CHO AGM Compliance Update Iain Stephen Jt. CEO Compliancy Services 24th November 2016 www.compliancy-services.co.uk @compliancysrvcs

Todays topics FCA Business plan 2016/2017 2016 updates Complaints Appointed Representatives

FCA Business Plan 2017 Recognise a changing population 1.1 million increase in over 65s by 2020 85+ fastest growing age group in UK 7% of UK workforce self employed 26% of first time buyers took a 35 year mortgage in 2015

The FCA at work Regulate over 56,000 firms and 125,000 Approved Persons Determined 30,000 applications from CC firms in 2015 1004 New firms authorised in 2015 134,000 consumers helped by contact centre 2015 £250m paid in redress by payday lenders 200,000 people visited FCS ScamSmart hub

FCA priorities 2017 Constructive Deterrence Risk outlook central to business plan: Constructive Deterrence Top 2 themes prioritised Wholesale markets Provision of advice Pension freedoms created new possibilities and also risks More choice/ownership of retirement income Critical decisions require best advice/guidance Technology Drive down costs/increase quality of service Challenges: resilience, cyber crime/financial exclusion

Constructive Deterrence Challenge poor conduct Culture & Governance 2 key priorities closely related Committed to making markets work effectively and fairly Enforcement powers to reinforce policy objectives

Cornerstones of risk Governance Culture Controls

FCA regulated activities Insurance mediation Assisting with the administration and performance of insurance contracts (FNOL and claims against insurers) Arranging / advising on insurance contracts BTE/ATE Insurance backed excess cover Acting as agents of insurers Consumer Credit Credit broking Consumer Hire Debt adjusting / counselling/ administration

Complaints Eligible complainants New rules from June 2016 Informal complaints

Eligible Complainants A consumer A micro business enterprise - less than 10 employees - annual T/O <€2m - Charity with income <£1m - Trustee of a trust with net asset value of £1m

Internal Complaints Handling Procedure must meet the following requirements: A firm must: Publicise it is subject to the Financial Ombudsman Service. Publish its own internal complaint handling procedures and, at the point of sale, or when it first provides customers with documentation, refer to their availability. Normally achieved by including reference to the complaints procedures in the following documents: Terms of Business Letter Initial Disclosure Document or Combined Initial Disclosure Document

Time limits If resolved by close of business within 3 days represents an ‘Informal’ complaint: On resolution issue ‘Summary Resolution Communication’ offer internal escalation and FOS details Not resolved within 3 days becomes Formal Complaint subject to DISP rules promptly send a written acknowledgement of the complaint (within 5 days) include the name or job title of the relevant contact point within the firm details of its internal complaint procedures If made orally, a firm should try to confirm it's understanding of the complaint when it sends an acknowledgement A complaint may be acknowledged by email if received by email   A firm should aim to resolve complaints at the earliest possible stage

Access to FOS Within 8 weeks of the receipt of a complaint, or after it sends the complainant a final response (if this is earlier) a firm must; inform the eligible complainant that he may refer the complaint to the Financial Ombudsman Service (FOS) if he remains dissatisfied; inform the eligible complainant he is allowed to refer his complaint immediately to the FOS or within six months; and send the eligible complainant an explanatory leaflet about the FOS If still unable to respond within 8 weeks (all the above), plus give reasons for the further delay, indicating when it will provide a final response Complaints are indicators of areas of a firm's business that may not be operating satisfactorily for customers. Senior Management should ensure that the firm has a philosophy that sits alongside the principles of TCF and recognises that effective complaint handling is an integral part of TCF.

Appointed Representatives Not directly authorised by FCA Use permissions of their Principal to conduct regulated activities Recent FCA thematic review findings Significant shortcomings found in Principal firms understanding of regulatory obligations control and oversight of ARs regulated activities Over half Principal firms in sample unable to demonstrate effective risk management Action taken against 5 Principal firms Principals now high on FCA radar screen

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