The FCA has, through its continued engagement with Amigo and participation in the Court hearing, sought to get a better, fairer deal for Amigo’s customers due redress. We believe that a fairer compromise could have been offered to customers, but was not.
The FCA considered it necessary in this case to share with the Court its view that the Scheme as proposed was inherently unfair, as it placed a disproportionate burden on customers, as opposed to shareholders and bondholders, to keep the company afloat.
The FCA believes that Amigo can propose a fairer Scheme to customers. It should also ensure that its customers are fairly represented and advised on alternative proposals for a scheme.
FCA regulated firms must maintain adequate financial resources which includes taking account of the need to pay redress liabilities. We have significant concerns about Schemes of Arrangement being used by firms to unfairly avoid paying customers redress.
Firms should be regularly assessing the adequacy of their financial resources and report to us immediately if they assess they are or will be in financial difficulty. To understand our expectations for their assessments, firms should refer to the FCA Finalised Guidance on assessing adequate financial resources.
This is an important judgment and any firm considering a scheme of arrangement should take it into consideration.
We provide answers to questions consumers may have:
I have complained to Amigo, what do I have to do now?
Amigo is assessing its next steps, for further information please contact Amigo. 
As the court has not sanctioned the Scheme will I still be able to claim compensation?
If you believe that you are entitled to compensation, you should submit a complaint to Amigo.  
Can I still make a complaint to the Financial Ombudsman Service (FOS) about the firm?
You are still able to complain to the FOS, should you think you have a valid claim and Amigo hasn’t dealt with your complaint fairly.  
I already have a claim with the FOS, what do I do now? Will I still receive compensation?
If you are due compensation following a complaint to the FOS, then for further information please contact Amigo.
The firm has said they may go into insolvency following the outcome of the hearing. Will I still receive the compensation they owe me?
Should the firm enter an insolvency process, your claim will be assessed in line with insolvency law.
Why did the FCA oppose this Scheme?
The FCA has significant concerns about schemes of arrangement being used by firms to avoid paying customers their full redress.
Our goal throughout our discussions with Amigo has been to try to improve the fairness of the proposed Scheme for consumers. 
We believe that a fair compromise can still be proposed to customers. Under the proposed Scheme, redress creditors would have had their claims significantly reduced and rights restricted, whilst shareholders and bondholders were not contributing what the FCA considers to be their fair share to enable the firm to remain solvent.
What to do if you’re in financial difficulty
Anyone who is struggling financially can get free and impartial advice from the Money Advice Service.

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This further 6-month extension is to ensure minimal disruption to merchants and consumers, and recognises ongoing challenges facing the industry to be ready by the previous 14 September 2021 deadline. The new 14 March 2022 deadline is the latest we expect full SCA compliance for e-commerce transactions.
We previously agreed to give firms extra time to implement SCA for card-based e-commerce transactions in response to concerns about industry readiness, and to limit the impact on consumers and merchants. We also provided an additional 6-month extension in response to the coronavirus crisis.
We welcome the implementation of SCA solutions which protect consumers while minimising the potential for disruption to customers and merchants.
We still expect firms to continue to take robust action to reduce the risk of fraud.
More information on Strong Customer Authentication.

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Cash must remain available
Cash use is declining but remains an important way many people and businesses buy and sell their day-to-day goods. The Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) are committed to ensuring that cash, and the infrastructure that supports it, remains available for those who need it.
This includes new and innovative ways for accessing cash, such as banking hubs that are being piloted, alongside more traditional routes of bank branches, ATMs, cashback from retailers and cash services over Post Office counters.
What the FCA and PSR have done about cash
During the pandemic, the FCA and PSR worked with industry to address the challenges of ensuring cash access for the people who want to use it. This included analysing data, sharing best practice, and agreeing actions to ensure continued access to cash. As a result, even at the height of the crisis no more than 0.1% of the UK population lost access to a source of cash within 3 miles.
The FCA and PSR partnered with the University of Bristol last year to produce a comprehensive assessment of cash access across the UK. We found that 95% of people are able to access cash in urban areas within 650 metres and in rural areas within 3.5km. Bank branches, ATMs and Post Offices all form part of this important infrastructure.
Under the Post Office national access criteria, 99% of the population must live in areas within 3 miles of their nearest Post Office, and 90% within 1 mile. In addition, the PSR’s oversight of LINK ensures that LINK continues to maintain a broad geographic footprint of free-to-use ATMs.
In September 2020, the FCA published guidance setting out expectation that firms should consider the impact of branch and ATM closures on their customers’ everyday banking needs and consider the availability and provision of alternatives. We have been supervising branch closures closely, assessing plans based on risk of harm posed to consumers.
In January 2021, we asked banks to pause closures where they are unable to meet the expectations laid out in the guidance due to the coronavirus lockdown.
Legislation to protect cash
Last year, the government announced its intention to legislate to maintain access to cash in the long-term. That legislation will support infrastructure into the future and provide a framework to protect access to cash.
Our expectations of firms
We expect individual firms to play their part in protecting the ability of customers to access cash and wider banking services in ways that meet their needs, particularly vulnerable customers and SMEs.
Individual firms are responsible for making sure that when they close a branch or ATM in a local area, there are alternatives available to provide services at a standard of service that meets the needs of the customers using that branch or ATM. Firms will need to consider the ability to withdraw and deposit cash, safety, accessibility and opening times.
To meet these responsibilities, over the short-term firms are likely to rely on the current alternatives to branches to a large extent, such as Post Office and LINK services. We think there can be significant benefits from making the most of, and where necessary enhancing the existing services and policies. Over the longer-term there will also be scope for firms to use other alternatives and innovations.
Industry activity and regulatory expectations
We welcome the commitment from industry to take forward action to protect access to cash and close gaps in provision in a way that complies with competition law. This work should also take account of regulatory and legislative developments and does not replace the individual responsibilities of firms.
We also welcome the wider financial services industry actions to identify new ways to support local community access. Innovative new methods are already being piloted across the country and we are keen to see the outcomes of this work and how these solutions can be applied more widely. 
The FCA and PSR will continue to work in an open and transparent way with consumer bodies and the firms we regulate to achieve our desired outcomes, including using the full range of regulatory tools available to us where appropriate.
Following on from our work with the University of Bristol last year, we intend to publish an updated assessment of the UK’s cash infrastructure in the summer, alongside the FCA’s recent consumer research into cash use. Furthermore, the PSR will shortly publish its review of Specific Direction 8 (SD8).

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Cash must remain available
Cash use is declining but remains an important way many people and businesses buy and sell their day-to-day goods. The Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) are committed to ensuring that cash, and the infrastructure that supports it, remains available for those who need it.
This includes new and innovative ways for accessing cash, such as banking hubs that are being piloted, alongside more traditional routes of bank branches, ATMs, cashback from retailers and cash services over Post Office counters.
What the FCA and PSR have done about cash
During the pandemic, the FCA and PSR worked with industry to address the challenges of ensuring cash access for the people who want to use it. This included analysing data, sharing best practice, and agreeing actions to ensure continued access to cash. As a result, even at the height of the crisis no more than 0.1% of the UK population lost access to a source of cash within 3 miles.
The FCA and PSR partnered with the University of Bristol last year to produce a comprehensive assessment of cash access across the UK. We found that 95% of people are able to access cash in urban areas within 650 metres and in rural areas within 3.5km. Bank branches, ATMs and Post Offices all form part of this important infrastructure.
Under the Post Office national access criteria, 99% of the population must live in areas within 3 miles of their nearest Post Office, and 90% within 1 mile. In addition, the PSR’s oversight of LINK ensures that LINK continues to maintain a broad geographic footprint of free-to-use ATMs.
In September 2020, the FCA published guidance setting out expectation that firms should consider the impact of branch and ATM closures on their customers’ everyday banking needs and consider the availability and provision of alternatives. We have been supervising branch closures closely, assessing plans based on risk of harm posed to consumers.
In January 2021, we asked banks to pause closures where they are unable to meet the expectations laid out in the guidance due to the coronavirus lockdown.
Legislation to protect cash
Last year, the government announced its intention to legislate to maintain access to cash in the long-term. That legislation will support infrastructure into the future and provide a framework to protect access to cash.
Our expectations of firms
We expect individual firms to play their part in protecting the ability of customers to access cash and wider banking services in ways that meet their needs, particularly vulnerable customers and SMEs.
Individual firms are responsible for making sure that when they close a branch or ATM in a local area, there are alternatives available to provide services at a standard of service that meets the needs of the customers using that branch or ATM. Firms will need to consider the ability to withdraw and deposit cash, safety, accessibility and opening times.
To meet these responsibilities, over the short-term firms are likely to rely on the current alternatives to branches to a large extent, such as Post Office and LINK services. We think there can be significant benefits from making the most of, and where necessary enhancing the existing services and policies. Over the longer-term there will also be scope for firms to use other alternatives and innovations.
Industry activity and regulatory expectations
We welcome the commitment from industry to take forward action to protect access to cash and close gaps in provision in a way that complies with competition law. This work should also take account of regulatory and legislative developments and does not replace the individual responsibilities of firms.
We also welcome the wider financial services industry actions to identify new ways to support local community access. Innovative new methods are already being piloted across the country and we are keen to see the outcomes of this work and how these solutions can be applied more widely. 
The FCA and PSR will continue to work in an open and transparent way with consumer bodies and the firms we regulate to achieve our desired outcomes, including using the full range of regulatory tools available to us where appropriate.
Following on from our work with the University of Bristol last year, we intend to publish an updated assessment of the UK’s cash infrastructure in the summer, alongside the FCA’s recent consumer research into cash use. Furthermore, the PSR will shortly publish its review of Specific Direction 8 (SD8).

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The FCA attended the court hearing to outline a number of concerns it has with the Scheme, which were also provided to the firm in a letter prior to the court hearing.
The FCA’s key concern is that consumers are offered significantly less than the full amount of compensation they are owed.
The alternative to a scheme is insolvency of the firm where consumers are likely to receive no compensation. We want customers who are eligible to vote on the Scheme to be able to decide whether to support it or not, so in the interests of transparency and giving all scheme creditors and wider stakeholders an opportunity to better understand the FCA’s position on the Scheme, we have today published our letter of concerns.

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In December we published the report of Raj Parker’s ‘Independent Review into the FSA and FCA’s handling of the Connaught Income Fund Series 1 and connected companies’, and our response to that review. In our response we said that we were sorry for the errors we made in this case and that we accepted and will implement all the Review’s lessons. We are making good progress in implementing those lessons.
The majority of complaints received from investors by the FCA concerning the FCA and FSA’s actions in its handling of the collapse of the Fund were investigated, determined with decision letters and closed in 2017. At that time complainants were informed of their right, if they were dissatisfied with our decision, to refer their complaint to the Office of the Complaints Commissioner. In regard to these complaints received by the FCA, we committed to reconsidering the issue of remedies once the Independent Review was published. We have now reconsidered these complaints taking account of our approach to remedies, the relevant factors in the Complaints Scheme and the statutory framework within which we operate. We consider that an apology is the most appropriate remedy in the circumstances.
We will be contacting these complainants directly to provide our apology.

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The report highlights how the UK closely follows the FSB Principles and Standards (P&S) for Sound Compensation Practices, as well as the effectiveness of how the FCA works and shares information with the PRA.
The UK is the first FSB member to be assessed by peers on the effectiveness of its remuneration reforms in the financial sector since the financial crisis and its consistency with the P&S.
This report is a positive assessment of the FCA and its role in the promotion of international standards, our commitment to the Senior Managers & Certification Regime and high standards of conduct and culture.

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We are reminding firms about changes certain consumer credit firms will have to make to pre-contract consumer credit information forms.
These changes will need to be made from 1 June 2021. If they are not made, the credit agreement may only be enforceable against the debtor on an order of the court under the Consumer Credit Act 1974.

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Amigo Loans’ application to implement a scheme of arrangement (the ‘Scheme’) was heard at the High Court yesterday. Prior to the court hearing, we made Amigo Loans aware that the FCA did not support the Scheme and set out our concerns with the Scheme in a letter. The letter of concerns provided by the FCA to Amigo Loans was referred to during the court proceedings.
In the interests of transparency and giving all scheme creditors and wider stakeholders an opportunity to better understand the FCA’s position, we have today published our letter of concerns.

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We confirm that we will be consulting shortly on amendments to our Listing Rules and related guidance to strengthen protections for investors in Special Purpose Acquisition Companies (SPACs). The consultation will consider the structural features and enhanced disclosure, including a minimum market capitalisation and a redemption option for investors, required to provide appropriate investor protection. Our proposals will help to ensure that SPACs operate within a framework of high regulatory standards and oversight. Where such protections are in place, we consider that the existing presumption of suspension of the listing for such companies at the point of announcement of an acquisition target is no longer required and we therefore intend to consult on this basis, aligning this element of our rules more closely with other major jurisdictions.
We intend for the consultation to be open for a 4-week period and will welcome views from the full range of stakeholders. Subject to that process, we would aim to make the new rules and/or guidance by early summer.

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A key milestone recommended by the Working Group on Sterling Risk-Free Reference Rates (the Working Group) is to cease initiation of new GBP LIBOR-linked non-linear derivatives expiring after 2021 by end-Q2 2021, other than for risk management of existing positions.
To support market participants in meeting this milestone as soon as possible, the Working Group’s Path to ending new use of GBP LIBOR linked derivatives suggested exploring the potential to change standard trading conventions in non-linear derivatives to a SONIA basis during Q2 2021. The FCA has therefore engaged with participants in the non-linear derivatives market, including liquidity providers, buy-side firms and interdealer brokers (IDBs) to determine support for, and the feasibility of, this approach.
An FCA survey of these market participants identified strong support for a change in the interdealer quoting convention, which would see SONIA rather than LIBOR become the default price from 11 May 2021.
The FCA and the Bank of England support and encourage all participants in the sterling non-linear derivatives market to take the steps necessary to prepare for and implement these changes to market conventions on 11 May and shift liquidity away from GBP LIBOR to SONIA. In the period leading up to 11 May, the FCA and the Bank of England will engage with market participants to determine whether market conditions allow the switch to proceed smoothly.
Background & technical notes
This is an extension of the successful similar change to the interdealer quoting convention for linear sterling swaps during Q4 2020, which has supported a substantial move in trading volumes from GBP LIBOR to SONIA over subsequent months. Extending this to non-linear derivatives is intended to increase alignment in sterling markets and help to accelerate a reduction in new LIBOR exposures.
SONIA derivatives are likely to be the appropriate market convention for most contracts, particularly those maturing after 2021. The number of cases where market participants prefer LIBOR contracts is expected to reduce significantly as the end of 2021 approaches. Where new LIBOR transactions are entered into, market participants should be aware of the risks and take appropriate steps to establish that their clients are too.
The proposed change will involve IDBs moving the primary basis of their pricing screens and volatility surface construction for sterling non-linear derivatives from GBP LIBOR to SONIA. As a result, SONIA would be the primary pricing point for swaptions, caps and floors and other non-linear products.
These changes would not prohibit trading in GBP LIBOR non-linear derivatives but would mean the primary source of pricing and liquidity will switch from GBP LIBOR to SONIA. This, in turn, should encourage a greater proportion of GBP non-linear derivative trading volumes to switch to SONIA.
FCA survey results
Total respondents: 22
Q1. Do you support a ‘SONIA-First’ Convention Switch for the non-linear derivatives market? Yes / No.
100% of respondents selected ‘Yes’ to this question.
Q2. If you answered Q1 with Yes: Do you think a switch on 11 May 2021 would be an appropriate date for the interdealer non-linear derivatives market?
95% of respondents who selected ‘Yes’ to the first question supported the 11 May date.

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The survey was conducted to inform the ongoing joint review by the Bank and the FCA on open-ended funds liquidity mismatch.
We collected data on funds’ approaches to liquidity management, which also covered the period of market stress last year.
The Financial Policy Committee have welcomed the findings in today’s Financial Policy Summary and Record.
The survey report can be found in full here.

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On 31 December 2020, we published a statement on our use of the Temporary Transitional Power (TTP) to modify the application of the derivatives trading obligation (DTO).  
In that statement we said that we would keep our use of the TTP under review and consider by 31 March 2021 whether market or regulatory developments warrant a review of our approach.  
We have not observed market or regulatory developments in the first quarter of 2021 that justify a change in our approach. Therefore, we will continue to use the TTP to modify the application of the DTO as previously set out.  
As highlighted previously, our approach is driven by our objectives, and aims to support the ability of firms based in the UK to continue to do a range of international business and serve their global clients, while upholding our G20 commitment in respect of the trading of OTC derivatives.
We will continue to monitor market and regulatory developments and review our approach if necessary. If we do see a case for a change, we will provide sufficient notice to market participants so that any changes can be implemented smoothly. 
As specified in our December statement, we expect firms and other regulated persons to be able to demonstrate compliance with the UK DTO.

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We received over 100 responses to the consultation, which closed on 25 January 2021. Many respondents commented on the proposed implementation period, with almost all firms saying that it would not be possible for them to meet this timetable.
Firms told us that the package of remedies on which we consulted would require significant operational and business-wide changes. These include developing and testing new pricing models and re-coding IT systems. These changes cannot be delivered in a short period, while firms are working under significant pressure dealing with the impacts of the coronavirus pandemic.
We have not yet reached a final decision on the details of any rules we might introduce, but we are making this announcement now so firms can plan their change programmes effectively.
We will publish the policy statement, and any rules we make, at the end of May. The implementation period will start from this point.
If any rules are made, we propose to give firms an implementation period of until:
the end of September 2021 for the systems and controls (SYSC) rules and product governance rules (in Annexes B and D of the draft Instrument on which we consulted) and
the end of 2021 for the pricing and auto-renewal remedies and the reporting requirements (in Annexes C and E of the draft Instrument)
We expect firms to implement any rules that we introduce on or before the proposed deadlines. We will check they are on track and are moving promptly to implement any final rules. To that end, we will closely monitor how firms implement their change programmes and will be checking their progress regularly.
We do not want to see consumer harm continue into 2022 and have a range of tools and powers available to us. We will consider taking action against firms where there is evidence that they have not taken sufficient steps to implement the rules by the implementation date, including action to ensure they take appropriate steps to repair any harm that arises, especially financial loss to consumers.  
The pricing rules would apply to renewal notices sent after the rules take effect (rather than to policies renewing after the rules take effect). As renewal notices are sent some time before policies renew, this means firms have the full implementation period to make the necessary changes to their business models.

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RTS 27 reports 
The next set of RTS 27 reports on execution quality will be based on pre-Brexit data. As a result, the information in them is likely to be of limited use for market participants and may even be misleading.
There is also a particular challenge arising from the EU’s two-year suspension of RTS 27 reports for firms in the Temporary Permissions Regime who, benefitting from substituted compliance, would normally discharge their obligation in the UK by producing reports for the firm as a whole.
We are currently preparing a consultation looking at the RTS 27 reporting obligation, with a view to abolishing it, given concerns that have been expressed around the value these reports bring to the market and to consumers, and the burdens involved in producing them.
Considering the upcoming consultation, we will not take action against firms who do not produce RTS 27 reports for the rest of 2021. We expect that by end of 2021 we will have concluded our policy consideration of the future of these reports. 
10% depreciation notifications 
For the last twelve months we have adopted temporary coronavirus (Covid-19) measures on the requirement for firms to issue 10% depreciation notifications to investors (COBS 16A.4.3 UK).
These measures were put in place to help firms support consumers during periods of actual/potential market volatility linked to the spread of Covid-19 and the Brexit transitional period. We said we would show supervisory flexibility on firms’ ongoing compliance with the requirement so long as certain criteria were met.
This period of flexibility has given us the opportunity to consider the effectiveness of the 10% depreciation notification requirement.
We intend to consult on changes to the requirement later this Spring. We are therefore extending the temporary measures for firms until the end of 2021 while we undertake policy work on the future of the requirement.
During this period, we won’t take action for breach of COBS 16A.4.3 UK for services offered to retail investors provided that the firm has: 
issued at least one notification in the current reporting period, indicating to retail clients that their portfolio or position has decreased in value by at least 10% 
informed these clients that they may not receive similar notifications should their portfolio or position values further decrease by 10% in the current reporting period 
referred these clients to non-personalised communications, perhaps made available on public channels, that outline general updates on market conditions (these could contextualise potential drops in portfolio or position value to help consumers meet their objectives, rather than making impulse decisions about their investments) and 
reminded clients how to check their portfolio value, and how to get in touch with the firm 
Firms must still pay due regards to the interests of their customers and treat them fairly (Principle 6), and pay due regard to the information needs of their clients, and communicate information to them in a way which is clear, fair and not misleading (Principle 7). 
If we have concerns that potential serious misconduct may cause (or has caused) significant harm to consumers, then we will consider the appropriate response, which may include opening an investigation. 
For services offered to professional investors, we will not take action for breach of COBS 16A.4.3 UK provided that firms have allowed professional clients to opt-in to receiving notifications.

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