December 2019
By Steven Howard , Head of Mortgage and Lending Intermediaries Compliance Services at The SimplyBiz Group
With all firms beginning to wind down for the festive period, I thought now would be a good time to reflect on the developments and changes from 2019, but more importantly look to the future and ensure all firms are confident that they are prepared to meet upcoming requirements on the compliance calendar.
As all regulated firms will be fully aware and as we have mentioned in a number of Advantage issues already, 2019 saw the introduction of the Senior Managers and Certification Regime, a regulation designed to ensure all authorised individuals should be accountable for their actions, whilst at the same time, expected to work collectively to achieve the outcomes required. Regulated firms now have an ongoing responsibility to adhere to this legislation, and by December 2020, Senior Managers under the regime must be signed off as fit and proper, and all firm administrators need to complete training around the new conduct rules.
Below are some key elements that any firms in the financial sector should have in place at the start of the year (whether regulated or not), as they just make for good business practice as well as having the ability to help with profitability and security.
Registering for Connect:
To ensure your firm is meeting its regulatory responsibilities, from January 2020, as a Consumer Credit regulated firm, you need to be submitting the required information through the FCA’s Connect system. The FCA recently released this message, urging firms to register ahead of time so that they are best placed to meet the requirements when the time comes. This is now part of the reporting requirements from the FCA, so you will now be required to update and confirm the accuracy of your firm details annually (even if there is no change), in line with your Accounting Reference Date (ARD). This must be done using the online platform Connect – also known as mandatory annual update.
GABRIEL reporting:
As all of you who are authorised will be aware, GABRIEL is the FCA’s online regulatory reporting system where you fill in information about your business, and each individual firms’ deadline is set by the FCA, so it is important to keep track on when yours is due. This can be done via logging in to the reporting system on the FCA website here.
Introducer relationships in your business:
When accepting business from an introducer, a principal must meet their regulatory requirements (as set out in the FCA Handbook). In particular, the principal must ensure that they understand and mitigate any risks and that the firm has adequate oversight of its own introducer regime, otherwise, it may result in the firm and its customers experiencing financial harm (e.g. as a result of a scam). We would recommend that any previous due diligence that has been completed around the introducers that you work with is reviewed on a regular basis in order to confirm ongoing appropriateness.
Check your processes and procedures:
Are you clearly documenting your policies and procedures? This is valuable to all firms that are directly authorised by the FCA should there be a requirement for inspection at some future point.
Anti-Money Laundering directive coming next year:
The 5th Anti-Money Laundering directive comes into force on 10th January 2020, so it’s important to ensure you are aware what the new set of requirements will be. The next directive will have more emphasis on electronic means of identification checking (including client due diligence and enhanced due diligence). There will also be stricter controls on beneficial ownership, and evidence will need to be provided on PEP (Politically Exposed Persons) status.
The SimplyBiz Group will be providing further communication on this as soon as the final rules are published, and as always, if you have any further queries on FIBA compliance services, contact the membership team on enquiries@fiba.org.uk.