Following the close of the formal part of the event the APCC will be hosting a networking session at a local hostelry for all delegates and speakers.

Registration is now open for this event.  As before the Compliance Consultants Forum Event is open to all compliance consultants and includes speakers from the FSA and industry with question and answer sessions on Key Regulatory issues, including:

•    a full keynote address from Mike McAteer, director of the FSA
•    developments in S166 reporting
•    retail enforcement from both the FSA and from the lawyers who advise regulated firms
•    retail distribution
•    MiFID2 and other EU developments
•    a report from Simon Collin, chairman of the Association, on what the APCC plans for 2012 and beyond
•    the 2012 annual general meeting of the Association (the formal notice for this will be sent out separately)

And as previously after the close of the formal part of the event the APCC will be hosting a networking session at a local hostelry for all delegates and speakers.

Online Attendance Option

Delegates can attend in person or via webex.  Attendance by webex will allow you to hear the speakers and see any presentations being made from your desktop.

Booking form

To attend this event, complete the booking form and either email it or post it to us at the address on the form.

We are very pleased that the FSA is actively looking to assist consultancy firms in helping their clients prepare for these assessments.  The event will be interactive with ample opportunity for you to ask questions regarding the assessments and to provide feedback to them.  More details of these roadshows can be found on the FSA website.

The event will take place in the Schroders Auditorium at their offices in 31 Gresham Street. Registration for the event opens at 9:30 with the event starting at 10 am, the event is expected to finish between 12:30 and 1 pm.

The event is available to delegates from member firms only and the cost is £48 per delegate (i.e. £40 plus VAT), please complete the attached registration form for each delegate wanting to attend.  If your firm is unable to send the fee (either by cheque or online payment) with the completed registration form due to time constraints then we will invoice you for the delegate fee so that payment can follow later.  Further details are on the registration form. 

It is wide ranging and has significant potential impact to both lenders and intermediaries, not to mention customers who will be impacted by the proposed changes.

The APCC would like to respond to this CP and we are interested in hearing from members in this respect. We believe it is in our interests to do so and will help continue to raise our profile within the FSA.

To this extent we would appreciate responses to the following questions so we can determine the best way forward:

• Are you interested in providing feedback to the Consultation?
• If the FSA were willing to attend a meeting where we could facilitate a Q&A and provide some feedback to them would you wish to attend (probably London based)?
• If the FSA were not willing to attend would you be interested in attending an APCC session to discuss the impact and gather feedback towards our response?
• Do you want to provide the APCC with responses to any of the specific questions from the consultation but not attend a meeting? (see list of questions for completion)
• Is your interest in a) intermediaries b) lenders c) both?

We recognise that it is often difficult for a wide ranging body such as the APCC to get a consensus on every aspect but we do hope to be able to get consensus on a lot of points and can then provide a split view on the other parts. It does, however, take a great deal of time and effort to co-ordinate and draft up and the earlier we start the better.

Please send in your response to the APCC by 27th January.

2 February:  London - Business Risk Awareness Workshop
12 March:  London - Annual Forum
20 June:  Huddersfield - Northern Forum
19 September:  Huddersfield - Northern Forum
19 December:  Huddersfield - Northern Forum

TIMINGS AND LOCATION AND REGISTRATION DETAILS
The workshop was from 2 pm until 4 pm on 19 October and for those not using the webinar facility the workshop was at the offices of Resources Global, 117 Houndsditch, London EC3A 7BT. 

The workshop was free to delegates from member firms and £60 (£50 plus VAT) for delegates from non-members, whether delegates attended in person or via the webinar.   Delegates from non-member firms were only allowed to attend by webinar.

The APCC held a forum on 10 August in London to get initial responses to the FCA approach document and this was followed up with a draft response which was circulated to members for their comments and further input.  Following on from this a final response was sent to the FSA on 31 August.  Click here to download the APCC response document.

The APCC is grateful to those member firms who were not on holiday during this consultation period (and to those that were) and who were able to add input to the response document.

Charles Meade King lead the discussion on the FCA Approach to Regulation June document and a number of issues and concerns were raised and discussed.   It was agreed that these issues would be circulated to the membership for further consultation. 



At the end there was a wide ranging discussion on the APCC's strategic direction accompanied by light refreshments.

UPDATED FSA APPLICATION PACKS
The FSA application packs have been updated, the forms that have been changed are:

The forms that have been changed are:-
• Core details and appendices.
• Supplement for Investments, Mortgages and non-investment insurance contracts and also Connected Travel Insurance.
• Supplement for Securities and Futures Firms (complex) and (non-complex).
• Supplement for Investment Management Firms.
• Supplement for Advisers and Arrangers.
• Relevant checklists and declarations.

The changes include corrections to dates, legislation and handbook references, improving consistency throughout the application forms, removing questions that were no longer relevant and adding further questions reflecting the FSA’s more intrusive approach and general developments in the marketplace e.g. TCF, Non advised sales, UCIS, Platforms, Mortgages, PPI.

The FSA is continuing to work on updating and revising the remaining less frequently used supplements.

The FSA is now asking applicant firms to complete the IT self-assessment questionnaire which is displayed on the completed “build your own application” page of the FSA website.  When completed the form indicates whether the applicant firm needs to complete a Complex IT form.  The applicant firm is required to include this completed form in its application pack. 

The FSA will continue to accept old versions of the packs until the end of December 2011 but applicant firms should expect to be asked those new/additional questions in the revised packs by case officers.

The agenda for the event has been left relatively loose but will include the following: 

• Future direction of the APCC
• Desires of members – i.e. benefits of membership and ideal solutions
• Engagement with other bodies, AIFA etc?
• Future industry direction – product risks / consumer engagement
• FSA engagement and recent reviews/experiences – consistency challenge
• General discussion.

If you would like to attend please email Hilary Spivey.  Spaces are limited and will be on first come first served basis.

For further information and a proposal form please e-mail charles.wintour@towergate.co.uk.

This financial promotion has been approved by Towergate Underwriting Group Limited.  Towergate Risk Solutions is a trading name of Towergate Underwriting Group Limited. Authorised and regulated by the Financial Services Authority.

On the morning of 22 February 2011 representatives from APCC member firms will be having a roundtable discussion with the FRC on the implementation of the UK Stewardship Code and in particular on the compliance statement that is now required to be published by all regulated asset manager firms. 

There is a very limited number of spaces currently available for this event.  If you would like to attend please email Hilary Spivey.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/066.shtml

Speaking at a conference for financial advisers, Stephen Bland, Director of Small Firms, warned that a misconception that small retail firms could escape the FSA's attention was wrong and risked tarnishing the industry. The FSA's risk-based approach to regulation enables it to supervise a large number of small firms effectively and assists the regulator to take appropriate action against firms who pose a significant risk to consumers.

I will cover four areas:

Outcomes

From firms we want to see a stronger focus on the outcomes that really matter for consumers. We want senior management to develop a greater understanding of how the Principles and our other high-level requirements should apply in practice; to drive and embed change throughout their firms; and to measure that this is delivering the right outcomes. A more principles-based approach also provides senior management with greater flexibility in how they run their business while meeting our requirements, and greater scope to compete and innovate while doing so; or indeed to compete by exceeding our minimum requirements.

So a more principles-based and outcome-focused approach should encourage senior management to focus more on the Principles and the outcomes we want them to deliver; and should therefore deliver these outcomes more effectively.

We also welcome market-led solutions where we use our influence rather than our formal powers to encourage the industry to change. For example, following our challenge to the industry on contract certainty in December 2004, the market has achieved considerable success in tackling the practice of 'deal now, detail later'. This was achieved without the need for any additional rules and guidance from us. Our Retail Distribution Review is looking for market-led solutions to address issues surrounding the availability of advice, sustainability, professionalism and incentives in the distribution of retail investment products. And at a more detailed level, we have been successful in changing industry behaviour on the advertising of general insurance products by discussing our findings with the marketing directors of firms, not just with compliance directors.

For consumers we are working, in partnership with many others, to improve levels of financial capability. We want consumers to be capable and confident in dealing with the financial services industry. And we are looking for ways to encourage consumers to engage more actively when dealing with financial products and services, since it is in their own best interests to do so.

Principles and guidance

Our move towards more principles-based regulation is not about any lowering of our standards. We are not changing our Principles and other high level requirements. Our Principles are themselves rules. They articulate the outcomes we require firms to deliver. Examples include that firms must conduct their affairs with integrity, that firms must pay due regard to the interests of their customers and treat them fairly, and that firms must maintain adequate financial resources.

In terms of our rules and guidance, there are three ways in which we have shifted the emphasis to a more principles-based approach.

First, we have deleted many of our detailed rules. We have deleted our detailed rules on money laundering, and replaced them with some short high-level requirements. We have consulted on a new Conduct of Business Sourcebook for investment business that is half the length and written much more clearly than the previous version. We are consulting on a more principles-based approach to the permitted links regime. And we have announced our intention to consult on a more principles-based and more differentiated approach to insurance conduct of business requirements, where again we want to halve the length of this section of our Handbook. For commoditised insurance products such as household or motor we believe the markets work reasonably well in the interests of consumers - for these products we are looking at removing requirements that go beyond the relevant EU Directives. In contrast we have found greater risk of consumer detriment for those buying personal protection products and so we are considering a small number of additional measures to improve sales practices around these products.

Second, we see scope for imaginative approaches to how the minimum requirements set by our Principles and other high level rules can be illustrated and interpreted. We have already produced a wide range of supporting materials such as statements of good - and of less good - practice; case studies; short guides to our key requirements; self-assessment tools for small firms; and reports of what we have found from our thematic work into various issues. This includes supporting material relating to insurance specific topics such as our guide to brokers on our client money requirements; statements of good and poor practice on consumer friendly statements on the use of discretion in with-profit funds, on selling general insurance products through call centres, and on advertising general insurance products; and various guides to what constitutes good practice when selling or advising on payment protection insurance.

Third, we have consulted on the possibility of our “confirming” guidance developed by the industry that meets our minimum standards and helps firms in areas – hopefully not too many of them - where they want more detail to provide them with a “sturdy breakwater”. Although we have not yet introduced this confirmation process, we have in effect already adopted this approach. There have been two recent examples in the insurance sector.

Following the introduction of our risk-based capital adequacy regime for insurers at the start of 2005, our regime has led to significant improvements in risk management and to the understanding of risk and capital issues by the senior management of firms. In February this year the Association of British Insurers (ABI) in partnership with others published a Guide to the Individual Capital Assessment Process for Insurers. We worked closely with the ABI and other trade bodies to develop this helpful piece of guidance that provides commentary and examples of how firms may achieve our standards and objectives for Individual Capital Assessments.

Our thematic review of unit linked funds found weaknesses in the existing regime in relation to unit pricing and pricing errors. We worked with industry to come up with an industry-led solution and in June 2006 the ABI produced the 'Guide of Good Practice for Unit Linked Funds'. ABI member firms agreed to do a gap analysis of any issues with regards to pricing by December 2006. Firms then started to put remedial plans in place to deal with any issues they have uncovered. Our supervisors are now starting to work with firms to look at the gap analysis, and see if the remedial actions being taken are appropriate and timely.

We also recognise the need to make our supporting materials, and any industry guidance that we confirm, easily accessible to firms.

Investing in our people

Our people, and the way in which they behave, are more important to the success of more principles-based regulation than rewriting our Handbook of rules and guidance. In line with the expectations we are placing on firms, we need to ensure that our people are able to make outcome-focused judgements relating to our Principles, and are able to influence and persuade the senior management of firms through discussions that focus on these high level requirements.

This requires our people to have the right skills, knowledge, capabilities and behaviours. This ranges from our people having a deep and up-to-date understanding of the products, services and markets in which the firms we regulate operate, to our people adopting a genuinely flexible approach to the ways in which firms can demonstrate compliance with the Principles while meeting our desired regulatory outcomes.

We are recruiting and investing in our people accordingly. And I am pleased that we are already seeing some welcome evidence of this in the feedback we have received from both large and small firms, although we recognise that there is further to go here.

Under a more principles-based approach we also need to focus on fewer, higher level and more strategically aligend themes; to join up even more effectively our thematic and firm-specific work so that these are mutually reinforcing; and to communicate clearly to our stakeholders how all of our activities fit together to deliver the outcomes we are seeking.

Treating Customers Fairly

Our Treating Customers Fairly initiative is a specific and long-standing example of our more principles-based approach. This is a key element of our strategy to make retail markets work more effectively and thus to deliver benefits to consumers.

The requirement that firms treat their customers fairly is enshrined in the sixth of our Principles, which states that “A firm must pay due regard to the interests of its customers and treat them fairly.”

Our work in the retail market has consistently found that some firms do not treat their customers fairly. To address this, and given the limitations of detailed rules, we decided four years ago to focus more on the Principle itself; to highlight the areas where customers were vulnerable to unfair treatment; to encourage firms to challenge themselves to ensure that they do treat their customers fairly; and to stress the responsibility of the senior management of firms to deliver this and to demonstrate that they are doing so. This should lead to real and identifiable benefits for consumers.

In July last year we set a deadline for all firms to be at least implementing Treating Customers Fairly initiatives in a substantial part of their business by the end of March 2007 To meet this test, firms needed to show they had allocated appropriate resources and responsibilities, developed plans and processes, and created capability to meet the Treating Customers Fairly principle. The aim was to stimulate action in firms that were slow to appreciate the significance of Treating Customers Fairly; to maintain momentum in those firms that were moving ahead with their Treating Customers Fairly initiatives; and to demonstrate how seriously we take Treating Customers Fairly within our more principles-based approach.

The results that we published earlier this week showed that many firms have made good progress with their Treating Customers Fairly work. The implementation deadline helped to focus firms' efforts on Treating Customers Fairly and generated momentum within the industry as a whole. The proportion of firms that met the deadline varied from 93% of major retail groups and 87% of medium-sized retail firms to 41% of a sample of small firms. Within this, life and general insurance firms were broadly in line with the overall figures.

Only 45% of general insurance intermediaries in our sample of small firms satisfied us that they have reached the implementation stage. This is broadly in line with the overall rate for small firms. More progress clearly needs to be made here, and quickly. Small firms ought to be able make relatively swift progress; we have provided many tools to help them to do so, including our self-assessment tool for Treating Customers Fairly; and we strongly encourage the management of these firms to move ahead on this.

We will increase the focus and intensity of our supervision of firms that missed the end-March deadline. We will take a targeted approach, depending on the reasons a firm failed to meet the deadline, and the scale of the task they face in filling the gap. Our follow-up work is likely to have significant cost implications for these firms.

Beyond implementation, most firms need to go further to reach the embedding phase of Treating Customers Fairly and thereby to deliver fair consumer outcomes consistently. This is, and will continue to be, a significant challenge for most firms, and requires sustained focus from senior management. To reinforce this we have decided to set further deadlines.

By the end of March 2008 firms are expected to have appropriate management information or measures in place to test whether they are treating their customers fairly. And by the end of December 2008 all firms are expected to be able to demonstrate to themselves and to us that they are indeed consistently treating their customers fairly.

So, for the time being, a more principles-based approach does not mean that we will confine ourselves entirely to high-level conversations with the senior management of firms in order to establish that our desired regulatory outcomes are being met. There remains a role for more detailed testing, not least to determine whether the aspirations and intentions of senior management are indeed being translated into putting in place appropriate procedures and into delivering the right outcomes in the customer-facing operations of their firm, especially if firms are not yet testing this. But where firms can demonstrate their own performance (and it is good), there will be less scrutiny by us and therefore a clear regulatory dividend for the firm.

Conclusion

I believe that better outcomes for consumers will be delivered more effectively if the senior management of firms focus on the Principles and our other high level requirements, and if they ensure that these are met throughout their businesses. I look forward to continuing to work with the industry to deliver this.

To access this speech from the FSA website click here.

Ralph Lindeyer resigned as chairman of the Steering Council having served two years and Simon Collins was appointed in his place.