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19 December 2018

The FCA published CP18/39 on 7th December 2018 setting out its proposals: (1) to make changes to how firms maintain up to date Firm Details on the Financial Services Register (the Register) and (2) to the high net worth exemption under the Consumer Credit sourcebook (CONC).

  1. Maintaining up to date Firm Details

The FCA state that they are aware that they currently hold inaccurate and incomplete Firm Details for a significant number of firms, indicating high levels of non-compliance with the FCA’s rules. For example, firms may not provide up to date information about their primary compliance contact or provide up to date contact details. The primary effects of this is that the FCA are not always able to effectively communicate with firms and firms, consumers and other stakeholders, including other regulators, being misled by inaccurate or outdated information displayed on the Register.

The FCA propose to address this issue by:

  • strengthening the current requirement for firms to carry out an annual ‘accuracy check’, by requiring firms whose Firm Details are accurate to provide the FCA with confirmation of this. The FCA propose strengthening the annual check requirement by requiring firms whose Firm Details have not changed to confirm this.
  • This would be done on the FCA’s Connect system following completion of firms’ annual check by ticking a ‘no change’ box. The tick box would be added to the existing reporting form.
  1. High Net Worth Exemption (CONC)

Under articles 60H and 60Q of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, certain credit agreements and consumer hire agreements with high net worth individuals are exempt from regulation, subject to certain conditions. One of these conditions is that a statement has been made in relation to the individual’s income or assets which complies with FCA rules. The relevant rules, which are set out in Appendix 1 of CONC, state that an individual high net worth borrower or hirer can enter into an exempt agreement if they receive a statement of high net worth signed by the lender or owner or an accountant who is a member of a professional body listed in CONC App 1.4.3. The FCA propose to add the Association of Accounting Technicians (AAT) to this list. The AAT is a member of the International Federation of Accountants. Adding the AAT to the list increases the range of options for individuals seeking a statement of high net worth.

For more information, please contact Jourdain on 01423 522599 or email Jourdain.Tambo@claimsmanagementcompliance.co.uk.

By David Petty

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