months ahead, and the FCA are working to ensure that where this happens, the resulting harm is minimal.  He stresses that although the COVID-19 crisis has heavily dominated the work the FCA is undertaking, Brexit is still a main priority, as temporary regimes are put into place to minimise disruption. He believes that the FCA is ready to take on a new set of responsibilities onshored into the UK regulatory framework. Mr Rathi advises that the FCA is continuing to operate in an open, co-operative way, providing support to the Government in negotiations and deepening relationships with regulators. The final priority he highlighted on the current environment was the commitment to upholding high international standards and maintaining open markets.
He also discussed looking to 2021 and beyond. In tackling the immediate challenges, Mr Rathi highlighted that the industry should not lose sight of long-running issues that are reshaping financial services, some examples are as follows:
  • gaps between generations in terms of wealth and opportunity,
  • increasing pressure on the financially vulnerable, stretched or distressed, 
  • the growth of big data, machine learning and artificial intelligence posing new ethical and regulatory questions along with great potential for innovation,
  • and, in a sustained period of low interest rates, shifting consumer incentives towards high-risk investment opportunities at a time when consumers are bearing more of the responsibility for their own investment decisions.
He went on to highlight that all of these issues are potentially dwarfed in terms of impact by climate change. He emphasised that the FCA plans to require companies make better disclosures around the effects of climate change on their business, in line with recommendations of the Taskforce on Climate-related financial disclosures. This new disclosure will cover two-thirds of the market, or nearly £2 trillion, of the capitalisation of equities on the UK Official List. 

The third and final topic he discussed was transformation at the FCA. To address the issues set out above, the FCA will embark on an ambitious transformation, impacting every area of the organisation, including culture, people and technology. Mr Rathi emphasised the need to make further investments in technology to allow a smarter collection and use of data.  
He expanded on the use of data issue, expressing that with around 60,000 regulated entities to supervise, the FCA needs to make further investments in a more digital and data-enabled approach. He believes this will allow them to intervene sooner to reduce harm to consumers and markets.  Smarter collection and use of data should result in a lower total cost of regulation for well-run financial services firms.  
The topic of diversity and inclusion within this transformation was also covered. The FCA recognises that delivering on the Women in Finance Charter is a key issue and acknowledges the need for genuine diversity of thought in the organisation. Mr Rathi finished by advising that the transformation of the FCA and the way it works will underpin all of its efforts and priorities for the foreseeable future, to deliver more for consumers, firms and markets by ensuring it is as effective and efficient as it can possibly be.

3. FCA policy statement on extending SM&CR implementation deadlines for solo-regulated firms

On the 28th of October, the FCA published the policy statement PS20/12: Extending implementation deadlines for the Certification Regime and Conduct Rules for solo-regulated firms.  The FCA discussed increasing the deadlines in July 2020 in CP20/10, and PS20/12 sets out the final confirmed rules and summarises the feedback received.  The majority of respondents were supportive of the suggestions.
PS20/12 confirms that the deadline for the below requirements have been extended from 9 December 2020 to 31 March 2021:
  • The date the conduct rules come into force for staff who are not senior managers, certification staff or board directors.
  • The date by which relevant employees must have received training on the conduct rules.
  • The deadline for submission of information about directory persons to the Financial Services Register.
  • References in the FCA's rules to the statutory deadline for assessing certified persons as fit and proper.
The FCA will also delay the SM&CR implementation deadlines for claims management companies by an equivalent period. This means that a claims management firm receiving full authorisation on or after 9 December 2019 will have just over 15 months after the date of its full authorisation to meet the same set of requirements as above.
The changes will affect all FCA solo-regulated firms authorised to provide financial services under the Financial Services and Markets Act 2000 (FSMA).  Appointed Representatives are in the scope of the extension for the deadline reporting for Directory Persons (where Appointed Representatives are undertaking business with clients and require a qualification to do so).  
The FCA encourages all organisations to meet the original deadline of 9 December 2020 wherever possible. Solo-regulated firms (except benchmark administrators) must have fully embedded the certification regime and conduct rules into their firms’ procedures and culture, and reported information on directory persons by 31 March 2021.

4. Consultation paper on changes to regulatory fees and levies

On the 19th of November 2020, the FCA published the consultation paper CP20/22: Regulatory fees and levies: policy proposals for 2021/22. The FCA are consulting on proposed policy changes to the way they will raise fees from 2021/22. The FCA proposals:
  • Revalorise and simplify all FCA authorisation application fees and introduce some new transaction fees 
  • Outline the structure of periodic fees for cryptoasset businesses
  • Set out the third stage of the FCA's consultation to introduce income to calculate periodic fees for firms that operate multilateral trading facilities and organised trading facilities 
The consultation will apply to:
  • Any businesses considering applying for FCA authorisation or registration
  • Any existing fee-payers which may vary their permissions
  • any fee-payer considering a change in control or making appointments which are subject to the senior managers regime 
  • any cryptoasset business
  • firms in the Multilateral Trading Facilities and Organised Trading Facilities sub-set of the market infrastructure provider B fee-block
For example, the current fee for straightforward applications is £1,500, the new proposed fee will be £2,500. For moderately complex application requests, the fee is £5,000, this will potentially be raised to £10,000. A detailed list of the fees and levies changes can be found in the consultation paper. It is likely to be applied to new applications submitted from the 1st of April 2021.  
The deadline for comments on CP20/22 is 22 January 2021. The FCA plans to publish its response and the final fee rates and levy rules in a Handbook Notice in March 2021. 

Other Publications

FCA Coronavirus Publications
On his first Inside FCA Podcast Interview, Nikhil Rathi discusses the FCA’s pandemic response. He discusses the central role the FCA is playing in the recovery of the UK economy, and its priorities: consumer investments, credit, payments, fair value and the transformation of the FCA. Explaining his thoughts on a post-Brexit world, he says the organisation will work hard on new areas of finance, particularly supporting innovation and fintech, to make sure the regulatory framework continues to adapt to significant changes that are happening now.

The FCA has published a call for input seeking views into how the unsecured credit market is changing, particularly in light of the COVID-19 pandemic, and how regulation can support this market. The call for input is focused on four key themes:
  • Drivers and use of credit
  • Change and innovation in the supply of credit
  • The role of regulation in unsecured credit markets
  • The impact of COVID-19 and the FCA’s response.
The FCA provided some updated information concerning Financial Crime in reference to the UK Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Schemes (BBLS).  The FCA states:
  • When distributing any top-up loans, the FCA would expect firms to have assessed and addressed any specific flags (suggesting a customer poses a higher risk of, for example, fraud, money laundering or terrorist financing) that they became aware of at the time of, or subsequent to, the original loan issue. 
  • For both top-up loans and new loans, firms should also consider the risk of fraud and, in particular, risks posed by new customers seeking access to the BBLS. In such cases, firms should ensure that robust customer due diligence (CDD) processes are applied in accordance with requirements set out under the BBLS rules and the Money Laundering Regulations 2017.
The FCA published correspondence with the Financial Ombudsman Service (FOS) reconfirming the FOS’ approach to assessing complaints arising from firms’ acts or omissions during the pandemic.  In response, Caroline Wayman, Chief Executive and Chief Ombudsman at the FOS, confirms the FOS' approach to complaints. She is confident that the FOS continues to provide an appropriate framework, which should give financial businesses the certainty that complaints will be dealt with fairly. Wayman explains that in deciding what is fair and reasonable in the circumstances of an individual complaint, the FOS must take account of relevant law, regulators' rules, guidance and standards, codes of practice and what the ombudsman considers having been good industry practice at the time. Wayman clarifies that the FOS will continue to take account of the FCA's revised expectations of what constitutes compliance with the requirements. The FOS will continue to engage with firms directly on the issues affecting them.
The FCA to announce further proposals to support consumer credit borrowers impacted by coronavirus.


The FCA announced that it will participate in cross-border testing of financial products and services organised by the Global Financial Innovation Network (GFIN).  The FCA will be one of 23 regulators participating in the testing.  The GFIN is inviting applications from firms to test innovative financial products, services, business models or regulatory technology across more than one country or jurisdiction. The deadline for applications is 31 December 2020. This timeframe is based on a decision by the GFIN to extend the application window to nine weeks to allow firms more time to consider and prepare their applications. To support the application process, the GFIN has developed several tools and solutions to improve the cross-border testing framework for a new cohort of firms, which the FCA has also published. These include: 
  • A single-entry application form for firms.
  • Cross-border testing FAQs to help firms understand the process
  • An evolved Regulatory Compendium that clarifies the remit and interests of participating regulators and the types of innovation services available.
The testing builds on the lessons learned following the GFIN’s 2019 cross-border pilot.

The FCA responded to the Chancellor’s statement on the future of UK financial services, confirming the FCA will continue working with the Government and BOE to deliver the plans. The Chancellor’s statement set out announcements on UK government initiatives and decisions relating to the following:
  • Equivalence – the UK has taken financial services equivalence decisions relating to EU and EEA member states
  • Access to UK markets and competitiveness – HM Treasury will launch a call for evidence on the UK's overseas regime, establish a taskforce on the UK's listings regime and consult shortly on the UK's regime for investment funds. The UK will also treat financial services exports to the EU the same as for other countries, which means that UK firms will be able to reclaim input VAT on financial services exports to the EU.
  • Payments and digital currencies – HM Treasury will shortly publish plans to support the payments sector, following the conclusion of the first stage of the Payments Landscape Review.
  • Sustainable finance – the UK intends to mandate climate disclosures by large companies and financial institutions by 2025, implement a new "green taxonomy" and issue its first ever Sovereign Green Bond in 2021, subject to market conditions.
The FCA also responded to the Treasury’s announcement on equivalence. The Treasury has announced its plan to take equivalence decisions in respect of the European Economic Area (EEA) states across a number of financial services areas. These will come into effect at the end of the transition period. In the Treasury document, it sets out the model for the operation of the framework. The document covers:
  • The principles underlying the framework. HM Treasury intends for the framework to be outcomes-based, evidence-based and transparent, as well as providing a stable and reliable arrangement for cross-border market access.
  • The assessment and decision-making process. The document sets out the procedures it will follow when assessing other jurisdictions' financial services regimes and when making equivalence determinations.
  • Ongoing monitoring and withdrawal. HM Treasury sets out its approach to monitoring equivalence determinations and undertaking reviews of equivalence and exemption determinations. It also sets out its approach to withdrawing equivalence.
HM Treasury states that it will monitor the equivalence framework on an ongoing basis in accordance with the principles set out in the guidance document.

The FCA issued a statement warning firms to be responsible when handling client data. The current economic climate is changing the way many firms work and may cause some to leave the market or merge with other firms.  In this event, firms must make sure they lawfully process and transfer client data. Before transferring clients’ personal data, firms should consider whether this is fair and in the interests of clients, as per the Principles for Business. Firms should also be mindful of the information needs of their clients and communicate with them clearly and fairly.  The FCA explains that it will act where it recognises breaches of the FCA Handbook requirements. It expects firms that intend to transfer or receive personal client data to be able to demonstrate how they have considered the fair treatment of consumers and how their actions comply with data protection and privacy laws.

The FCA published a statement on certain FCA work, providing an update on work that the FCA intends to either stop or postpone in light of the ongoing impact of COVID-19 and economic conditions. Key changes to ongoing work are as follows:
  • Duty of Care work has been delayed and the FCA now aims to consult on potential options in Q1 2021
  • Work relating to introducing a single easy access rate (SEAR) for cash savings has been stopped
  • The FCA has also stopped work relating to the Platform Exit Fees Consultations 
The HM Treasury, PRA and the FCA have issued a joint statement on the implementation of prudential reforms contained in the Financial Services Bill. As the Financial Services Bill continues its progress through Parliament, the three organisations consider it fitting to update the industry on proposed timelines for introducing the UK’s Investment Firms Prudential Regime and implementation of those Basel 3 reforms which make up the UK equivalent to the outstanding elements of the EU’s 2nd Capital Requirements Regulation. They have decided to target an implementation date of the 1st of January 2022 for these two regimes. This follows feedback from the industry in relation to these specific proposals and in response to the Regulatory Initiatives Grid in September 2020. 

Consultation Papers

The FCA published the following consultation alongside statement advising that they are consulting on new benchmark powers. ICE Benchmark Administration (IBA), the FCA-regulated and authorised administrator of LIBOR, has announced that it will consult on its intention that the euro, sterling, Swiss franc and yen LIBOR panels would, subject to confirmation following IBA’s consultation, cease at end-2021. The consultation will run until the 18th of January 2021. 

Policy and Guidance Statements

PS20/13: Amendments to the open banking identification requirements. The FCA announced changes to open banking identification requirements to limit the risk of disruption to open services after Brexit.  The FCA’s changes will permit UK based third-party providers (‘TPPs’) to use an alternative to eIDAS certificates to access customer account information from account providers, or initiate payments, after Brexit.  Firms must act to ensure they can continue to provide open banking services. The European Banking Authority has stated that eIDAS certificates of UK third-party providers will be rescinded when the transition period ends on 31 December 2020. Without intervention, UK-based third-party providers will be unable to provide open banking services to consumers post-Brexit. The changes outlined in PS20/13 will permit UK-based TPPs to continue accessing customer data and initiating payments by using alternatives to eIDAS certificates. The changes will mean:
  • UK-based TPPs will likely need to obtain a new certificate to be able to continue to provide open banking services in the UK, post-Brexit.
  • Account providers will likely need to make technical changes to their systems to enable TPPs to continue accessing customer account information, by accepting an alternative certificate and informing TPPs as soon as possible which certificates they will accept.
Firms must review the changes immediately and implement any necessary changes.
PS20/14: Delay to implementation of the European Single Electronic Format (ESEF). This policy statement sets out the FCA’s decision to delay, by one year, the mandatory requirement related to the European Single Electronic Format. The statement also provides an update on extending deadlines for the publication of financial statements by listed companies in response to COVID-19. This policy statement applies to issuers with transferable securities admitted to trading on a UK regulated markets or who are considering admission to trading on a UK regulated market. 
The latest Primary Market Bulletin, edition 31, has been released.

FCA Press Releases

The Treasury, BOE and the FCA will be convening an industry working group to facilitate investment in productive finance. The press release stated that investment in productive finance represents investment that expands productive capacity, furthers sustainable growth and can make a significant impact to the real economy, such as plant and equipment, research and development, technologies, infrastructure and unlisted equities related to these sectors. It notes that this investment can pose challenges such as the potential necessity of long-term commitments from investors. The working group will:
  • Propose solutions for barriers to investment,
  • Propose a roadmap, timetable and set of actions to implement these solutions.
The working group will be co-sponsored by the Economic Secretary to the Treasury, the BoE Governor and the FCA Chief Executive. Its membership will be taken from market participants including banks, asset management firms, pension funds and insurance companies, corporates, infrastructure firms, wealth managers, investment platforms and trade associations representing various relevant sectors and markets. Further details concerning the membership of the working group, which will be by invitation from HM Treasury, the BoE and the FCA, will be announced in the near future. 

The FCA updated its webpage on firms' preparations for the end of the transition period to set out deliberations for EEA firms conducting business in the UK. The FCA states that it expects EEA firms that are not intending to take advantage of the temporary permissions regime or the financial services contracts regime to notify the FCA of their plans by contacting it directly or through their usual supervisory contacts.

The FCA published a new webpage for investment managers, clarifying the process for reporting income for Financial Services Compensation Scheme (FSCS) levy calculations. The FCA clarified as it became aware that some firms may be reporting income for the FSCS levy that is being reported unnecessarily. It relates to the requirements on asset managers to report "look through" income for the FSCS levy. Income relating to beneficiaries who are FSCS-eligible claimants, as defined by FCA rules at COMP 4,  must be reported under Chapter 6 of the Fees manual. The FCA explains that, when calculating annual eligible income there are two options: to only include such annual income if it is attributable to business in respect of which the FSCS may pay compensation or include all such annual income. This means that firms must include income they know relates to eligible claimants, and income that may relate to eligible claimants. If the firm cannot identify whether the underlying beneficiary is an eligible claimant, income derived from that business must be included, because the FSCS may pay compensation in relation to it. The FCA further clarifies that, if the firm can identify income that relates to beneficiaries who are not eligible claimants, that income can be excluded. In any case, a firm can report all income if it chooses to do so.


Tom Mutton, Director of Fintech at the Bank of England gave the speech: Response, and recovery: fintech during the COVID-19 crisis and beyond. Mr Mutton provided information on various key areas including:
  • Why FinTech is important to the Bank of England
  • The Bank of England’s FinTech priorities 
  • How innovation helped the economy respond to the pandemic
  • The importance of regulation. 
Nausicaa Delfas, Executive Director of International at the FCA, delivered the speech: Towards the end of the transition period – getting ready for a new environment. Ms Delfas highlighted that firms should continue to prepare for the UK exit from the transition period and ensure that organisations don’t become complacent. She went on to comment that the FCA is building its global role outside of the EU and stressed it was important that the FCA demonstrate a continued commitment to open markets and free trade. 

Andrew Bailey, the Governor of the Bank of England, discussed climate change in his speech: The time to push ahead on tackling climate change. The speech highlights what the BoE is doing ensure the financial system plays its part in the tackling of climate change. He mentions the focus on data and disclosure, and the launch date of June 2021 to introduce a climate stress test exercise. 

Andy Haldane, Chief Economist at the BOE, delivered the speech: Is home working good for you? Mr Haldane said in a speech that the pandemic had reshaped our working lives, our economic contributions and our well-being, but it was unclear whether this change was for the better.  He believes that home working had probably reduced capacity for creative thought. Haldane mentioned that creativity is important because it fostered innovation, which in turn fuels economic growth. 
Speech by Jonathan Davidson, FCA Executive Director of Supervision – Acting flexibly and treating customers fairly in the face of a pandemic. The main highlights of this speech mention:
  • the pandemic being a challenging new scenario, and consumer credit firms and their staff have taken decisive and effective action,
  • with this new phase of the crisis, there is no time for firms to rest on our laurels,
  • the FCA wants to make clear its expectations around forbearance, the operational challenge for firms to overcome, the importance of vulnerability, and the future direction of the industry
Green Horizon Summit: Rising to the Climate Challenge - speech by Nikhil Rathi, CEO of the FCA. Mr Rathi explains the FCA wants green and sustainable finance to be at the heart of UK economy and that comprehensive financial regulation will be vital in facilitating the transition to a less carbon-intensive economy. The FCA is prepared to support the UK government to achieve its commitment to at least match the ambition of the EU sustainable finance action plan in the UK. Other points of interest include:
  • Transparency – The FCA will introduce a new rule that will require companies to include statements about Task Force on Climate-Related Financial Disclosures
  • Trust – The FCA wants to ensure consumers can trust sustainable products. The FCA has developed a set of principles to help firms interpret existing rules requiring that disclosures are fair, clear and not misleading, including when they submit new products to the FCA for authorisation. The FCA plans to discuss these principles with industry with a view to finalising them in early 2021
  • Tools – the Climate Financial Risk Forum will look to refine and develop the recommendations contained in its June 2020 guide over the next year.
Finally, there was a speech by Verena Ross, ESMA Executive Director, on future challenges for fund managers. Among other things, the speech focuses on two key topics for the asset management sector: delegation in the light of the end of the Brexit transition period and sustainable finance.

Enforcement Actions and Prosecutions

The FCA publicly censured Aviva plc for listing and transparency rules breach, specifically for making an announcement that had the potential to mislead the market.
The Serious Fraud Office entered into a Deferred Prosecution Agreement with Airline Services Ltd (ASL).  ASL principally delivered services and products for the renovation of commercial aircraft interiors. ASL accepted responsibility for three counts of failing to prevent bribery, contrary to section 7 of the Bribery Act 2010, arising from the company's use of an agent to win three contracts worth over £7.3 million to refit airliners for Lufthansa.
The FCA has released a press statement advising it has commenced High Court proceedings over unauthorised collective investment schemes. The proceedings are against Mr Robin Forster, Fortem Global Limited and Mr Richard Tasker, over alleged links to investments in care homes in which investors appear to have lost at least £30 million. The defendants allegedly carried out activity in relation to the operation and/or promotion of collective investment schemes. 

The FCA banned three individuals from working in the financial services industry for non-financial misconduct. The named parties were Russell David Jameson, Mark Horsey and Frank Cochran who were all convicted of serious non-financial indictable offences while working in financial services. 
British Airways was fined by the Information Commissioner’s Office (ICO) £20million for failing to protect the personal and financial details of more than 400,000 of its customers. Marriott International Inc was also fined £18.4million for failing to keep millions of customers’ personal data secure. In addition, Ticketmaster was fined £1.25million for failing to protect payment details. 
The ICO also took enforcement action against Experian after a data broking investigation. The ICO has ordered credit reference agency Experian to make fundamental changes to how it handles people’s personal data within its direct marketing services. The enforcement notice follows a two-year investigation by the ICO into how Experian, Equifax and TransUnion used personal data within their data broking businesses for direct marketing purposes. A complaint from the campaign group Privacy International to the ICO also raised concerns about the data broking industry, specifically Equifax and Experian.

The FCA has fined TFS-ICAP Ltd, an FX options broker, £3.44m for communicating misleading information to clients. Between 2008 and 2015, brokers at TFS-ICAP carried out the practice of ‘printing’ trades. This involved brokers communicating to their clients that a trade had occurred at a particular price and/or quantity when no such trade had actually taken place. TFS-ICAP brokers, across multiple broking desks, did this openly and over a prolonged period. Printing trades sought to encourage clients to trade when they might not have done, to generate business for TFS-ICAP. As such, TFS-ICAP did not observe proper standards of market conduct. Furthermore, TFS-ICAP did not react to warning signs that printing might be taking place or act to address the risk of it, and so failed to act with due skill, care and diligence.

Other industry news: 

The House of Commons Treasury Committee published a press release announcing the launch of a new inquiry into the future of financial services in the UK after the Brexit transition period ends.  It has also published a call for evidence which provides more detail on the scope of inquiry.  The Committee will primarily explore how financial services regulations should be created and scrutinised by Parliament, as EU directives will no longer dictate new rules and regulations.  The Committee will also consider the government's financial services priorities when it negotiates trade agreements with third countries. One further point to be considered will be how regulators are funded and the extent to which financial services regulation should be consumer-focussed. The deadline for the call for evidence is 8 January 2021. 

The Financial Stability Board (FSB) published a report on the financial stability impact of the pandemic and policy responses to it. The report sets out an update on financial stability developments and risks relating to COVID-19 since its July 2020 report. The FSB also studies the international policy responses to the pandemic since July 2020 and examines if the policies have been effective. The report goes on to set out a suggested path to address concerns relating to the pandemic:
  • Promoting the resilience of the global financial system. The FSB intends to continue assessing information on financial stability risks from the pandemic and on jurisdictions’ policy responses.
  • Promoting effective policy responses to COVID-19. The FSB proposes to continue facilitating the sharing of information on jurisdictions' policy responses and on their use of tools to design, calibrate and assess policies, to monitor the use of flexibility within standards and the consistency of policy responses with international standards and to support crisis management preparedness, including by enhancing co-operation and co-ordination through crisis management groups and colleges. 
Financial Crime

The National Crime Agency (NCA) published its Suspicious Activity Reports Annual Report 2020. The NCA received a record number of 573,085 SARs, which was a 20% increase from the previous year. There were also 62,409 requests for a defence against money laundering or terrorist financing (DAML), an 81% increase for the same period. During 2020, £172 million was denied to suspected criminals as a result of DAML requests, an increase of 31% on the previous year's £132 million and over three times the £52 million denied in 2017/18. More than £100 million of this was in relation to cases where there was no previous or existing law enforcement investigation.

Data Protection

The ICO published a statement on recommendations issued by the European Data Protection Board (‘EDPB’).  The ICO is reviewing two recommendations following the CJEU Schrems II ruling in July, where the judgement confirmed how EU standards of data protection must travel with personal data when it goes overseas. The first recommendation updates the European Essential Guarantee for surveillance measures. The second discusses the additional measures firms may take to support the international transfer of data to meet EU standards. This recommendation follows previous EDPB guidance stating that organisations must conduct a risk assessment as to whether a transfer tool provides enough protection within the legal framework of the destination country. If not, organisations must put extra measures in place to mitigate the risks.

Pensions & SIPPs

The FCA, The Pensions Regulator and the Money and Pensions Service have published a combined statement on the Rolls-Royce defined benefit pensions scheme.  The FCA has issued a data request to a number of advisers who have recommended transfers from the Rolls-Royce defined benefit pension scheme, in order to be vigilant against the risks associated with increased transfer requests. The FCA expects all advisers to be clear on the FCA’s expectations when offering advice to members of the scheme. Where the FCA sees unsuitable advice, or bad practice, it will take action. The FCA, TPR and MaPS commented that transferring out of a defined benefit pension scheme is unlikely to be in the best interests of most consumers.
The pensions industry is being urged to publicly pledge to combat pension scams as part of a major new campaign launched by The Pensions Regulator. Pension providers, trustees and administrators are advised to help protect savers who are debating cashing in their pensions by ensuring they can spot the warning signs of a scam and are educated of any risks when making transfers. The industry will also be expected to educate themselves about current and emerging scam tactics and adopt best practice when it comes to transfer due diligence. The Pensions Regulator has also launched an online interactive training module outlining the extensive procedures it expects all trustees and providers to follow to keep savers safe.


London FinTech company Lanistar hit the headlines this month after the FCA identified the firm as a potential investment scam. Following a number of consumer reports, the firm was issued a warning stating that the firm was providing services or products without authorisation. However, the FCA withdrew its warning following changes made by Lanistar. The changes including adding appropriate disclaimers to marketing materials to confirm that it was not conducting regulated activities and agreeing to amend certain aspects of their website. 


This newsletter contains generic information and has been generated for professional clients and associates of Gem Compliance Consulting Limited only and should not be regarded as advice. We will not be liable for loss, however caused by parties acting on the information contained herein.

Copyright © 2020, Gem Compliance Consulting Limited, All rights reserved.

Gem Compliance Consulting Limited, Registered in Scotland, no. SC 294346.

This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Gem Compliance Consulting Limited · Hudson House · 8 Albany Street · Edinburgh, Midlothian EH1 3QB · United Kingdom

Email Marketing Powered by Mailchimp