retail finance update seminar - eversheds sutherland...swift advances plc v okokenu • fixed sum...

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Retail Finance update seminar

May 2016

Eversheds LLP

−Pensions

−Financial Crime and Anti-Money Laundering

−Wholesale Financial Markets

−Advice

−Innovation and Technology

−Firms’ Culture and Governance

−Treatment of Existing Customers

FCA Priorities for 2016/17Introduction

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Complaint handling trends/case law update

May 2016

Chris Busby

Partner

Eversheds LLP

−PPI & Plevin - latest position and what to expect next

−Claims Management Regulation - major changes

−National Audit Office review of financial services mis-selling

−Holmcroft decision – judicial review of skilled persons

−Swift Advances case - s.140A Consumer Credit Act 1974

Coming upComplaint handling trends/case law update

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Eversheds LLP

A hive of activity but a lack of certaintyPPI & Plevin

Eversheds LLP

−Independent Review of Claims Management Regulation (March 2016)• There is a genuine need for CMCs• BUT poor value for money, misrepresentation, nuisance contact, pursue inappropriate

claims• CMRU (MoJ) has done a good job given resources and powers• Improve CMRU website• New robust re-authorisation process with fit and proper persons test• Personal accountability for rule breaches• Standard disclosure document with better signposting of alternative channels• Wider use of CMRU powers• FCA to take over regulatory responsibility

−Cap on fees for financial claims (consultation closed 11/4/16)• Bulk claims - 15%* of net amount awarded (if >£2,000) or

£300* (if <£2,000)• Non-bulk claims – 25%* of net amount awarded• Ban on up-front fees [* inclusive of VAT]

Biggest change since inceptionClaims Management Regulation

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Eversheds LLP

−FCA to develop further its strategic view of risks of mis-selling and its approach to tackling them−FCA to focus more on whether consumers understand what they are buying−FCA should try to measure whether its actions are reducing mis-selling−Better co-ordination between FOS & FCA−FCA & FOS to develop better measures of the quality of complaints handling−FCA & FOS to identify which types of redress routes are most successful−FOS should outline how it will clear the PPI backlog“Despite some signs of progress, the FCA therefore has further to go to demonstrate that it is achieving value for money.”

Key themes and findings

Financial services mis-selling – regulation and redress (February 2016)National Audit Office Report

Eversheds LLP

−“Public law could not impose duties which undermined the basis of the private contractual arrangements…There was no public law obligation to create an independent reviewer”

−“It does not guarantee a fair outcome in each and every case, but there is still availability of civil actions, or possibly recourse to the Ombudsman…”

−KPMG acted fairly in any event

High Court Judgment of Elias LJ and Mitting J, 24 February 2016:

Skilled person not amenable to judicial reviewHolmcroft Properties Limited, KPMG, the FCA & Barclays Bank

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Eversheds LLP

No unfair relationship under s140A Consumer Credit Act 1974Swift Advances plc v Okokenu

• Fixed sum loan secured on retirement flat, taken out in 2007, aged 70

• Unfairness alleged on basis unaffordable and required payments up to age 85

• “…the Defendant was a most unsatisfactory witness. I place no reliance on anything he said…”

• “Later changes of policy and perspective cannot render a relationship which was fair in 2007 and early 2008 unfair as at the date of trial.”

His Honour Judge Hand QC, Central London County Court, August 2015

Eversheds LLP | 10/05/2016 |

Any questions?

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eversheds.com©2015 Eversheds LLPEversheds LLP is a limited liability partnership

Chris Busby

Partner

+44 121 232 [email protected]

115 Colmore RowBirminghamB3 3AL

Unfair Terms: Europe and Current Thinking/Issues

May 2016

Geraint Thomas

Partner

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−Legislation

−ECJ Cases

−FOS

−Regulators

−Borrowers/CMCs

−Secondary markets

The Context


−Specified valid reasons – how specific must they be?

−Criteria in cases

−Product issues

−Mortgages and SVR

Specific Issues (1)

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−Indeterminate term agreements• ‘any other [valid] reasons’ catch all

−Product type approaches• savings/current accounts• cards

−Other products

Specific Issues (2)


−Awaiting domestic courts

−FCA position

−Legal counter-arguments

−Ombudsman cases

−Other issues• wider consumer rights context

Where are we now?

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−Jorge Sales Sinué v Caixabank (2016)

−Background

−Suspension of individual claims

−UK implications

Other ECJ Issues


Any questions?

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Geraint Thomas

Partner

+44 207 919 4500 [email protected]

One Wood StreetLondonEC2V 7WS

Payment Services Directive 2

May 2016

Richard Jones

Partner

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1. PSD2− Background and timelines− Approaches to PSD2− What can you be doing now?− New types of payment services− Security− Opportunities

What are we going to cover?

Payment Services Directive 2

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−Package of measures with aims to modernise European payments framework, regulate new innovative payment services, improve security, improve consumer protection and address legal uncertainty

−Published in the Official Journal of the EU on 23 December 2015

−Directive came into force on 12 January 2016

−Timeline for transposition

PSD2 – Background and timelines


−Do you fall within the scope of the regime?

−Compliance vs opportunities

−Differing approaches to addressing compliance with PSD2

PSD2 – Approaches to PSD2

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−Consider impact on products, operations and distribution

−Consider how to mobilise project

−Analyse system capabilities and consider whether changes are required

−Input into industry consultations

What can you be doing now?


−Two new types of payment services will be regulated:• Payment Initiation Services (PIS)• Account Information Services (AIS)

−Right for customers to use PIS/AIS

−Secure communication

−Ability to refuse access

−Refunds and division of liability

New types of payment servicesKey changes under PSD2

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−Management of operational risks

−Reporting requirements

−Strong customer authentication

Security and authenticationKey changes under PSD2


−EBA Regulatory Technical Standards

−Exemptions to strong customer authentication

−Timelines

Security and authenticationKey changes under PSD2

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−New types of payment services – AIS and PIS

−Open API standards

−Integration with Fintechs

−New products/ Improved Customer Experience

Opportunities


Any questions?

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Richard Jones

Partner


Eversheds House70 Great Bridgewater StManchesterM1 5ES

Payment Systems RegulatorAn update on recent developments

May 2016

Abby Green

Senior Associate

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Payment Systems RegulatorA quick recap and key developments


− Economic regulator for eight payment systems

− First and only dedicated regulator of payment systems globally

− Mission: to make sure payment systems work well for those who use them

−Three statutory objectives to promote:• competition• innovation• the interests of service-users

− Operational from 1 April 2015

The regulatory new kid on the block

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− New head of policy – Paul Smith

− Cards Programme of Work

− Payments Strategy Forum – set up, developing its strategy

− Industry code of conduct for indirect access

− Access and Governance report

− Flagship market reviews:• Infrastructure• Indirect Access

Key developments

Market Reviews on Infrastructure and Indirect AccessInterim reports

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− Concerns regarding common ownership within interbank payment systems

− Focus: Bacs, FPS and LINK and central infrastructure provider, VocaLink

− Provisional findings: competition not effective

− Three key reasons:• Lack of competitive procurement exercises• Current ownership arrangements• Interoperability – no internationally accepted messaging service

− Proposed measures: • Introduce competitive procurement• Potential divestment of shareholder PSPs’ interests in VocaLink• Phase in a common international messaging standard

Published 25 February 2016

Interim reportInfrastructure Market Review


− Aim to get a deeper understanding of the supply of indirect access − Focus: Bacs, CHAPs, C&CC, FPS and LINK− Provisional findings: competition generally working well to produce good outcomes for payment service providers (PSPs) and their customers− BUT some issues identified:

• Quality of service • Limited choice of providers - affects small indirect PSPs most• Barriers preventing indirect PSPs switching to alternative providers

− Proposed measures: none - PSR will keep market under review for 12 months

10 March 2016

Interim reportIndirect access market review

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What next?On the horizon for 2016/2017


− Monitoring access and governance directions (apply to interbank systems)

− Cards Programme – Phase 2 Interchange Fee Regulation guidance

− Market reviews – final reports - summer 2016

− Payments Strategy Forum – draft strategy – mid-July 2016

− Future EU Regulation – horizon scanning

− ‘Regulating for the future’

− Competition and regulatory enforcement cases …?

Looking forward – 2016/2017

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Any questions?


Abby Green

Senior Associate



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The Senior Managers and Certification RegimeThe legal function

May 2016

David Saunders

Partner


−New regime for the banking and insurance sectors (and for all sectors from March 2018)

−Senior Managers Regime

−Certification Regime

−Conduct Rules (FCA and PRA)

The Senior Managers and Certification Regime (SM&CR) - Overview

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SM&CR - Overview

Senior Management Functions

1. Responsibilities Map

2. Statements of Responsibility

3. Handover requirements for joiners and leavers

4. Duty of Responsibility

5. Fit and Proper Reviews by the firm

6. Approval by the regulators

7. Criminal Records checks and Regulatory References

Certification Regime

1. Fit and Proper Reviews by the firm

2. Regulatory References

3. Certification on an annual basis

Conduct Rules

5 Conduct Rules (applicable to all)4 Additional Conduct Rules (for SMFs)


−The current position:

−No specific senior management function or FCA/PRA prescribed responsibility

−The legal team does not feature on list of possible additional areas of responsibility set by regulators

−FCA acknowledged some “confusion” in industry as to whether GC/Head of Legal needs to be Senior Manager

−FCA will issue a consultation paper in the summer 2016

Does your GC/Head of Legal need to be a Senior Manager?

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−Legal function is an advisory function that supports the business−Not currently required under the Approved Persons Regime−Other aspects of the SM&CR catch the role of the GC (i.e. the Certification Regime and the material risk taker role) and the conduct rules which are applicable to all −Potential conflict with the right to receive impartial and independent legal advice−Potential conflict between legal privilege and the requirement for Senior Managers to make disclosures to the regulators under Senior Manager Conduct Rule 4

Potential issues


−A number of possible outcomes?• General Counsel/Heads of Legal not required to be a Senior Manager• A Senior Manager Function for the GC/Head of Legal• GC/Head of Legal required to take on the SMF 18 (Other Overall Responsibility Function)• A prescribed responsibility or business activity dedicated to the Legal function

−What responsibilities would be included?

Where will the legal function end up?

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Current Hot Topics which may cross your desk

Delegated Responsibilities

• Senior Manager remains accountable for their responsibilities

• Be judicious: exercise due and reasonable consideration before delegating

• Effective supervision: monitor delegates and receive regular progress updates

• Failure to deliver – impact on delegate’s appraisal / certification review

Conduct Rule Breaches

• Maintaining a register and notifications to the regulators

• Building into annual appraisal/ certification process

Whistleblowing

• Role of the champion

• Internal arrangements to facilitate whistleblowing

• Updating procedures / communications to employees explaining legal right to blow the whistle

• Annual report to the Board

Regulatory References

• Waiting final rules but regulators remain committed to the principle

• Key as part to the on boarding / due diligence for prospective new employees

Hot topics


Any questions?

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David Saunders

Partner



Coffee break

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Seeing clearlyMaking sense of Brexit

May 2016

Ros Kellaway

Partner

1. EU status quo

2. UK’s objectives

3. UK/EU new settlement

4. Mechanism for leaving the EU

5. Five post-Brexit UK/EU relationship models

6. Impact on retail finance

Agenda

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Rights Opt Out/Right to Join Obligations

Access to the EU InternalMarket – Four Freedoms

Schengen free-movement area

Abide by the provisions of EU law

Member of EU Customs Union Single currency – the UK has a perpetual opt-out

Abide by rulings of the EU courts

Representation in the European Council, European Parliament, Commission and EU courts

Various Justice and Home Affairs measures

EU has exclusivecompetencies relating to: Customs Union, EU competition law, monetary policy for the euro, Common Fisheries Policy and Common Commercial Policy

Receive funding from EU policies and programmes

EU Charter of Fundamental Rights?

Contribute to the EU budget – UK is currently a net-contributor

UK’s Rights and Obligations as an EU Member StateEU Status Quo (1)


−Number of shared competencies between EU and UK e.g. Common Agricultural Policy; Consumer Protection; Internal Market

−EU must comply with the EU principles of proportionality and subsidiarity

−Rights of national parliaments to critique, but not block, proposed legislation

−“Two-tier Union” – Eurozone members (19) can outvote non-Eurozone members (9) - distortion of Internal Market?

EU Status Quo (2)

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• Economic Governance: “...ensure we face neither discrimination nor additional costs from the integration of the Eurozone”

• Competitiveness: “…bring together all the different proposals, promises and agreements on the single market, on trade, and on cutting regulation into one clear commitment...”

• Sovereignty: “Europe where necessary, national where possible”• Immigration: “…we need to tackle abuses of the right to free movement and deliver

changes that ensure our welfare system isn’t an artificial draw for people to come to Britain”

UK’s Objectives


UK Objective Achieved? Comment

Economicgovernance

Yes UK businesses trading in the Internal Market cannot be discriminated against because the UK is outside the Eurozone

UK authorities responsible for supervising the UK’s financial stability

UK will not have to pay for Eurozone bail outs

Mechanism to give non-banking Union Member States the power to require the Council to “discuss” any contentious issues, but no UK veto on the effective management of the Banking Union or the future integration of the Eurozone

Competitiveness Yes Specific targets to reduce regulation in key sectors

New mechanism for Commission to propose repealing measures inconsistent with the subsidiarity and proportionality principles

“all efforts to strengthen the internal market” and to enter into free trade agreements with key economies

UK/EU New Settlement – If UK votes to stay (1)

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UK Objective Achieved? Comment

Sovereignty Yes References to “ever closer Union” will not apply to the UK

Recognised that UK not committed to further political integration into the EU

Red card system for new laws under shared EU/Member State competencies on grounds of subsidiarity - >55% of national parliaments’ votes in favour to veto new laws

EU will respect the UK’s ability to choose to participate in Justice and Home Affairs measures

Immigration Partial Emergency brake for 7 years to limit access to in-work benefits by newly arrived EU workers for up to 4 years

UK given guarantee that it will qualify for emergency brake if it votes to remain in the EU

Social benefit tourists can be refused right of residence

Child benefit can be index linked to the standard of living where child resides - applies automatically to new claims but will only apply to ongoing claims from 1 January 2020

UK/EU New Settlement – If UK votes to stay (2)


• UK notifies European Council

• UK/EU negotiate and conclude an agreement detailing the exit plan and new relationship

• The Treaties cease to apply to the UK from:• date the agreement comes into force; or• two years after the notification unless unanimously extended by the European Council

and UK

• Other alternatives?

Article 50 Treaty on the European Union

Mechanism for Leaving the EU

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Free movement of goods

Yes excluding certain

agricultural & fishery products

Varies by product based

on bilateralagreements

Yes YesYes subject

to WTO rules

Free movement of people

YesYes - foremployed persons

No Possible No

Free movement of services / establishment

Yes Yes – industry specific

No Possible No

EU representation

No but veto through EFTA

No No No No

EU budget Yes (reduced) Yes (reduced) No No No

Bound by EU/Third Country FTAs

No - can negotiate alone

or through EFTA

No - can negotiate alone or

through EFTA

Must apply EU’s common external tariff

to third countries

No No

Five Post-Brexit UK/EU Relationship Models

Impact on Retail Finance

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−In addition to Treaty rights on services and establishment, Single Financial Market directives provide a “passport”

−Effect of “passport”: authorisation in Home Member State gives firm the right to provide services / establish a branch in Host Member States without the need for further authorisation

−The Credit Requirements Directive governs the passport rights of a Credit Institution, i.e. a bank

−There are no single financial market directives providing for passporting for non-bank lenders (other than investment firms or funds)

Lending and Other Financial Services: A Special Case?


Banks

−On Brexit, the UK would cease to be a Home Member State so authorisation in a new Home Member State will be required from which to passport

Non-Banks

−No passporting available anyway

−Still have to comply with EU rules to provide services within the EU

Impact for UK Lenders doing Business in the EU

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Any questions?


Ros Kellaway

Partner



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VulnerabilityDirection of Travel

May 2016

Clive Summers

Regulatory Director


−Regulatory developments

−Has the definition of vulnerability changed?

−New thoughts from the EU and Industry bodies

−Expected actions

−Data Protection and Explicit Consent

To cover

Compliance Best Practice

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−EU Paper: “Consumer Vulnerability across key markets in the European Union”• Published January 2016

−BBA: “Improving Outcomes for Customers in Vulnerable Circumstances”• Published February 2016

−FCA: “Ageing Population and Financial Services” DP 16/1 • Published February 2016

−FCA & HMT: “Financial Advice Market Review”• Published March 2016

−MALG: “Best practice in the use of ‘flags’ to be placed on the accounts/case files of individuals in vulnerable circumstances who are unable to manage money”

• Published March 2016

What has been published since FCA’s Occasional Paper 8?Regulatory developments

Customer Vulnerability


−“A vulnerable customer is someone, who due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.

[FCA Occasional Paper 8: February 2015]

−Essentially this hasn’t changed but re-stated by the EU that:• Definitions focusing on personal characteristics of the consumer.• Broader definitions taking into account the overall situation in which the consumers find

themselves.

Has it changed?Definition of Vulnerability


the same but expectation of firms has increased…

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−Define vulnerability to avoid misunderstanding and misalignment

−Consider a broader spectrum for vulnerability

−Assess the practicalities of having a form of scorecard in place

−Understand the ‘drivers’ of vulnerability

Recommendations (for Member States)EU Recommendations



−Three FLAGS:

−Vulnerable

−Vulnerable MH – Mental health issues

−Vulnerable NEC – Where customer has declined to give consent to hold data

Key recommendationMoney Advice Liaison Group: FLAGS


internal only…

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−Sensitive, flexible response

−Effective access to support

−One-stop notice

−Specialist help available

−Easy for family and friends to support

−Scam protection

−Customer focused reviews

−Industry alignment

−Inclusive regulation

RecommendationsBritish Banking Association



−Financial capability skills

−Mental health issues

−Physical and long term health issues

−Low income and/or debt problems

−Age – old and young

−Lack of English

−Change in circumstances

−Can be temporary

A reminder……What is Vulnerability?Linking Vulnerability to the Conduct Risk Agenda


not a point in time…

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What do FCA expect? (1)


Culture

Strategy

Policies and Procedures

Communication

Remuneration

Encourages the fair treatment and respect of customers who find themselves in a vulnerable position

Does not deviate from the need to robustly manage situations relating to vulnerability

Appropriate for customers who are vulnerable and generally communication is understandable

Clearly defined expectations and operation procedures in respect of responding to vulnerability

Clearly defines vulnerability in relation to the business model and products / services offered


What do FCA expect? (2)


Sales Practices

Dealing with

Financial Difficulty

Staff Training

Monitoring

Sales practices do not encourage ‘negative’ behaviours

Forbearance and other measures are well thought out and appropriate and flexible outcomes

Specialist training for departments such as collections, arrears management and complaints

Monitoring actively seeks to identify instances of poor outcomes for vulnerable customers

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−Vulnerability covers a spectrum of circumstances

−Strict T&Cs can be challenged

−Vulnerability is a spectrum which can vary in a lifetime

−Vulnerability should not solely be identified at the complaints stage

−Even if a firm did not appropriately identify vulnerability, their subsequent response can be the fail safe position

What do the recent FOS findings tell us?

FOS: Key factors when assessing customer vulnerability



− Define vulnerability

− Policies and procedures

− Provide regular training: internal procedures and awareness training

− Empower staff to raise issues to the next level of management

− Consider systems enhancements

What should a firm be doing to manage vulnerability?

What should be in place?


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− Identify the type of vulnerability – transient or part of the customer ‘make up’

− Consider if the vulnerability could have been identified prior to the complaint stage

− Consider whether the firm has previously sought to manage the situation

− Be sure to ascertain ‘true vulnerability’

Key steps to take:

What to do when vulnerability is identified



−It is reasonable to ask for evidence of vulnerability? For example, in the case of bereavement or health problems

• apply reasonableness to the request

−Consider customer interaction in the past

−Gathering information vs. invasion of privacy

Each situation has to be viewed on its merits/particular circumstances:

Can you ask for evidence of vulnerability?


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− Vulnerability is not a ‘point in time’

− Appropriate response to appropriate situation

− Training and guidance for staff

− Root Cause Analysis where things go wrong is crucial

− Don’t always take things at ‘face value’

− Be fair, consistent but flexible

Nothing has essentially changed but expectations have increased:

In summary



Any questions?

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Clive Summers

Regulatory Director

+44 207 919 0782 [email protected]


Compliance Best PracticeBuilding a robust framework

May 2016

Simon Collins

Managing Director

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− Rules based

− Approvals based

− End of career role

− Tick box approach

− Separate to the operational core of the business

The past….

Have we evolved?Evolution of Compliance


• ……………………………….The Ivory Tower


− In depth appreciation of regulatory rules, guidance andexpectations

− An understanding of commercial and reputationalimperatives

− Risk management skills

− Provision of guidance… consequences

− Forward thinking

− Pragmatic

What good looks like… What does it involve?21st Century Compliance


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− The team

• A balance of skills in line with the business model• Succession planning• Soft skills

− The role

• Advisor• Risk • Tenacious• Pragmatic

− The structure

• Advice• Monitoring • Risk Management• Communication, awareness and education

What good looks like… The building blocksBest Practice



What good looks like…..The frameworkBest Practice


•Ongoing business support for operational changesTraining / Awareness

• Assist in the building of operational controls which include compliance measures

•2nd Line monitoring, reporting and close out

•Reporting of risks to relevant Boards and Committees –oversight of risk mitigation

• Help build the tactics to compliantly achieve the strategy with good customer outcomes

•Assist in the buildingof 1st line controls

• Contribute to the strategic direction so that good customer outcomes are achieved as well as commercial and reputational imperatives

Strategic advice and

input

Tactical Business Advice

SupportRisk and Monitoring

Managem

ent Information

Training and Com

munication

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What good looks like…core elements of a compliance infrastructureBest Practice


Governance

• Define risk appetite

• Define risk management framework

• Define roles of risk and controls

• Define RCA protocols for the business

• Access to the Board and NEDs

• Reporting to the relevant risk committee

• Set a TCF / consumer outcomes mission

• Horizon scanning

Systems and Controls

• Risk Register (Inc. conduct risks)

• Obligations register

• Monitoring / Controls programme

• Operational quality controls

• Compliance 2nd line controls

• Reporting mechanisms

• Tolerance and parameter setting

• Concise, clear and signpostedcompliance manual/procedures


−An approach which is embedded in all levels of a business with oversight and risk management.

−Independent

−Consistent

−Embedded

−Controlled

SummaryBest Practice


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Any questions?


Simon Collins

Managing Director



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Call for Input: Review of retained provisions of the Consumer Credit Act

May 2016

Jo Owens

Principal Associate

Call for InputWhat is it?

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−FCA required to undertake a review and to report to HM Treasury by 1 April 2019• Part 5 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment)

Order 2014

−82 CCA provisions repealed as part of the OFT to FCA transfer

−167 retained provisions of the CCA to be reviewed together with associated regulations

−FCA could make recommendations for legislative change

−FCA’s aims include:• simplify the regime “where possible”• preference is to have a flexible rules-based framework – makes change easier• to modernise the regime – is it fit for purpose?• strike a balance between disproportionate burdens on business and appropriate degree of

consumer protection (burden proportionate to benefit?)• balance between high standards of conduct and innovation/creativity• what should the FCA modify, update, replace or remove?

What is the Call for Input?


−FCA seeking to scope the review at this stage

−responses due by 18 May 2016

−8 questions set out in the document:• scope of the review:

• what should it be? • should it include all of the retained provisions?

• what should be included/excluded and why?• what should be the main priority of the review?• should the review extend more broadly?• what should the timescales be?• should certain provisions be considered earlier? Why?• how should the FCA engage with stakeholders?• how should the FCA conduct the review?

What is the Call for Input?

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Call for InputScope of the review


− a “major review”

−retained in April 2014 because:• conferred specific rights or obligations on consumer or third parties (e.g. s75)• derive from the Consumer Credit Directive (e.g. withdrawal)• provide for specific sanctions on the lender/owner• provide that contravention is a criminal offence or involve a role of the courts• FCA’s rule making powers do not permit the imposition of rules on consumers or unauthorised persons and FCA

range of sanctions is different

−complex consumer credit regime:• CCA and associated regulations• FSMA 2000 and associated orders• FCA Handbook • codes and good practice guidance• imbalance with other regimes – MCOB, insurance?

−what should the FCA focus on?• benefit to consumer versus burden on firms (multiple agreements, modifying agreements)?• complex (multiple agreements, modifying agreements)?• limited flexibility to change so leave “as is” (CCD requirements)?• extend beyond to other matters relevant to or connected with the retained provisions?

− is the overall aim substance over form?

Scope of the Call for Input

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−considering focusing on particular retained provisions rather than reviewing all

−not yet decided which provisions should be reviewed or the priority to determine these

−not intending to extend the scope of the review beyond the retained provisions unless “substantial interactions”

−FCA could recommend earlier changes to Treasury – seeking views

−FCA proposing to conduct the review in-house – may seek external help

−FCA proposing to establish an expert stakeholder consultative group

FCA’s current thinking

Call for InputOur thoughts

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−substance over form

−address complexity – have a single point of reference?

−start the review now – legislative change can take years!

−staged review with priorities based on:• unfair burden and no consumer benefit• “quick wins” – could transfer to CONC without difficulties• smarter communications and innovation

−the usual suspects • multiple agreements• modifying agreements• consequences of improper execution (ss65 and 127(3) CCA) • voluntary termination• some terms from Part 2 of the CCA already defined in the RAO

−variations – s78A and 82(1)• deal with as rules and guidance?• some provisions already set out in CONC 6

Our thoughts


−challenges for digital agenda• form of consent required by section 176A• challenges of what is meant by “transmission”?• need to “future proof” regime to keep up with innovation

−unenforceability or a private right of redress?• SECCI, statements, NoSiAs and NoDs and copy agreements requirements• risk of error great, sanctions are draconian yet often no consumer detriment• increase in litigation/CMCs

−form and content of statements and notices • too prescriptive – constrain innovation and the digital agenda• smarter communications?• information overload?

−the hire regime• complex and inflexible• draconian• challenges of digitisation

−joint customers s185 – little flexibility?−business to business lending

Our thoughts

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Call for InputNext steps


−responses due by 18 May 2016

−send responses to FCA by:• online form• email to [email protected]• or post to Charlie Gluckman, CCA Review, Strategy & Competition Division

−over the next few months FCA will:• consider all responses• finalise the scope of the review• establish the consultative stakeholder group• publish an update on progress by Q4 2016

Next steps

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Any questions?


Jo Owens

Principal Associate



retail finance update seminar - eversheds sutherland...swift advances plc v okokenu • fixed sum...

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