Today, at Southwark Crown Court, His Honour Judge Tomlinson sentenced Ian James Hudson to 4 years’ imprisonment for one count of fraudulent trading, with two additional terms of 14 months, each reflecting a breach of s19 FMSA, to run concurrently following his earlier guilty plea. This followed charges laid by the FCA namely carrying on a business, Richmond Associates, for a fraudulent purpose and carrying on regulated activities when not authorised or exempt.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
‘Mr Hudson’s defrauding was calculated and persistent over a number of years, preying on victims who believed he was a financial adviser and trusted friend when he was neither of these things. We remind investors to check the FCA’s register of authorised person to ensure any financial adviser is authorised to provide financial advice by the FCA.’
Between 1 January 2008 and 31 July 2019, Mr Hudson advised on regulated mortgages, pensions and other investments and purported to invest significant deposits received by him from clients on their behalf. At no point during this time was he authorised by the FCA to undertake these, or any, financial services, as is required by law. 
In addition, while Mr Hudson told clients that the money they deposited with his business, Richmond Associates, would be invested in various financial vehicles or otherwise put to specific uses, this was not always the case. Instead he used those deposits to re-pay existing clients, to make payments to other individuals, or to fund his own lifestyle. In total, approximately £2m was deposited by Mr Hudson’s clients.
Confiscation proceedings are being pursued by the FCA. Any sums recovered from Mr Hudson will be used to compensate victims.
Notes to editors:

Ian Hudson’s date of birth: 16 April 1966
Previous press release. 
If you believe you have suffered a financial loss as a result of dealing with Ian Hudson, please email [email protected]

Mr Hudson was charged with the following criminal offences between January 2008 and July 2019:

Participating in a fraudulent business, namely Richmond Associates, contrary to section 9 of the Fraud Act 2006;
Carrying on a regulated activity (namely, accepting deposits), without authorisation or exemption, contrary to section 23(1) of the Financial Services and Markets Act 2000; and
Carrying on a regulated activity (namely, advising on investments) without authorisation or exemption, contrary to section 23(1) of the Financial Services and Markets Act 2000.

[Read More] […]

Read More…

The FCA brought proceedings against chief executive, Toby Scott Whittaker, director John Slater and a number of companies involved or connected to the Park First Scheme. A number of further companies involved in the Park First Scheme entered administration in July 2019 and November 2020.
The agreement is conditional on Park First investors approving Company Voluntary Arrangements (CVAs) in respect of these companies, which will give them a say about whether these arrangements and the conditional agreement are acceptable.
The conditional agreement provides for a further £25 million to be available to the investors, on top of the £33 million already secured by the FCA out of the proceeds of the sale of the car park at Luton airport.
Mr Whittaker will need to realise most of his assets to pay the sum of £25 million, which will be paid in instalments on the sale of the assets. If any instalment is unpaid, Mr Whittaker has agreed not to contest the debt for the purpose of any bankruptcy proceedings brought by the FCA.
The full details of the conditional agreement will be set out in the proposals for the CVAs which investors will be able to vote on.
If the arrangements are approved, the defendants will consent to orders that they breached section 19 of the Financial Services & Markets Act, 2000 by operating a collective investment scheme without being authorised by the FCA as required. This admission only applies to the FCA’s case. If the investors do not approve the arrangements and the conditional agreement, the FCA’s proceedings against the defendants will continue.  The trial is fixed for hearing in February 2022.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said: ‘The agreement, if approved, represents a better outcome in the proceedings for investors than could have achieved through continued legal action, given the financial position of the parties.  It also gives investors the final say on the merits of the conditional agreement.’
The FCA first intervened with Park First in 2016, stopping the operation and promotion of the original scheme.  Following the FCA’s action, the scheme was restructured, and investors were offered the chance to get their initial investment back or move into a different scheme. However, the operation proved to be uneconomic and the companies involved in running the scheme entered into administration in July 2019.
Notes for editors

The full list of defendants to the FCA’s claim is as follows: Park First Limited; Harley Scott Residential Limited (previously known as Park First Glasgow Limited); Park First Skyport Limited; Cophall Parking Gatwick Limited; Park First Management Limited; Paypark Limited; Help-Me-Park.com Limited; Group First Global Limited; Toby Scott Whittaker and John Slater.
Park First Freeholds Limited; Park First Glasgow Rentals Limited, Park First Gatwick Rentals Limited and Help Me Park Gatwick Limited entered administration in July 2019. Airport Parking Rentals (Gatwick) Limited and Paypark Limited entered administration in November 2020.
The full list of companies that are to propose CVAs is as follows: Park First Limited; Harley Scott Residential Limited (previously known as Park First Glasgow Limited); Park First Skyport Limited; Cophall Parking Gatwick Limited; Park First Management Limited; Paypark Limited; Help-Me-Park.com Limited; Group First Global Limited; Park First Freeholds Limited; Park First Glasgow Rentals Limited; Park First Gatwick Rentals Limited; Help Me Park Gatwick Limited; Airport Parking Rentals (Gatwick) Limited; Paypark Limited.

[Read More] […]

Read More…

The changes will provide more clarity to consumers about what the products are, the risk presented and information to help understand likely future performance.
The PRIIPs regulation was developed to renew the confidence of retail investors in the financial market and improve their protection. Those who produce, advise on or sell PRIIPs are required to provide a Key Information Document (KID) about the product they are selling.
However, for some products the KID has potential to contain misleading information as a result of the methodologies used in producing performance scenarios and summary risk indicators. There has also been a lack of clarity within the PRIIPs regime over the corporate bond market. This has led HM Treasury to confirm that the UK will diverge from EU PRIIPs regulation to better protect its consumers.
A key element in the FCA’s recent Consultation on the New Consumer Duty was to ensure that firms provide information which is understandable and helps consumers to make properly informed decisions. The FCAs proposed rule changes for PRIIPS will give firms great flexibility to ensure that their communications meet this test.
Sheldon Mills, Executive Director, Consumers and Competition said:
‘Exiting the EU has provided us an opportunity to quickly amend technical standards surrounding key information documents as we know that they are not fully achieving the intended aims. We want to ensure that consumers have what they need through transparent information and furthermore through the reduction of potentially misleading information being displayed.’
Following the UK’s exit from the EU, the Financial Services Act 2021 allows the FCA to specify whether a product can be classified as a PRIIP under the PRIIPs Regulation as well as allowing the FCA to define was is meant by ‘performance information’. The FCA has a range of options on how PRIIPs manufacturers can produce and present performance information most effectively in the KID in order to reduce the risk to consumers.
The FCA is consulting on the most serious concerns over PRIIPs and proposes to:

Clarify the scope of the PRIIPs regulation making it clearer that certain common features of these instruments do not make them into PRIIPS and guidance on the meaning of PRIIPs being ‘made available’ to retail investors
Amend the PRIIPs Regulatory Technical Standards to: require written explanation on performance in the KID; combat the potential for PRIIPs being assigned an inappropriately low summary risk indicator in the KID and; address concerns over applications of the slippage methodology when calculating transaction costs.

Subject to the outcome of this consultation, the FCA plans to amend the PRIIPs RTS by the end of 2021, with any changes made coming into effect on the 1st January 2022.

Notes to editors
1. The Consultation Paper (PDF).

[Read More] […]

Read More…

The FCA has also published correspondence between Sheldon Mills and Dean Beale, CEO of the Insolvency Service setting out how the 2 organisations are approaching these issues and working together to protect consumers who need debt advice and ensuring co-ordinated regulation across the 2 organisations.
Debt packager firms advise consumers on how to deal with their debts, often referring them to an Insolvency Practitioner or debt management firm, for which they receive referral fees. These fees can be many times higher when the firms refer consumers to an Insolvency Practitioner to potentially enter into an Individual Voluntary Arrangement (IVA), or Protected Trust Deed (PTD) in Scotland, than for other debt solutions. The FCA has made very clear to firms that it expects them to manage this conflict of interest to ensure that their advice is right for consumers, not just firms’ financial interests.
The FCA has identified concerns that some debt packager firms appear to have manipulated consumers’ income and expenditure to meet the criteria for an IVA or PTD; used persuasive language to promote these products to consumers without fully explaining the risks involved; and provided advice that did not accurately reflect their conversations with consumers or information that consumers had given. In some cases, the FCA’s view is that firms failed to sufficiently take into account consumers’ circumstances and vulnerabilities, including mental health issues and economic abuse.
Sheldon Mills, Executive Director, Consumers and Competition at the FCA, commented: ‘The practices we’ve seen in this sector fall far short of the standards we expect from firms, let alone those claiming to offer help to people in need. We will not allow firms to profit from debt advice which puts their customers at risk of harm.’
Following the review, the FCA wrote to 5 firms identifying significant concerns over their practices and making clear its concern that the firms were continuing to offer advice to consumers while those issues remained unresolved. The firms all subsequently applied for voluntary requirements to be imposed, which mean that they can no longer provide regulated advice services until the FCA is satisfied that they can comply with the rules.
The FCA has also used its formal powers to remove another firm’s permission to provide debt advice. This firm was using a script for contact with consumers that appeared weighted towards recommending a debt solution that would have generated a referral fee for the firm, whether or not that was suitable for individual consumers.
As part of its priority work to ensure that consumer credit markets work well for consumers, set out in its Business Plan for 2021-22, the FCA is also considering policy changes to address the significant potential for harm through poor advice that the debt packager business model poses. If it concludes that changes are needed, the FCA will consult on proposals later this year.
Consumers who are wrongly advised to sign up to an IVA or PTD may suffer significant harm. They may struggle to keep up the repayments and if they cannot do so, their IVA/PTD may fail. If it fails at an early stage, repayments already made may have largely gone towards the fees for the IVA/PTD rather than paying down debts; they may have backdated interest and charges added to outstanding balances by creditors; and they could be made bankrupt.
There are wider concerns about debt advice and the market for IVAs and PTDs which sit beyond the remit of the FCA, as described in the Woolard Review published by the FCA earlier this year.
Consumers who need help with their debts can get free and impartial advice from the MoneyHelper website or by telephone on 0800 138 7777, provided by the Money and Pensions Service.
Notes to Editors

The 5 firms which applied for voluntary requirements are listed below. Please note that the FCA is not attributing any of the specific practices found in its review of the debt packager market, as listed above, to any of these individual firms:

The firm whose permission to provide debt advice was removed using formal FCA powers is Action On CIO (770254) https://register.fca.org.

[Read More] […]

Read More…

Nikhil Rathi said:
‘The FCA must continue to become a forward-looking, proactive regulator. One that is tough, assertive, confident, decisive, agile.
‘One that acts, acts fast—and where we can’t act, engages enthusiastically with those who can.
‘Continuing to be more innovative, assertive and adaptive.’
In a statement on ‘our role’ the FCA says it will be accountable for its progress on:

setting the bar high to support market integrity and sustainable innovation, ensuring firms start with high standards and maintain them
using new approaches to find issues and harm faster; £120m will be invested in the data strategy over the next 3 years
tackling misconduct to maintain trust and integrity, being proactive at the boundaries of the perimeter
enabling consumers to make informed financial decisions
investing in our people, reshaping our culture and working with others so we achieve more

Nikhil Rathi added:
‘Over the next 18 months you will continue to see an FCA that looks and feels even more different. One that operates differently, partners differently, and communicates differently.
‘One that delivers market integrity and delivers for the consumers that we serve. One that is not only purposeful but that is fit for purpose.
‘There is a lot of work to do. And I am confident that we have the right strategy, the right people and the right ambition to do it.’
The Business Plan sets out the key areas of focus for the FCA in the coming year. 
In consumer markets priorities include:

strengthening rules on financial promotions to protect consumers in relation to investments
continuing to improve standards of pension advice
a consumer campaign on scams and high-risk investments
progressing proposals for a new Consumer Duty to raise standards in firms’ treatment of consumers

In wholesale markets the focus includes:

following the UK’s exit from the EU, continuing to develop plans to make primary and secondary markets work better while maintaining high standards
continuing to support the smooth transition away from sterling LIBOR to alternative risk-free rates

The Business Plan also sets out a number of cross-cutting priorities including:

using the FCA’s authority and influence to work with partners to help drive down the incidence and impact of fraud
improving diversity and inclusion, both at the FCA and in regulated firms
supporting environmental goals by adapting the regulatory framework to enable a market-based transition to net-zero carbon emissions

The FCA announced today that it will begin a review of aspects of the rules on the scope and coverage of Financial Service Compensation Scheme payouts, for specific regulated activities.
The FCA will also be consulting on changing the balance between decisions taken by the FCA executive and the Regulatory Decisions Committee, which is a sub-committee of the Board. The proposed changes aim to streamline decision making on authorisation applications and specific supervisory and enforcement decisions.
The Business Plan commits the FCA to becoming a regulator for the whole of the UK. At present the FCA has offices in London and Edinburgh. It is exploring opening an office in Leeds with at least 100 staff based there in the first phase; doubling headcount in Edinburgh to over 200 over the next 2 years; and establishing a presence in Belfast and Cardiff for the first time by the end of the year.
Notes to editors
1.

[Read More] […]

Read More…

Mr Creed was also convicted of dishonesty offences under the Insolvency Act 1986. The FCA found that Mr Creed lacks honesty and integrity in respect of his dealings with the Authority.
Mr Creed was approved to carry out FCA regulated functions at AAA Management Limited between January 2005 and December 2019. He was also the director of a company not regulated by the FCA, PEL, between January 2002 and April 2013. Between February and August 2012, Mr Creed dishonestly executed eight transfers which removed £166,000 from PEL’s accounts.
Mr Creed provided an undertaking which disqualified him from holding office as a company director in March 2016. In June 2016, he became aware he was the subject of a criminal investigation for executing fraudulent transactions. As an approved person Mr Creed was required to report the fact of his disqualification and the fact he was under criminal investigation to the FCA and failed to do so.
Although Mr Creed challenged the decision to prohibit, his appeal was ultimately withdrawn.

[Read More] […]

Read More…

The forgery charge relates to events that followed proceedings by the FCA against Mr Renwick Haddow for operating several unauthorised collective investment schemes, which culminated in a successful judgement against Mr Haddow and others in 2018. At the conclusion of these proceedings, Mr Haddow and others were ordered by the High Court to pay £16.9 million in restitution.
Amongst other assets, Mr Haddow had an interest in a property (13 Brook Mews, London W2 3BW) which should have been available to the FCA for part satisfaction of this restitution order. However, Mr Allen, forged a trust deed that hid Mr Haddow’s interest in 13 Brook Mews, knowing it would be used to avoid the property being sold for the benefit of victims of the unauthorised collective investment schemes. Through his guilty plea today, Mr Allen has admitted the forgery.
The property has now been sold and proceeds have recently been distributed to affected investors.
Notes to editors

The High Court ruled Mr Haddow was the beneficial owner of the property, which has now been sold and the proceeds distributed to investors. See the earlier related civil action taken by the FCA.
Renwick Haddow is in the USA awaiting sentence having pleaded guilty to a separate fraud prosecuted by the U.S. Department of Justice.

[Read More] […]

Read More…

This application is the latest in several legal proceedings commenced by the FCA against Mr Gopee arising out of his illegal money lending activities.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: ‘Unauthorised money-lending is a criminal offence and causes serious harm, often to vulnerable communities. Mr Gopee’s offending caused substantial harm to a large number of vulnerable consumers. The order obtained today will ensure Mr Gopee’s hold over properties owned by his victims is relinquished, by removing charges, notices and restrictions that he obtained in carrying out his illegal activities and which he continued to hold.’
Between 2012 and 2016, Mr Gopee acted as an illegal lender despite being refused a consumer credit license by the OFT, and without authorisation from the FCA after 1 April 2014. He loaned money to vulnerable consumers at high rates, securing the loans against their property.  He then sought to take possession of consumers’ homes if they failed to pay. Over the 4-year period, his own loan books showed that he issued approximately £1 million of new loans and took in at least £2 million in payments from old and new consumers, none of whom were aware that he did not have the required consumer credit license.
Whilst the FCA was investigating Mr Gopee’s misconduct, the FCA obtained a restraint order against him under the Proceeds of Crime Act 2002 in June 2015. The FCA then brought two sets of proceedings against Mr Gopee for contempt of court in relation to repeated breaches of that restraint order. In April 2016, having denied various breaches of the restraint order – including failing to disclose assets, continuing to deal with assets, opening and using new accounts – he was found to be in contempt and imprisoned for a term of 18 months. He was released early by the court in September 2016 having promised to comply with the order. However, he went on to commit various additional breaches. Further proceedings were brought against him, and on this second occasion, having admitted the new breaches, he was imprisoned for a term of 15 months in October 2017.
Following the FCA’s investigation, Mr Gopee was convicted and sentenced to three and half years’ imprisonment for offences under the Consumer Credit Act 1974 and the Financial Services & Markets Act, 2000. When sentencing Mr Gopee on 9 February 2018, trial judge HHJ Beddoe noted that Mr Gopee was aware of the FCA’s serious concerns, but ignored them, deciding instead to ‘…deliberately flout the law’ ignoring the fact that he had lost his consumer credit licence, and endeavoured to enforce agreements he knew were unenforceable but that debtors did not. He continued to pressurise debtors with demands for payment, threatening court action that he knew could not be sustained.
The FCA then secured a confiscation order against Mr Gopee in the sum of £5,118,018.72. The effect of the order was to require Mr Gopee to disgorge the value of his criminal proceeds as an illegal money lender. Mr Gopee was also ordered to pay almost £230,000 in compensation to consumers. He also continues to be subject to a Serious Crime Prevention Order, which imposes financial restrictions upon him for five years.
Today’s action benefits hundreds of Mr Gopee’s victims by removing entries registered against their properties by Mr Gopee’s illegal activities. 
The charges, notices and restrictions are registered in the names of the following companies, formerly under the control of Mr Gopee but now in liquidation: Barons Finance Ltd, Euro Business Finance PLC, Ghana Commercial Investments Ltd, Reddy Corporation Ltd, Barons Finance 1 Ltd, Ghana Commercial Finance Ltd, Barons Bridging Finance 1 Ltd, Pangold Estate Ltd, Moneylink Finance Ltd, Speedy Bridging Finance Ltd, Agni Estates Ltd and Pangold Investments Ltd.
Notes to editors
1.    The FCA’s press release in relation to the prosecution action dated 9 February 2018.2.    The FCA’s Press Release in relation to the confiscation order dated 11 December 2019.3.    The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this, it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.

[Read More] […]

Read More…

The FCA is consulting on moving some decision-making from its Regulatory Decisions Committee (RDC) to its Authorisations, Supervision and Enforcement Divisions. This will give greater responsibility for decisions to senior members of FCA staff close to the matters.
As part of the FCA’s transformation, the FCA is making changes to ensure that it will continue to be more innovative, assertive and adaptive. The changes proposed today will involve streamlining the FCA decision-making and governance so it can move more quickly to stop and prevent harm faster.
Emily Shepperd, Executive Director of Authorisations said:
‘The proposed changes will allow us to be more efficient by making best use of the breadth of expertise across the FCA and by putting certain decisions back to the subject matter experts. As a result of that there will be greater accountability in those areas. The changes will help to increase the speed and reduce the regulatory costs of dealing with firms and individuals that fail to meet the FCA standards.
‘As part of our transformation we will continue to take a fresh approach to tackle firms and individuals who do not meet the required standards. As part of this, we aim to become a forward looking, proactive regulator – one that is tough, assertive, confident, decisive and agile.’
The RDC is a committee of the FCA Board. At present it takes certain decisions on behalf of the FCA. The consultation is proposing that certain decisions will now be made by FCA staff including:  

imposing a requirement on a firm or varying its permissions by limiting or removing certain types of business 
making a final decision in relation to a firm’s application for authorisation or an individual’s approval that has been challenged 
making a final decision to cancel a firm’s permissions because a firm does not meet the FCA’s regulatory requirements
the decision to start civil and/or criminal proceedings 

The RDC will continue to make decisions in relation to contentious enforcement cases, where the FCA is proposing a disciplinary sanction or seeking to impose a prohibition order.
The consultation closes on 17 September 2021. Following this consultation, the FCA will consider the feedback and aims to publish a Policy Statement in or around November 2021.

[Read More] […]

Read More…

The FCA is consulting on changes to its Listing Rules to require listed companies to publish annually: 

A ‘comply or explain statement’ on whether they have achieved certain proposed targets (see notes to editors) for gender and ethnic minority representation on their boards, and 
As part of the same annual disclosure obligation, data on the make-up of their board and most senior level of executive management in terms of gender and ethnicity  

The FCA is also proposing changes to its disclosure and transparency rules to require companies to ensure any existing disclosure on diversity policies addresses key board committees (see notes to editors) and also considers broader aspects of diversity. This could include, for example, considerations of ethnicity, sexual orientation, disability, lower socio-economic background and other diversity characteristics. The FCA also encourages companies to provide further data on the result of their diversity policies considering these wider aspects where possible.
The Listing Rule diversity targets are not mandatory for companies to meet, so the FCA is not setting ‘quotas’, but providing a positive benchmark for issuers to report against. The proposals would apply to UK and overseas companies with equity shares in either the premium or standard listing segments of the FCA’s Official List, while the disclosure and transparency changes apply to companies with securities traded on UK regulated markets, such as the Main Market of the London Stock Exchange.
While some companies may already provide diversity disclosures to existing voluntarily UK initiatives and in annual reports, the FCA’s measures will help ensure reporting beyond the largest listed companies and ensure more consistency. Its approach also provides flexibility for overseas companies, since the ‘comply or explain’ approach allows any national or cultural context to be explained. 
Clare Cole, Director of Market Oversight at the FCA commented on the proposals:  
 ‘There is a current lack of standardised and mandatory transparency about diversity on listed company boards, particularly outside the FTSE 350 who do not provide data to the voluntary initiatives in this area. But interest from investors is growing and companies are increasingly focusing on this topic due to ESG investing, as well as wider social and public policy concerns.  
‘Our proposals are intended to increase transparency by establishing better, comparable information on the diversity of companies’ boards and executive committees. This will provide better data for companies and investors to assess progress in these areas and make investment decisions, reduce investor search costs, and inform shareholder engagement, enhancing market integrity.  
‘Over time, we expect enhanced transparency may strengthen incentives for companies towards greater diversity on their boards and encourage a more strategic approach to diversity in their pipeline of talent. This may have broader benefits in terms of the quality of corporate governance and company performance in due course.’  
The FCA’s proposals aim to build on progress achieved under existing initiatives to improve diversity on the boards of the largest UK companies. Such initiatives include the Hampton-Alexander Review and Parker Review, and similar initiatives in international markets.   
The changes also follow the FCA’s recent discussion paper published earlier in July, exploring how to promote diversity and inclusion across the financial services sector as a whole. Diversity will be an ongoing focus for the FCA, beyond the proposals it sets out here.  
The FCA is consulting for 12 weeks on these proposals, with a closing date of 22 October 2021. Subject to consultation feedback and FCA Board approval, it will seek to make relevant rules by late 2021. 
Notes to editors

The ‘comply or explain’ statement targets are as follows: 

At least 40% of the board should be women (including those self-identifying as women). 
At least one of the senior board positions (Chair, Chief Executive Officer (CEO), Chief Financial Officer (CFO) or Senior Independent Director (SID) should be a woman (including individuals that self-identify as a woman.  
At least one member of the board should be from a Non-White ethnic minority background (as defined by the Office for National Statistics).

‘Key board committees’ include those required under the UK Corporate Governance Code, specifically committees on audit, remuneration and nominations. 
The scope of the Listing Rule proposals includes UK and overseas companies with equity shares, or equity shares represented by certificates (including global depositary receipts), admitted to either the premium or standard listing segments of the FCA’s Official List in the UK or considering admission to such listings.

[Read More] […]

Read More…

The changes will provide more clarity to consumers about what the products are, the risk presented and information to help understand likely future performance.
The PRIIPs regulation was developed to renew the confidence of retail investors in the financial market and improve their protection. Those who produce, advise on or sell PRIIPs are required to provide a Key Information Document (KID) about the product they are selling.
However, for some products the KID has potential to contain misleading information as a result of the methodologies used in producing performance scenarios and summary risk indicators. There has also been a lack of clarity within the PRIIPs regime over the corporate bond market. This has led HM Treasury to confirm that the UK will diverge from EU PRIIPs regulation to better protect its consumers.
A key element in the FCA’s recent Consultation on the New Consumer Duty was to ensure that firms provide information which is understandable and helps consumers to make properly informed decisions. The FCAs proposed rule changes for PRIIPS will give firms great flexibility to ensure that their communications meet this test.
Sheldon Mills, Executive Director, Consumers and Competition said:
‘Exiting the EU has provided us an opportunity to quickly amend technical standards surrounding key information documents as we know that they are not fully achieving the intended aims. We want to ensure that consumers have what they need through transparent information and furthermore through the reduction of potentially misleading information being displayed.’
Following the UK’s exit from the EU, the Financial Services Act 2021 allows the FCA to specify whether a product can be classified as a PRIIP under the PRIIPs Regulation as well as allowing the FCA to define was is meant by ‘performance information’. The FCA has a range of options on how PRIIPs manufacturers can produce and present performance information most effectively in the KID in order to reduce the risk to consumers.
The FCA is consulting on the most serious concerns over PRIIPs and proposes to:

Clarify the scope of the PRIIPs regulation making it clearer that certain common features of these instruments do not make them into PRIIPS and guidance on the meaning of PRIIPs being ‘made available’ to retail investors
Amend the PRIIPs Regulatory Technical Standards to: require written explanation on performance in the KID; combat the potential for PRIIPs being assigned an inappropriately low summary risk indicator in the KID and; address concerns over applications of the slippage methodology when calculating transaction costs.

Subject to the outcome of this consultation, the FCA plans to amend the PRIIPs RTS by the end of 2021, with any changes made coming into effect on the 1st January 2022.

Notes to editors
1. The Consultation Paper (PDF).

[Read More] […]

Read More…

We want those saving for their retirement to ‘flip the context’ when approached with pension offers, by imagining the same offer in person, in an everyday, offline setting like a trip to the shops or an afternoon in the pub
Consumers are five times more likely to be interested in a free pension review offered online than in their local pub, despite this being a tell-tale sign of a scam
We have teamed up with top psychologist, Dr Linda Papadopoulos, to highlight the most common pension scam tactics by putting them in everyday settings

Flipping the context
Our new research shows pension holders were nine times more likely to accept advice from someone online than they would from a stranger met in person. They are five times as likely to be interested in a free pension review from a stranger online than someone in their local pub.
The way people make decisions is naturally affected by their environment and scammers take advantage of this. We are urging anyone saving for retirement to ‘flip the context’ and imagine what they would do if they received pension advice from a stranger while enjoying a quiet pint in their local, or out shopping with friends.
Whether these approaches are made online or at the bar, free pension reviews, time-limited offers and help to release cash from a pension are all signs of a scam. ‘Flipping the context’ by putting these signs in an everyday, offline setting makes pension scams easier to spot and avoid.
Last orders at the bar
The research revealed that half (50%) of pension holders would be unlikely to make an ‘impulse buy’, with many retailers using time pressure as a tactic to push consumers into making a purchase. However, more than a third of pension holders (36%) were unable to recognise time-limited offers as a sign of a scam. Scammers will often try to tempt pension holders with time-limited offers that are too good to be true to pressure them into making a rash decision about their pension.
Dutch courage
Despite more than two thirds of pension holders (68%) claiming they were confident they could spot the signs of a pensions scam, the research found that this confidence may be misplaced. When quizzed, only around a quarter of pension holders (28%) realised that a free pension review was a sign of a scam, and just 40% knew to be wary of opportunities to transfer your pension.
This is particularly concerning, as over-confidence can lead to pension holders letting their guard down and failing to check any firm they deal with is on the FCA Warning List – one of the best ways to make sure they avoid pension scams.
A total of £2,241,774 has been reportedly lost to pension scammers since the start of 2021 (January 2021-May 2021).  Some victims of pensions scams are reluctant to report that they have been scammed or do not realise they have been scammed until years later, so the total amount lost may be much higher.
The average loss this year was £50,949, according to complaints filed with Action Fraud. More than double last year’s average (£23,689). 
Scammers target pension pots big and small, with reported losses ranging from under £1,000 to as much as £500,000.
The research revealed that more than a quarter of pension holders (28%) felt more at risk of a pension scam now compared to before the coronavirus (Covid-19) pandemic. Of those who felt more at risk, nearly two thirds (65%) felt that scammer tactics had become more sophisticated and harder to spot during the pandemic. Tools like ‘flipping the context’ are becoming more important than ever for consumers to protect themselves against scammers.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: ‘Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying yes to that.
‘It’s no different online. Whether you’re on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life. Stop and think how you would react.
‘Fraudsters will seek out every opportunity to exploit innocent people, no matter how much they have saved.
‘Check the status of a firm before making a financial decision about your pension by visiting the FCA register. Make sure you only get advice from a firm authorised by the FCA to provide advice, before making any changes to your pension arrangements.’
Dr Linda Papadopoulos, psychologist who is supporting the ScamSmart campaign said: ‘Scammers will use behavioural tactics to trick you into a false sense of security. Often these criminals will manipulate and persuade you to do things in the moment, which ordinarily you would feel suspicious of in a more familiar setting, such as a shop or local pub.
‘It is important when approached with a financial offer on your pension, to take yourself out of the context or pressure of that moment. We know that people wouldn’t accept a free financial product in a pub or would be unlikely to make a purchase in a random flash sale – so why risk it with your pension?’
Five common warning signs of a pension scam, according to the FCA, include: 

Being offered a free pension review out of the blue
Being offered guaranteed higher returns – claiming they can get you better returns on your pension savings
Offered to help to release cash from your pension, even though you’re under 55
High-pressure sales tactics – scammers may try to pressure you with ‘time-limited offers,’ or even send a courier to your door to wait while you sign documents
Unusual investments which tend to be unregulated and high risk

Pension savers can test how smart they are by taking a quiz. Click here for more on how to avoid pension scams.
Notes to editors

Since the beginning of 2021, pension scam losses totalling £2,241,774 have been reported to Action Fraud. The true number of victims is likely to be higher as scams often go unreported and those affected may not realise they have been scammed for several years. Action Fraud reporting is a self-reporting tool; information provided within Action Fraud reports may not have been verified and may be subject to discrepancies.
All figures, unless otherwise stated, are from Censuswide, with 2000 Respondents aged 45-65 between 07.05.2021-12.05.2021. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
The latest ScamSmart pension scams advertising campaign launched on 1 July. The advertising includes TV, radio, online video, and paid search.
The ScamSmart website gives consumers tips on how to spot the techniques used by fraudsters and hosts the FCA Warning List. The Warning List is a list of firms and individuals that the FCA knows are operating without its authorisation.
A ban on pension cold calling came into force in 2019. Firms that break the rules could face penalties of up to half a million pounds.
The FCA has an objective of ensuring protection for consumers. Find out more information about the FCA.

[Read More] […]

Read More…

We want those saving for their retirement to ‘flip the context’ when approached with pension offers, by imagining the same offer in person, in an everyday, offline setting like a trip to the shops or an afternoon in the pub
Consumers are five times more likely to be interested in a free pension review offered online than in their local pub, despite this being a tell-tale sign of a scam
We have teamed up with top psychologist, Dr Linda Papadopoulos, to highlight the most common pension scam tactics by putting them in everyday settings

Flipping the context
Our new research shows pension holders were nine times more likely to accept advice from someone online than they would from a stranger met in person. They are five times as likely to be interested in a free pension review from a stranger online than someone in their local pub.
The way people make decisions is naturally affected by their environment and scammers take advantage of this. We are urging anyone saving for retirement to ‘flip the context’ and imagine what they would do if they received pension advice from a stranger while enjoying a quiet pint in their local, or out shopping with friends.
Whether these approaches are made online or at the bar, free pension reviews, time-limited offers and help to release cash from a pension are all signs of a scam. ‘Flipping the context’ by putting these signs in an everyday, offline setting makes pension scams easier to spot and avoid.
Last orders at the bar
The research revealed that half (50%) of pension holders would be unlikely to make an ‘impulse buy’, with many retailers using time pressure as a tactic to push consumers into making a purchase. However, more than a third of pension holders (36%) were unable to recognise time-limited offers as a sign of a scam. Scammers will often try to tempt pension holders with time-limited offers that are too good to be true to pressure them into making a rash decision about their pension.
Dutch courage
Despite more than two thirds of pension holders (68%) claiming they were confident they could spot the signs of a pensions scam, the research found that this confidence may be misplaced. When quizzed, only around a quarter of pension holders (28%) realised that a free pension review was a sign of a scam, and just 40% knew to be wary of opportunities to transfer your pension.
This is particularly concerning, as over-confidence can lead to pension holders letting their guard down and failing to check any firm they deal with is on the FCA Warning List – one of the best ways to make sure they avoid pension scams.
A total of £2,241,774 has been reportedly lost to pension scammers since the start of 2021 (January 2021-May 2021).  Some victims of pensions scams are reluctant to report that they have been scammed or do not realise they have been scammed until years later, so the total amount lost may be much higher.
The average loss this year was £50,949, according to complaints filed with Action Fraud. More than double last year’s average (£23,689). 
Scammers target pension pots big and small, with reported losses ranging from under £1,000 to as much as £500,000.
The research revealed that more than a quarter of pension holders (28%) felt more at risk of a pension scam now compared to before the coronavirus (Covid-19) pandemic. Of those who felt more at risk, nearly two thirds (65%) felt that scammer tactics had become more sophisticated and harder to spot during the pandemic. Tools like ‘flipping the context’ are becoming more important than ever for consumers to protect themselves against scammers.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: ‘Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying yes to that.
‘It’s no different online. Whether you’re on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life. Stop and think how you would react.
‘Fraudsters will seek out every opportunity to exploit innocent people, no matter how much they have saved.
‘Check the status of a firm before making a financial decision about your pension by visiting the FCA register. Make sure you only get advice from a firm authorised by the FCA to provide advice, before making any changes to your pension arrangements.’
Dr Linda Papadopoulos, psychologist who is supporting the ScamSmart campaign said: ‘Scammers will use behavioural tactics to trick you into a false sense of security. Often these criminals will manipulate and persuade you to do things in the moment, which ordinarily you would feel suspicious of in a more familiar setting, such as a shop or local pub.
‘It is important when approached with a financial offer on your pension, to take yourself out of the context or pressure of that moment. We know that people wouldn’t accept a free financial product in a pub or would be unlikely to make a purchase in a random flash sale – so why risk it with your pension?’
Five common warning signs of a pension scam, according to the FCA, include: 

Being offered a free pension review out of the blue
Being offered guaranteed higher returns – claiming they can get you better returns on your pension savings
Offered to help to release cash from your pension, even though you’re under 55
High-pressure sales tactics – scammers may try to pressure you with ‘time-limited offers,’ or even send a courier to your door to wait while you sign documents
Unusual investments which tend to be unregulated and high risk

Pension savers can test how smart they are by taking a quiz. Click here for more on how to avoid pension scams.
Notes to editors

Since the beginning of 2021, pension scam losses totalling £2,241,774 have been reported to Action Fraud. The true number of victims is likely to be higher as scams often go unreported and those affected may not realise they have been scammed for several years. Action Fraud reporting is a self-reporting tool; information provided within Action Fraud reports may not have been verified and may be subject to discrepancies.
All figures, unless otherwise stated, are from Censuswide, with 2000 Respondents aged 45-65 between 07.05.2021-12.05.2021. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
The latest ScamSmart pension scams advertising campaign launched on 1 July. The advertising includes TV, radio, online video, and paid search.
The ScamSmart website gives consumers tips on how to spot the techniques used by fraudsters and hosts the FCA Warning List. The Warning List is a list of firms and individuals that the FCA knows are operating without its authorisation.
A ban on pension cold calling came into force in 2019. Firms that break the rules could face penalties of up to half a million pounds.
The FCA has an objective of ensuring protection for consumers. Find out more information about the FCA.

[Read More] […]

Read More…

The proposals follow the introduction of climate-related disclosure rules for the most prominent listed commercial companies in December 2020 which are aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).
In the consultations the FCA is proposing: 

Sheldon Mills, Executive Director of Consumer and Competition at the FCA said: ‘The climate change challenge affects the whole of society. It is vital that the financial services sector plays a leading role in addressing this challenge. Managing the risks of climate change and transitioning to a cleaner and less carbon-intensive economy will require high quality information on how climate-related risks and opportunities are being managed throughout the investment chain. 
‘However, climate-related disclosures do not yet meet investors’ and market participants’ needs. The new rules will help markets, investors and ultimately consumers better understand the impact of climate change and make more informed decisions.’  
The new proposals are among the FCA’s first substantive policy proposals for the UK asset management and asset owner sectors since the end of the EU Withdrawal transition period. Given the global reach of regulated firms operating in the UK, the FCA has approached the design of the regime with international consistency in mind and to accommodate firms’ different business models. 
The proposed rules are designed to help make sure that the right information on climate-related risks and opportunities is available along the investment chain – from companies in the real economy, to financial services firms, to clients and consumers. 
This should help encourage investment in more sustainable projects and activities, consistent with the Chancellor’s expectations in the FCA’s recent remit letter that the FCA should ‘have regard’ to the Government’s commitment to achieve a net-zero economy by 2050. 
Alongside these proposals, the FCA is also seeking views on other topical environmental, social and governance (ESG) issues in capital markets, including on green and sustainable debt markets and the increasingly prominent role of ESG data and rating providers. 
The FCA is inviting feedback to both consultations by 10 September 2021 and intends to confirm its final policy on climate-related disclosures before the end of 2021. The FCA will separately consider stakeholder views on the ESG-related discussion topics in capital markets, with a view to publishing a Feedback Statement in the first half of 2022.
Notes to editors

Consultation Paper: Proposals to enhance climate-related disclosures by asset managers, life insurers and FCA-regulated pension providers.
Consultation Paper: Proposals to enhance climate-related disclosures by standard listed companies and seeking feedback on ESG topics in capital markets.
December 2020 Policy Statement: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations.
The TCFD’s recommendations, published in 2017, constitute a framework for companies to disclose how climate-related risks and opportunities could impact their businesses. The recommendations are supported by a set of 11 recommended disclosures, in the areas of governance, strategy, risk management and metrics and targets. 
The Government aims to deliver a financial system which supports and enables a net-zero economy by mobilising private finance towards sustainable and resilient growth and is resilient to the physical and transition risks that climate change presents. The FCA should have regard to the government’s commitment to achieve a net-zero economy by 2050 under the Climate Change Act 2008 (Order 2019) when considering how to advance its objectives and discharge its functions.
The Government published a Roadmap in November 2020 setting out a path towards mandatory TCFD-aligned disclosures across the economy by 2025. The proposed measures are consistent with the Government’s Roadmap. 
Climate change and sustainable finance web page.
The FCA has an overarching strategic objective of ensuring that relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
Find out more information about the FCA.

[Read More] […]

Read More…

This is the first FCA case in relation to cum/ex trading, dividend arbitrage and withholding tax (WHT) reclaim schemes. There are currently a number of ongoing and overlapping investigations.
Between 10 February 2015 and 10 November 2015 Sapien failed to have in place adequate systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to business introduced by the Solo Group.
The Solo trading was characterised by what appeared to be a circular pattern of extremely high value trades undertaken to avoid the normal need for payments and delivery of securities in the settlement process. The trading pattern involved the use of Over the Counter (OTC) equity trading, securities lending and forward transactions, involving EU equities, on or around the last day securities were cum dividend.
The FCA investigation found no evidence of change of ownership of the shares traded by the Solo clients, or custody of the shares and settlement of the trades by the Solo Group.
The way these trades were conducted by the Solo Group and their clients, in combination with their scale and volume, were highly suggestive of financial crime, and appear to have been undertaken to create an audit trail to support withholding tax reclaims in Denmark and Belgium.
Sapien executed purported OTC equity trades to the value of approximately £2.5 billion in Danish equities and £3.8 billion in Belgian equities.
In addition, Sapien failed to exercise due skill, care and diligence in applying anti-money laundering policies and procedures and in failing properly to assess, monitor and mitigate the risk of financial crime in relation to clients introduced by the Solo Group and the purported trading.
Sapien did not undertake appropriate due diligence and failed to perform effective risk assessments on the Solo clients.
Mark Steward, Director of Enforcement and Market Oversight, stated: ‘These transactions ran money laundering and other financial crime risks which Sapien incompetently failed to see.
‘The FCA expects firms have systems and controls that test the purpose and legitimacy of transactions, reflecting scepticism and alertness to the risk of money laundering and financial crime, and failures here constitute serious misconduct.’
As Sapien agreed to resolve all issues of fact and liability and entered a Focused Resolution Agreement, under the Authority’s executive settlement procedures, it qualified for a 30% discount. The amount was further reduced from £219,100 to reflect Sapien’s serious financial hardship.
The publication of this Final Notice is part of a range of measures taken in connection with cum/ex dividend arbitrage cases, and WHT schemes. This has involved the proactive engagement with EU regulators and global law enforcement.
The FCA’s investigation into the involvement of UK based brokers in cum/ex dividend arbitrage schemes is continuing.
Notes to editors:

Final Notice: Sapien Capital Limited 
Cum-ex trading involves trading of shares on or just before the last cum-dividend date. If in a suitable jurisdiction this can then allow a party to claim a tax rebate on withholding tax, sometimes without entitlement. 
The intention of dividend arbitrage is to place shares in alternative tax jurisdictions around dividend dates, with the aim of minimising withholding tax or generating withholding tax reclaims. This may involve several different trading activities including trading and lending securities and trading derivatives, including futures and total return swaps, designed to hedge movements in the price of the securities over the dividend dates.
Withholding tax is a levy deducted at source from income and passed to the government by the entity paying it. Many securities pay periodic income in the form of dividends or interest, and local tax regulations often impose a withholding tax on such income. In certain cases where WHT is levied on payments to a foreign entity it may be reclaimed if there is a formal treaty, called a double taxation agreement (DTA), between the country in which the income is paid and the country of residence of the recipient. DTAs allow for a reduction or rebate of the applicable WHT.
The FCA publication of Market Watch 52 highlighted various issues and concerns around dividend arbitrage in 2017. FCA contributed to the European Securities and Markets Authority (ESMA) Final Report on Cum/Ex, Cum/Cum and WHT in 2020.
Principle 2 of the FCA Principles for Business states that “A firm must conduct its business with due skill, care and diligence.”
Principle 3 states that “a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”
The FCA’s enforcement information guide.

[Read More] […]

Read More…