consumer credit seminar bovill, sgh martineau, ccta
DESCRIPTION
Bovill - the UK financial services regulatory consultancy - runs regular briefings. To look at Consumer Credit Regulation we teamed up with law firm SGH Martineau and invited the Chief Exec of the Consumer Credit Trade Association to join us. Further information on the event is below: CONSUMER CREDIT - KEEPING YOUR CUSTOMERS CLOSE AND THE REGULATOR CLOSER It's five months since the FCA took over the regulation of consumer credit and we are already seeing the impact. Firms with interim permission should be planning carefully for full authorisation and ensure they put in place the right framework to meet tougher expectations. Regulatory consultants, Bovill, and law firm, SGH Martineau combined their expertise to host a seminar for those affected by these changes. We were also pleased to welcome a speaker from the Consumer Credit Trade Association (CCTA) to give a trade association's view. • Getting your organisation ready: Prem Gopal Griffith, Bovill Becoming FCA authorised can have a big impact on your firm's culture. Prem looks at the need to review your current business model, how to handle the approved persons regime, and the steps needed to get authorisation. • The Consumer Credit Act and The FCA: Richard Ellison, SGH Martineau Firms will need to make changes to adjust to the approach of the new regulator. Richard looks at the Consumer Credit Act and the legal implications of the move to the FCA. • Trade Association's Viewpoint: Greg Stevens - Chief Executive, CCTA Greg gives a trade association's views on the FCA's objectives, summarise feedback from members, and clarify what firms need to do on an ongoing basis.TRANSCRIPT
0
October 2014
Consumer credit Keep your customers close and your regulator closer
• Transition to FCA regulation:
Getting your organisation ready
Prem Griffith
• The Consumer Credit Act and the FCA
Richard Ellison
• Trade association’s viewpoint
Greg Stevens
Welcome
2
A new regime
• FCA took over from OFT on 1 April 2014
A new approach
• OFT licenced, FCA regulates
A proactive regulator
• greater focus on ‘consumer outcomes’
• swifter / more severe action where firms are
not treating customers fairly
Personal liability
• focus on firms’ and individuals responsibility
FCA focus on consumer credit
3
WARNING FOR ROGUE PAYDAY LOAN FIRMS
Consumer credit is on the front page
4
Lining up your landing slot – interim permission
If you were OFT licenced at 1 April you:
• were given FCA interim permission
• can only undertake the activities you were
licenced to perform at 1 April 2014
• will be given a ‘landing slot’ to submit full
application for authorisation
• Supervision is minimal during the interim
stage
Landing slots run until early 2016
• generally speaking, the FCA is prioritising
the more ‘risky’ firms
5
Getting authorised
An application not a registration
• understand the relevant rules (FCA handbook and CONC)
• expect to be challenged by the FCA case officer
• include a regulatory business plan
• process likely to take 3-6 months.
Interim
permission
New
entrants
Limited
permission
Full
permission
6
What to look out for
Treating customers fairly
• Embedding TCF in your culture
• Being able to demonstrate to FCA
Managing customer-facing elements
• Putting adequate policies and
procedures in place
Embedding compliance
• Testing and ensuring policies and
procedures are followed and
refreshed
The bad news
…and are hungry
7
The FCA has teeth...
The good news
• have clearly documented business
model and procedures
• have robust governance across all
areas of the business
• have an effective controls framework
• can demonstrate that you are putting
your customers needs and interests at
the heart of the business
• are trying to do the right thing
8
The FCA is reasonable…
You have nothing to fear from
the FCA if you:
9
Start planning early
Review CONC
• How does it apply to your business model?
Draft a regulatory business plan
• It’s more than just form filling – you will need a regulatory business plan and
potentially policies and procedures to cover operational aspects of business
Show you care
• Think about how to demonstrate you are putting the customer at the heart of
everything you do (even to the extent it conflicts with profitability)
• Especially important if operating in a sector where customers may be
disadvantaged / have low level of financial awareness
Be prepared
• The regulator may ask difficult questions
• But remember if demonstrate that you’re trying to do the right thing,
the FCA will work with you
10
If you’re stuck
• Preparing for regulatory change
• Getting authorised
• Developing your compliance framework
• Ensuring you remain compliant
• Training and coaching for all staff
www.bovill.com
Bovill can help you with:
www.bovill.com
Making a positive difference
THE CONSUMER CREDIT ACT
• Is the CCA still alive and kicking?
• The Consumer Credit Sourcebook (CONC)
• Rules and Guidance
• Review of retained CCA provisions by 2019
THE NEW REGULATOR
• OFT/FCA: A new broom with teeth
• The 11 Principles for Businesses (don’t forget PRIN 11)
• Threshold Conditions
• Your interim permission: Is this fit for purpose?
LEGAL IMPLICATIONS
• Approved Persons: Can they perform their new role? What happens if they don’t?
• IT and data security
• CONC (including CONC 7)
• Skilled Persons: s.166 FSMA
CONSEQUENCES OF NON-
COMPLIANCE
• Legal: No licence?
• Legal: Defective documentation/procedures
• Regulatory: Fines, industry exclusion, criminal prosecution
• Regulatory: You can lose your licence
BIRMINGHAM OFFICE No 1 Colmore Square, Birmingham, B4 6AA T: 0800 763 1000 F: 0800 763 1001 LONDON OFFICE One America Square, London, EC3N 2SG T: + 44 (0)207 264 4444 F: + 44 (0)207 264 4440 BRUSSELS OFFICE Avenue Marnix 28, 1000 Brussels, Belgium T: + 44 (0)207 264 4444 F: + 44 (0)207 264 4440
SGH Martineau LLP is a Limited Liability Partnership registered in England and Wales
Copyright SGH Martineau 2014
FCA Landscape
* Behavioural Economics & Insights
* Consumer Centric
* CONC Rules & Principles
* Proactive v Reactive
The Numbers Game
* 90,000 + CCL’s
* 49,500 Interim Permissions
* 20,000 Authorised Firms 2018 ?
Salami Slicing – Diversity & Complexity
* Pick n’Mix
* Simple v complex
* Innovation & creativity
Consumer Choice v Needs & Aspirations
* MMR
* Insurance Industry experience
* Proportionate & appropriate
* European agenda
* Consumer genie
* The future landscape
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October 2014
Questions