The FCA has found that while life insurers provide good service to bereaved customers, they need to settle claims quicker and improve how they measure customer experience. The multi-firm review found evidence of good practice, such as firms providing additional support for claimants throughout what is a difficult time for them. The FCA also recognises firms can face challenges in providing a timely service, such as obtaining the evidence needed to assess a claim.However, the FCA has found that many firms still have further to go to meet its expectations, particularly in the measurement, monitoring, and delivery of good service outcomes for customers.The FCA found that firms took, on average, between 53 and 122 days to process a claim, from start to finish, for a term insurance policy, within 36 days for group life cover, 20 days for over 50 plans, and 53 days for whole of life. However, measurement is inconsistent as few firms captured these figures.The FCA will be engaging with industry to collectively improve customer outcomes and address the findings. The regulator will do further work to understand what changes have been made and will take action if it doesn't see improvements.Matt Brewis, director of insurance at the FCA, said:'The loss of a loved one can be intensely stressful and we expect firms to offer the right support to help their customers during this difficult time.'We expect all life insurers to act on our findings and avoid unnecessary delays with claims.'Following the introduction of the Consumer Duty in July 2023, firms are required to ensure consumers are at the heart of their business and must act to deliver good outcomes for them.Notes to editorsRead the multi-firm review.The review was based on data requested from 15 life insurers, representing over 75% of the life protection market. The FCA asked firms to set out their customer journeys for life products within four categories: term insurance, group life cover, guaranteed over-50 plans and whole of life insurance.In September 2023, the FCA issued a Life insurance letter raising a series of concerns about poor customer services being delivered to customers. We highlighted slow transfer and claims settlement times in particular.The FCA decided to look at bereavement claims, as this is a point when customers may have a higher chance of demonstrating characteristics of vulnerability. Life Insurers paid out over 250,000 claims in connection with group and individual protection policies in 2022.Term Insurance: a policy that pays a lump sum should the policyholder die during a pre-agreed period of time.Group Life Cover: provides life cover through an employer.Over 50 plans: provides guaranteed acceptance for life cover to over 50s. Can be used towards funeral costs, paying debts or leaving some money to a loved one.Whole of Life: provides life cover for the policyholder's lifetime; can be used to meet future liabilities such as Inheritance Tax.Find out more information about the FCA.

The FCA has started criminal proceedings against 4 individuals for conspiracy to commit false accounting, with 3 of them facing further charges for fraud. Terry Dodd, John Riley and Brian Flanagan have been charged for fraudulently abusing their positions as directors of the Dial-A-Cab Credit Union for their own personal gain.The FCA alleges that the 4 individuals transferred funds out of the credit union for the benefit of themselves and their families.Terry MacPherson has been charged for conspiring with the individuals, using his position as an auditor to submit false returns to the FCA and PRA, which masked the true position of the credit union and the fraud taking place.The alleged offending took place over a 6-year period between 1 September 2012 and 4 September 2018.The defendants were granted conditional bail at Westminster Magistrates Court on 20 November 2024, and the case has been sent to Southwark Crown Court, with the next hearing on 18 December 2024.Notes to editorsTerry Dodd was born 19 January 1949John Riley was born on 26 May 1952Brian Flanagan was born on 6 February 1963Terry MacPherson was born on 8 January 1971Fraud by abuse of position is an offence under sections 1(1) and 4 of the Fraud Act 2006 (4 offences)Conspiracy to commit false accounting is a criminal offence under section 1(1) of the Criminal Law Act 1977Dial-A-Cab Credit Union was regulated by the FCA for conduct matters and authorised by the PRA for prudential matters from 1 April 2013 until 4 September 2018 when it entered administration.Find out more information about the FCA.

The proposed extension would allow firms more time to handle complaints efficiently and effectively and help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms. The FCA is seeking feedback on proposals to extend the time firms have to respond to motor finance complaints where a non-discretionary commission arrangement was involved. The regulator previously extended the time firms have to respond to motor finance complaints involving a discretionary commission arrangement (DCA).The FCA’s consultation follows the Court of Appeal’s 25 October judgment in Hopcraft v Close Brothers Ltd, Johnson v FirstRand Bank Ltd, and Wrench v FirstRand Bank Ltd.In these cases, the Court decided it was unlawful for the car dealers to receive a commission from lenders providing motor finance without first telling the customer about the commission and getting their informed consent to the payment. To obtain informed consent, the borrowers would have to have been told all material facts that might have affected their decision to enter into the agreements, which, in these cases, included how much the commission would be and how it was to be calculated. The judgment related to fixed commission motor finance agreements as well as DCAs, which the FCA banned in 2021. The 2 lenders involved in the cases intend to appeal.Firms who provide motor finance are likely to receive a high volume of complaints in response to the judgment. The proposed complaint handling extension, which the FCA previously said it would consult on, would allow firms more time to handle complaints efficiently and effectively. This would help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms.The FCA is consulting on 2 options for extending the time firms have to provide final responses to motor finance complaints involving a non-discretionary commission arrangement:Until 31 May 2025, reflecting how long it may take to hear whether the Supreme Court has granted permission to appeal. The FCA plans to set out its next steps on DCA complaints in May 2025. Subject to the outcome of any Supreme Court application, the FCA would update on motor finance non-DCA commission complaints at the same time.A longer extension until 4 December 2025, to align with the current rules for motor finance firms dealing with discretionary commission complaints.Most car finance deals arranged through a dealer involve commission. Anyone who is not satisfied with their car finance deal should complain. People who were previously told their motor finance agreement did not involve a DCA, may wish to make a new complaint. The FCA has updated its information for consumers.Nikhil Rathi, chief executive of the FCA said:'The Court of Appeal’s ruling means many customers who bought a car using finance through a dealer could be owed compensation. We want to make sure that consumers who are owed money get it in an orderly way, and that the motor finance market continues to provide competitive deals for the millions of people that rely on it.'Firms will need to use the additional time provided to ensure they have the resources to investigate and issue final responses to complaints at the end of the proposed extension. As has begun already, firms should also consider whether to make any financial provisions. The focus of the Court of Appeal decision was common law and equitable principles, rather than FCA rules. Firms authorised by the FCA must meet wider legal requirements as well as regulatory rules.The FCA is also consulting on giving consumers more time to refer motor finance commission complaints not involving a DCA to the Financial Ombudsman Service.FCA review into historical DCAs in motor financeIn January this year, the FCA launched a review of historical motor finance DCAs.The review seeks to understand if there was widespread misconduct related to DCAs before the 2021 ban, if consumers have lost out and, if so, the best way to make sure appropriate compensation is paid in an orderly, consistent and efficient way.Alongside the review, motor finance firms were given more time to provide final responses to complaints about motor finance where a DCA was involved, and consumers more time to refer their complaints to the Financial Ombudsman. This was to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while the FCA reviewed the issue and determined the best way forward.In September, the FCA further extended this until 4 December 2025. This was because it had taken longer than expected to get the data needed for the review. Before deciding its next steps, the FCA also wanted to take account of relevant court decisions. These included the recent Court of Appeal judgment and the judicial review, heard in October 2024, by Barclays Partner Finance of a Financial Ombudsman decision relating to a DCA in a motor finance agreement. The FCA is awaiting the outcome of the judicial review judgment.The FCA is considering what impact the Court of Appeal’s judgment has on the review into historical DCAs in motor finance, including for both its timeline and scope. This is likely to be influenced by any decision of the Supreme Court to hear an appeal and, should it do so, when it makes a final judgment.The FCA will write to the Supreme Court asking it to decide quickly whether it will give permission to appeal and, if it does, to consider it as soon as possible, given the potential impact of any judgment on the market and the consumers who rely on it. If permission to appeal is granted, the FCA will consider intervening to share its expertise to assist the Court.

Vacation Finance Limited, trading as VFL Finance Solutions, was placed into administration on 20 November 2024. Dina Devalia and Frank Wessely of Quantuma Advisory Limited were appointed as joint administrators. Vacation Finance Limited provided finance for timeshares. The firm is no longer offering finance to new customers.The joint administrators will write to customers with live loans explaining how you will be affected. If you have any questions, or believe you have a claim against Vacation Finance Limited, you should contact the joint administrators using the contact details below.Contacting the joint administratorsNames: Dina Devalia and Francis Florian Amadeus (Frank) WesselyPhone: 075 9922 5922Website: https://www.quantuma.com/insights/vacation-finance-limited-administrationEmail: vacation.finance@quantuma.comAddress: 15 Forlease Road, Maidenhead, Berkshire SL6 1RX

The FCA is improving the accuracy of the market cleanliness statistic (MCS), used in its annual report to measure insider trading. The MCS is based on abnormal stock price movements before takeover offer announcements.In future, the FCA will:detect abnormal price movements that happen on the same day as an announcement because the price information used is more frequentintroduce a market comparison test to ensure the statistic is less affected by market volatility, for example that caused by the Covid pandemic or Russia’s invasion of Ukraineinclude more announcements from firms with multiple takeover offersThe revised measure is higher, reflecting the scope of the statistic now including potential insider trading on the day of an announcement. In addition, the new methodology makes the statistic more robust to periods of market volatility. Based on the insights received from reports, alerts and market intelligence, the FCA has not seen an increase in market abuse.The MCS is not the only indicator of market abuse and insider dealing the FCA publishes. The FCA also uses the Abnormal Trading Volume, which looks at abnormal stock price movements, and the Potentially Anomalous Trading Ratio, which measures potentially anomalous trading in suspicious accounts. The FCA collects and analyses the results from these statistics alongside other non-public information to observe, pursue and disrupt cases of market abuse.The FCA welcomes feedback from the public, industry and academic community on these changes.Read our Research Note: A revision of our market cleanliness statistic methodology.

The FCA has banned Mr Ari Harris from working in financial services. In July 2020, Mr Harris was convicted of inflicting grievous bodily harm without intent after stabbing a man twice in the neck. He was sentenced to 3 years’ imprisonment in July 2022. Mr Harris and Reeds Motors Ltd (the firm), of which he was sole director, deliberately failed to notify the FCA of his offending, conviction and custodial sentence, despite obligations to do so. They deliberately provided false and misleading information to cover up the fact that he was in prison. Following an application in October 2022, the FCA asked the firm why it needed an additional approved person. Both Mr Harris and the firm stated that this was required as Mr Harris was currently overseas and looking into a business abroad. Mr Harris continued to mislead the FCA during a telephone call, failing to mention that he was actually in prison at the time. The FCA decided to remove Mr Harris’s approval to perform the senior management function at the firm and impose a ban which prevents him working in financial services in the future. The FCA has also cancelled the firm’s permissions. Therese Chambers, executive director of enforcement and market oversight said:‘These repeated efforts to conceal Mr Harris’ violent criminal conviction and incarceration clearly show a shocking lack of honesty and integrity. This ban is fully warranted.’Notes to editorsRead the Final Notice for Mr Harris (PDF)Read the Final Notice for Reeds Motors Ltd (PDF)Mr Harris is prohibited from performing any function in relation to any regulated activity carried on by an authorised person, exempt person or exempt professional firm. The decision was made by the FCA’s Regulatory Decisions Committee. Regulated firms and individuals subject to the Senior Managers and Certification Regime have an ongoing obligation to disclose any information of which the FCA would reasonably expect notice. This includes matters that are material to an approved person’s fitness and propriety.

Craig Buchan and Martin Cooke, former partners of MedDen Financial Services LLP (MedDen), have been fined £6,037 and £6,020 (respectively) and banned by the FCA for recklessly breaching an asset requirement imposed on the firm. The FCA imposed an asset requirement on MedDen, meaning the firm could not diminish the value of any of its own assets. The asset requirement was imposed to safeguard MedDen’s assets for the benefit of its customers who were owed redress for financial losses suffered because of advice they had received.However, the day after the requirement was imposed, Mr Buchan and Mr Cooke recklessly withdrew funds from MedDen’s bank account for their own benefit. This meant MedDen’s bank accounts held no funds for customers who were owed redress. Both individuals also failed to report the breach of the asset requirement to the FCA.Therese Chambers, joint executive director of enforcement and market oversight at the FCA, stated:'We are committed to upholding the highest standards in the financial services sector to protect consumers from misconduct.'We use our powers to impose asset requirements to protect consumers from the risk that bad actors may dissipate funds that should be earmarked for redress. We take any attempt to circumvent this very seriously and we will not allow those involved to remain active in the industry.'Notes to editorsRead the Final Notice for Craig Buchan.Read the Final Notice for Martin Cooke.The FCA has determined that both Mr Buchan and Mr Cooke were not fit and proper to perform any regulated activities due to the serious nature of their breach of the requirements.The asset requirement was put in place on 14 December 2020.The total withdrawn from MedDen’s bank account was £9,292.36 between the 15 and 21 December 2020. These funds have not been returned.Mr Cooke and Mr Buchan’s respective penalties of £61,020 and £58,437 were reduced due to circumstances of financial hardship.The FCA has imposed a financial penalty of £6,037 on Mr Buchan and £6,020 on Mr Cooke under Section 66 of the Financial Services and Markets Act (the Act). Both subjects have been issued with a prohibition order to prevent them from performing any function related to regulated activities carried out by any authorised or exempt person, as outlined in section 56 of the Act.On 1 February 2021, MedDen entered voluntary liquidation.The Financial Services Compensation Scheme has paid £2.2m in relation to 35 claims.Find out more information about the FCA.

The FCA is committed to supporting growth. The financial services sector is the engine of the country’s economy. A successful sector drives prosperity for companies, getting money to flow to small and medium-sized businesses allowing them to invest and grow.The UK is a magnet for talent and investment, with London ranking as the world’s second financial centre. We are the world leader for international bond issuance, foreign exchange trading and cross-border banking. The UK’s asset management, hedge fund and private equity sectors continue to be the largest in Europe, alongside our insurance and long-term savings market.We're a partner for growth and we support the Chancellor’s vision for achieving it. Our regulation enables a fair and thriving financial services sector that allows people to spend, save and invest in their own future.We have fully embraced our secondary international competitiveness and growth objective, embedding it into our processes, policy making and culture. We’ve established a dedicated team to advise on implementing the new objective and our policy work now clearly articulates how we have applied the objective.Our reform of UK listing rules – the most significant in 3 decades – aims to encourage a wide range of companies to list and raise capital in the UK, increasing opportunities for investors.A new platform to allow private companies to trade their securities (PISCES) will support companies to scale up and grow and provide investors with better access to exciting companies. We are engaging market participants, industry leaders, trade bodies and exchanges to develop a proportionate regulatory framework and we look forward to publishing our consultation shortly.We’ve provided asset managers greater freedom in how they pay for research and are streamlining complex EU rules in the alternative asset management sector, cementing our position as the world’s second largest asset management hub.Wholesale market firms wishing to expand into the UK can now benefit from our dedicated pre-application support service. We’re supporting UK and international insurance brokers by clarifying our conduct rules and distribution services.In response to the Mansion House speech, we have published updates on specific issues raised in the speech:Environmental, social and governance (ESG) ratingsAdvice Guidance Boundary ReviewNational payment strategyModernising the redress systemWe will work quickly with the Government, industry, consumer groups and other interested parties as we deliver this important work.Recognising the vital role we play in enabling new firms to get off the ground, we have improved our authorisation process with 98% of cases now assessed within statutory deadlines, up from 78.9% in Q1 of 2022/23. Our innovation services, such as sandboxes, support firms to test drive and refine their innovative new products while our early and high growth oversight programme helps new firms meet standards so they can grow.And we have been seeking views on how we seize the opportunity of the Consumer Duty to streamline our rulebook, so we can lower costs for businesses and support the competitiveness and growth of the economy.When it comes to growth, regulation is one part of the picture. We know there’s more to do but we are committed to playing our part.Notes to editorsWe have received the Chancellor’s letter, and we will respond in due course.In July the FCA published its first report on the Secondary International Competitiveness and Growth Objective (SIGCO) to outline how the FCA is committed to advancing the new objective set for us by Parliament in 2023 to facilitate the international competitiveness of the UK economy and its growth in the medium to long term.We have been clear our regulatory approach towards innovation will be proportionate – we will use and adapt our existing regulatory tools to protect consumers and markets while making sure we continue to embrace innovation.Our outcomes and principles-based approach to regulation, including the Senior Managers Regime and Consumer Duty, should mean firms have scope to innovate while protecting consumers and market integrity.The FCA is a founding member and convenor of the Global Financial Innovation Network, where over 80 international regulators collaborate and share approaches to complex emerging areas of regulation, including ESG, artificial intelligence (AI) and crypto.We are also 1 of 4 regulators that form the UK Digital Regulation Cooperation Forum, pooling insight and experience on issues such as AI and algorithmic processing.We published a Feedback Statement in 2023 on AI and machine learning, outlining valuable insights into the industry’s views.The FCA’s data chief Jessica Rusu has delivered a number of speeches on AI and technology: explaining how AI regulation and innovation relies on collaboration; announcing the FCA’s Digital Sandbox which uses AI to help firms test drive their innovative products; and underlining the importance of digital infrastructure for getting AI integration right.Our services cater for the whole product life cycle from product ideation to launch.The Regulatory Sandbox gives firms the ability to test products and services in a live but controlled environment.Our Innovation Pathways service includes guiding firms through regulation through one-to-one discussions with a dedicated case manager assigned to provide insight, clarity and feedback on the way in which their business model fits within the regulatory framework.The Digital Sandbox provides GDPR-compliant datasets and APIs, secure development environment and access to community for innovative businesses.

The Financial Conduct Authority (FCA) and Financial Ombudsman Service have published a joint call for input to seek views on how to modernise the redress system, so it better serves consumers and provides greater stability for firms to invest and innovate.The organisations will also improve how they work together, and with industry and consumer groups through the Wider Implications Framework, to prevent the escalation of issues that can result in mass complaints and create significant redress liabilities for firms.This follows the Chancellor’s calls for greater cooperation between the organisations to give firms a more predictable regulatory environment that supports UK growth and international competitiveness.Read more on our response to Mansion House.

We have set out the next steps in our work on closing the advice gap, following feedback on our Discussion Paper (DP23/5). We want people to be able to make informed decisions about their finances with confidence – and for people to have access to the help, guidance and advice to do so.We want to support a healthy investment culture, where people have the confidence to invest as well as to save. This will not only benefit consumers but will also provide capital to drive the economy and boost growth.In December 2023, the FCA and the Government put forward proposals on how we could better ensure there was affordable support for people to navigate difficult financial and investment decisions, to meet a variety of needs, in easy-to-access ways. Our recently published update explains the next steps in this work.We will first focus on pensions. Consumers increasingly rely on defined contribution (DC) pension savings and must make complex decisions in relation to these, including how to access their pension savings. This is one of the most important financial decisions they will make.In December 2024, we will consult on high-level proposals for targeted support in pensions, which would allow firms we regulate to provide support to pension savers in a new way.Building on our pensions work, in H1 2025, we plan to consult on rules for better support for consumers in retail investments and pensions.Read our full update on the Advice Guidance Boundary ReviewOn 15 November, we also published a statement with The Pensions Regulator and the Information Commissioner’s Office, giving firms greater clarity on communications they can make to help pensions and retail investments customers.Read the joint statement

The FCA welcomes the Government’s publication of their consultation response and the draft legislation on bringing environmental, social and governance (ESG) ratings providers into regulation. This is widely supported by industry. As financial services firms integrate ESG into their activities and expand their products in this space, they are increasingly reliant on third party ESG data and ratings services. We have previously said we support bringing ESG ratings providers into regulation, to improve transparency and trust in the market.Making new rulesWe will continue to work closely with the Government on their next steps as they welcome technical comments on their draft legislation.Once the legislation is finalised by the Government next year, we intend to consult on proposals for the future regulatory regime in 2025.We support a globally consistent approach that enables users to make better informed investment decisions and gives the market confidence in the reliability and quality of these products. Our regime will be proportionate and in line with the International Organisation of Securities Commission (IOSCO) recommendations, which focus on transparency, good governance, managing conflicts of interest, and proper systems and controls.Next stepsAs we develop the future regulatory regime, we will engage widely to inform our approach. This will include all types of ESG ratings providers and users. We support a level playing field between all firms providing ESG ratings. We will continue engaging with other international authorities, including the EU, to support regulatory alignment.In 2023 we supported the launch of an industry-led Code of Conduct for ESG ratings and data product providers, which is grounded in the IOSCO recommendations. We continue to encourage both ESG data and ratings providers to sign up to the Code. This has been leveraged by Hong Kong to develop their Code, and other countries such as Singapore and Japan have introduced their own Codes of Conduct.

We share the vision of an innovative, safe and competitive payments sector, embracing technological change to better serve people and business.The changes announced today will help ensure better coordination and clearer regulatory responsibilities. We will continue to work closely with the Payment Systems Regulator (PSR), the Bank of England and the government to deliver the vision we share.We look forward to building on the work we’ve done in close partnership with the PSR so Open Banking can deliver benefits for consumers and industry.And we welcome the vision’s clear focus on tackling financial crime, which is one of our strategic priorities.

The decision to consult follows the Court of Appeal’s judgment in Hopcraft v Close Brothers Ltd, Johnson v Firstrand Bank Ltd, and Wrench v Firstrand Bank Ltd. The FCA will consult on extending the time firms have to respond to consumer complaints about motor finance where a non-discretionary commission was involved, and for consumers to refer them to the Financial Ombudsman Service. The proposals are expected to be published within 2 weeks and, if taken forward, would mean the complaint extension is in place by mid-December 2024. The FCA’s decision to consult follows the Court of Appeal’s 25 October judgment in Hopcraft v Close Brothers Ltd, Johnson v Firstrand Bank Ltd, and Wrench v Firstrand Bank Ltd. Since that judgment, the FCA, as part of its close market monitoring, has undertaken extensive industry engagement. The regulator joined an industry and government discussion, convened its own industry roundtable and has spoken with 63 firms. The FCA has also discussed the judgment’s implications with consumer representatives.Motor finance firms are likely to receive a high volume of complaints in response to the recent Court of Appeal judgment. Any complaint extension would allow them time to consider how these might be efficiently and effectively handled. This would help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market.In Hopcraft, Johnson and Wrench, the Court of Appeal decided it was unlawful for the brokers (car dealers) to receive a commission from the lender providing motor finance without obtaining the customer’s informed consent to the payment. This required the consumer to be told all material facts, including the amount of the commission and how it was to be calculated. The judgment related to fixed commission in motor finance agreements as well as discretionary commission arrangements (DCAs), which were banned by the FCA in 2021.The focus of the Court of Appeal decision is common law, rather than FCA rules or principles. Firms authorised by the FCA must meet wider legal requirements as well as regulatory rules. The interpretation of common law is rightly for the courts. The 2 lenders involved in the cases intend to appeal. The proposed complaint extension will cover at least the period until the Supreme Court decides whether to grant permission to appeal. The FCA will include options on the length of the proposed extension in its consultation. The FCA will write to the Supreme Court asking it to decide quickly whether it will give permission to appeal and, if it does, to consider it as soon as possible, given the potential impact of any judgment on the market and the consumers who rely on it. If permission to appeal is granted, the FCA will consider intervening to share its expertise to assist the Court.Motor finance firms will need to use the time provided to ensure they have the resources to issue final responses to complaints at the end of a proposed extension. Motor finance firms are also likely to need to consider whether they should make any financial provisions as complaints need to be handled in line with the law. Customers who believe they have cause to complain about commission arrangements should make them as normal. FCA review into historical DCAs in motor financeIn January this year, the FCA launched a review of historical motor finance DCAs across several firms. The review seeks to understand if there was widespread misconduct related to DCAs before the 2021 ban, if consumers have lost out and, if so, the best way to make sure any compensation owed is received in an appropriate settlement in an orderly, consistent and efficient way.Alongside the review, motor finance firms were given more time to provide final responses to complaints about motor finance where a DCA was involved, and consumers more time to refer their complaints to the Financial Ombudsman. This was to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while the FCA reviewed the issue and determined the best way forward.In September, the FCA further extended this until 4 December 2025. This was because it had taken longer than expected to get the data needed for the review. Before deciding its next steps, the FCA also wanted to take account of relevant court decisions. These included the recent Court of Appeal judgment and the outcome of the judicial review, heard in October 2024, by Barclays Partner Finance of a Financial Ombudsman decision relating to a DCA in a motor finance agreement, on which judgment is expected shortly. The FCA is considering what impact the Court of Appeal’s judgment has on the review into historical DCAs in motor finance, including for both its timeline and scope. This will inevitably be heavily influenced by any decision of the Supreme Court to hear an appeal and, should it do so, its timelines.

UK financial regulators have confirmed new rules to bolster the resilience of technology and other third parties providing key services to financial firms. Financial firms and financial market infrastructures (FMIs), such as payment systems, have become increasingly reliant on the services of a small number of third party providers, known as critical third parties. While these third parties can enhance competitiveness for the sector, disruption or failure to one of them—such as a cyber-attack or power outage—could affect a large number of consumers and firms, and threaten the stability of the UK financial system.That is why, in 2023, the government gave regulators new powers to oversee the resilience of the services these third parties provide the sector, that may cause risks to financial stability. Today, the Financial Conduct Authority, Bank of England and Prudential Regulation Authority have set out how they intend to use their new powers, having consulted widely and working closely with industry to inform the design of the regime. The new rules align closely with international standards and similar regimes, like the EU’s Digital Operational Resilience Act.The final rules, when implemented, will not only strengthen the resilience of the services that critical third parties provide to individual firms, but will improve the resilience of the UK financial services sector as a whole. By strengthening resilience and promoting market stability, this will ensure the UK is an attractive place to do business.The government will decide which third parties should fall under the new regime based on advice from regulators.The new rules do not reduce the responsibility of financial firms and FMIs in making sure they are resilient to operational shocks and for their management of third-parties, in-line with our existing outsourcing and operational resilience rules.The regulators welcome engagement from industry over the coming months as the regime is implemented.More informationPolicy Statement (PS) 24/16 Operational resilience: Critical third parties to the UK financial sectorSupervisory Statement: Operational resilience: Critical third parties to the UK financial sectorThe Regulators’ approach to the oversight of Critical Third PartiesJoint ForewordEnforcement statementCritical Third Parties – HM Treasury’s Approach to DesignationThe final rules and policy will come into effect on 1 January 2025.Critical third parties once designated will not be overseen in their entirety by the regulators, but the third-party services they specifically provide to the financial services sector will be overseen.The rules will require critical third parties, once designated, to:provide regular assurance, information and notifications to the financial regulators on their servicesundertake various forms of resilience testing and scenario-based exercises, including collaborating on some with their firms and FMIsreport major incidents like cyber-attacks, natural disasters and power outagesIn December 2023, the financial regulators published an extensive consultation with the sector, which received broadly supportive feedback from over 60 respondents in the industry.

The FCA has fined Metro Bank PLC (Metro) £16,675,200. Between June 2016 and December 2020, Metro failed to have the right systems and controls to adequately monitor over 60m transactions, with a value of over £51bn, for money laundering risks. Metro automated the monitoring of customer transactions for potential financial crime in June 2016. However, its system did not work as intended. An error in how data was fed into the system meant transactions taking place on the same day an account was opened, and any further transactions until the account record was updated, were not monitored. Junior staff did raise concerns about some transaction data not being monitored in 2017 and 2018, but these did not result in the issue being identified and fixed. Even once a fix had been put in place in July 2019, Metro did not have a mechanism to consistently check that all relevant transactions were being fed into the monitoring system until December 2020, over 4 and a half years after the system was implemented. Therese Chambers, joint executive director of enforcement and market oversight, commented: ‘Metro's failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long.’Since the firm’s identification of the issues with its transaction monitoring system in April 2019, Metro has put in place processes to remediate the issues identified. The FCA continues to supervise firms to ensure that they have the right systems and controls to manage financial crime risks.Notes to editorsRead our Final Notice.Metro Bank breached Principle 3 of the FCA’s Principles for Businesses – management and control.Metro Bank would have been fined £23,821,700, but it agreed to resolve these matters and so qualified for a 30% discount under the FCA’s processes.See previous FCA enforcement outcomes.Find out more information about the FCA.

Following a review, we have improved our disclosure processes in regulatory enforcement cases. In Seiler and others v FCA [2023] UKUT 00133, the Upper Tribunal recommended that we should review certain elements of the disclosure process in regulatory enforcement cases. This relates to disclosure of evidence as part of any regulatory case.We have completed the review and have made a number of changes to our processes.Most significantly, we are:taking a broader approach to disclosure which will mean our review of documents is not focused only on identifying potentially undermining materialenhancing our existing training on disclosure to include additional specialist training for those managing and overseeing disclosure exercisesproviding additional training for staff and more detailed guidance on quality assuranceclarifying the roles and responsibilities of staff and managers involved in disclosure, andgiving greater emphasis to the importance of disclosure in measuring and rewarding staff performanceWe are required to disclose all documents on which we rely to build regulatory enforcement cases, as well as any other material which in our opinion might undermine our decision to take action.Under our new broader approach, we will disclose all material that is relevant to the facts of the matter, save where it is disproportionate, not in the public interest, or otherwise inappropriate to do so. This will include all material that is potentially undermining as well as supportive material. Disclosure reviews will be aimed at identifying all the relevant material and will not be focused on only looking for potentially undermining material. This will reduce the risk that we mistakenly fail to disclose a document.Overall, the aim of our changes is to improve the quality of our disclosure by providing greater support for case teams.We will closely monitor the effectiveness of the changes we are making, and will conduct a further review in approximately 12 months’ time to assess whether we should take further steps to improve our processes.

The FCA has banned Leigh Mackey from working in financial services and fined him £1,102,879 for misleading the FCA and misusing funds due to insurers. Between 12 September 2011 and 8 December 2019, Mr Mackey had sole management control of Inspire Insurance Services Ltd (Inspire), an insurance broker for the construction sector.Mr Mackey used funds due to insurers to support Inspire’s operating costs and to pay for personal living expenses instead of paying insurers.By his own admission, Mr Mackey accepts that, due to his actions, Inspire owes insurers over £660,000. Estimates by Inspire’s liquidator are significantly higher, suggesting a shortfall of over £2.2m.Mr Mackey was not truthful with the FCA. Inspire submitted regulatory reports over 4 years stating it had carried out required client asset audits. Mr Mackey admits it failed to carry these out.Therese Chambers, joint executive director of enforcement and market oversight at the FCA said:'Mr Mackey helped himself to insurer funds to prop up his business and personal finances. This fine and ban shows how seriously we take individuals who abuse their position for personal gain and risk damaging the integrity of the UK’s financial system.'Notes to editorsFinal Notice 2024: Leigh Mackey.The FCA has imposed a financial penalty on Mr Mackey of £1,102,879 for his failure to comply with (as applicable during the relevant period) Statements of Principle 1 and 4 and COCON Individual Conduct Rules 1 and 3, pursuant to section 66 of the Financial Services and Markets Act 2000 (the Act). Mr Mackey’s penalty comprised of two elements – disgorgement of £968,479 and a penal element of £134,400.In addition, Mr Mackey is not a fit and proper person as he lacks honesty and integrity and poses a risk to consumers and to the integrity of the UK financial system. The Authority has made an order prohibiting Mr Mackey from performing any function in relation to any regulated activities carried on or by any authorised or exempt person or exempt professional firm, pursuant to section 56 of the Act.Inspire was placed into liquidation by Mr Mackey on 6 November 2020 (following intervention action by the Authority) and remains in liquidation as of the date of this Notice.Find out more information about the FCA.

Two individuals have been convicted for their roles in an £1.5m investment fraud following a prosecution brought by the FCA. Between February 2017 and June 2019, Raymondip Bedi and Patrick Mavanga, defrauded at least 65 investors out of £1,541,799. The group cold-called consumers, directing them to a professional-looking website where they were offered high returns for fake investments in crypto.Raymondip Bedi pleaded guilty to conspiracy to defraud, conspiracy to breach the general prohibition under the Financial Services and Markets Act 2000 and money laundering offences at an earlier hearing.Patrick Mavanga pleaded guilty to conspiracy to defraud, conspiracy to breach the general prohibition under the Financial Services and Markets Act 2000 and possession of false identification documents with an improper intention at an earlier hearing.Patrick Mavanga was convicted of perverting the course of justice for the deletion of phone call recordings following the arrest of Raymondip Bedi in March 2019.The jury were unable to reach a verdict on a third defendant, and they will face a retrial in September 2025. A fourth individual, Rowena Bedi, was acquitted of the one charge they faced relating to money laundering.Steve Smart, joint executive director of enforcement and market oversight at the FCA, said:‘Bedi and Mavanga lured investors with promises of high returns on crypto investments, but their schemes were nothing but a callous scam. If you’re contacted out of the blue about an investment opportunity that sounds too good to be true, then it probably is. If you’re in any doubt – don’t invest’Bedi and Mavanga will be sentenced at a later date. A further individual, Minas Filippidis is wanted in relation to the same offences.The FCA’s ScamSmart campaign provides advice on how to spot and avoid investment scams.The FCA has attempted to contact investors who lost out. Anyone who was scammed by Bedi and Mavanga and has not heard from the FCA should call 0800 111 6768 or email operationhickory@fca.org.uk. They operated companies including CCX Capital and Astaria Group LLP.Notes to editorsRaymondip Bedi, date of birth (dob) 09/10/1989 of Bromley, London. Patrick Mavanga, dob 24/11/1984 of Peckham, London. The individuals were charged in April 2023 - Four individuals face fraud charges.Under Section 19 of the Financial Services and Markets Act 2000 (FSMA), a person cannot carry on a regulated activity in the UK unless they are FCA authorised or exempt (this is the General Prohibition). Any person who breaches Section 19 of FSMA is committing a criminal offence for which the maximum sentence is 2 years’ imprisonment.Money laundering under the Proceeds of Crime Act 2002 is a criminal offence punishable on conviction by a fine and / or up to 14 years’ imprisonment.Conspiracy to defraud is an offence under the Criminal Law Act 1977 and the Fraud Act 2006 with a maximum sentence on conviction of 10 years’ imprisonment.Under section 4 of the Identity Documents Act 2010 the offence of possession of false identity documents with an improper intent has a maximum sentence of 10 years' imprisonment.In 2023/24, the FCA secured 9 successful fraud prosecutions and charged 21 individuals with financial crime offences; the highest number of charges in any single year.Find out more information about the FCA.

Speech by Emily Shepperd, FCA chief operating officer, delivered at the UK Sustainable Investment and Finance Association (UKSIF) Leadership Summit, IET London.

The FCA has started criminal proceedings against Anthony Hay, Laura Hay, Tim Stewart, Premier Finance GB Ltd and Proserv GBR Limited, for allegedly engaging in unauthorised business. Anthony Hay, Laura Hay and Tim Stewart are jointly charged for their involvement in the conduct of two Bristol firms, Premier Finance GB Ltd and Proserv GBR Limited, in relation to high-end luxury vacuum cleaners retailing for up to £3,000. Between 1 April 2014 and 31 March 2023, the firms are alleged to have generated at least £4m from unlawful business activities involving thousands of customers.The individuals are accused of engaging in regulated credit agreements, hire agreements and contracts of insurance (service packages and callout covers) for vacuum cleaners, when they were not authorised by the FCA to do so. The firms also collected money from credit and hire customers without FCA authorisation. Anthony and Laura Hay served as directors of the companies and Tim Stewart was the compliance manager at both companies.The defendants will appear before Westminster Magistrates’ Court on 7 November 2024.Notes to editorsAnthony Hay’s DoB (date of birth) is 4 June 1968. Laura Hay’s DoB is 3 May 1979. Tim Stewart’s DoB is 20 October 1985.The FCA is prosecuting the above firms and individuals for breaches of section 23(1) of the Financial Services and Markets Act 2000 (FSMA) namely by carrying out debt administration and debt collection, entering into regulated credit agreements and hire agreements, and effecting and carrying out contracts of insurance with retail customers for vacuum cleaners, whilst not being authorised.The FCA is also prosecuting Mr Hay, Ms Hay and Mr Stewart as company officers under section 400 of FSMA, in that they consented, connived or neglected to act in relation to the firms’ misconduct.Carrying out unauthorised business is an offence punishable by a fine and/or up to two years’ imprisonment.Find out more information about the FCA.