Author: Russell J Kelsall

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FCA sets up an implementation group to help the mortgage industry deal with proposed new rules for ‘mortgage prisoners’

On 27 August 2019, the UK Financial Conduct Authority set up a working group to help the mortgage industry deal with the implementation of its proposed new rules, set out in consultation paper 19/14, to deal with so-called ‘mortgage prisoners’.

The FCA has published a website (which it will update) summarising the discussions with the working group.

The current members of the group are:

– Building Societies Association
– UK Finance
– Ipswich Building Society
– Buckinghamshire Building Society
– Furness Building Society
– Tipton and Coseley Building Society
– West Bromwich Building Society
– OneSavings Bank
– UK Asset Resolution Ltd.
– Leeds Building Society
– Kensington Mortgages
– Yorkshire Building Society
– Link Asset Services
– Mortgages Plc

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European Payments Council publishes a press release about the impact of a “no-deal” Brexit on payments from customers based in the EU

On 2 September 2019, the European Payments Council published a press release on the operational impacts of a “no deal” Brexit on credit transfers and direct debits from the Single Euro Payments Area.

The European Payments Council sets out steps which should be taken to prepare for a “no deal” Brexit. Firms should consider these steps as a matter of urgency.

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Law Commission publishes its report on the electronic execution of documents

On 4 September 2019, the Law Commission published a webpage summarising its findings following its report into the electronic execution of documents. The webpage includes a very useful summary of the law. This broadly says that electronic signatures are generally (except for some exceptions) lawful and do not need to be signed in a particular way. But there are more complications for deeds which must be signed in the presence of the witness.

The Law Commission has recommended setting up a working party to consider some practical solutions (for example, video witnessing of deeds) and a further review of the law on deeds.

You can download:

– the summary paper by clicking here; or

– the full report by clicking here.

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FCA publishes research paper on measuring culture

On 4 September 2019, the UK Financial Conduct Authority published a webpage on ‘measuring culture’. This has always been considered to be a difficult topic to measure. But now three researchers at the London School of Economics have published their research suggesting how it can be measured.

The insight raises some interesting thoughts. It is important to remember that it has been published on the FCA’s website. Given culture is so important to the FCA, it’s therefore very likely the FCA will expect firms to give consideration to the researchers’ views and whether firms can manage and measure culture in their businesses.

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Banking Standards Board publishes its finalised version of its statement of good practice on the certificate regime and regulatory references under SMCR

On 3 September 2019, the Banking Standards Board published the final version of its statement of good practice on the certification regime and regulatory references under the Senior Managers and Certification Regime.

This statement provides some very useful guidance on the certification regime and regulatory references (including the thorny issue of what the reference must include).

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Updated practice note on the meaning of “credit” in consumer credit law

We’ve recently updated a practice note, published by Practical Law and written by Russell Kelsall and Alanna Tregear, entitled: ‘What is the meaning of credit under the UK consumer credit regime?’. We’ve updated it to consider the High Court’s recent decision in CFL Finance Limited v Bass & Others [2019] EWHC 1839 (Ch).

If you’re a subscriber to Practical Law, you can visit the practice note by clicking here or by visiting: https://uk.practicallaw.thomsonreuters.com/w-005-5092.

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FCA publishes final rules on extension of SMCR to FCA solo-regulated firms and new financial services directory

On 26 July 2019, the UK Financial Conduct Authority published a policy statement, PS19/20, setting out its final rules and guidance on:

– the extension of the Senior Managers & Certification Regime to FCA solo-regulated firms and a new directory; and

– a new directory of individuals working in financial services.

For in-house lawyers, and importantly, a Head of Legal is excluded from the requirement to be approved as a Senior Manager.

The new SMCR rules come into force on 9 December 2019.

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Cycle insurance provider gives undertaking to the FCA on the fairness of a term

On 26 June 2019, the UK Financial Conduct Authority published an undertaking given by ETA Services Limited about the fairness of a term in its cycle insurance policy. The undertaking was given under the Consumer Rights Act 2015.

The FCA’s concern was over the transparency of a term allowing ETA Services Limited to reject a claim if a bicycle had not been secured using an approved lock. This term appeared to conflict with another term saying a claim would be rejected if the bicycle had been left in a communal building and not secured to an immovable object (so no mention of an approved lock).

ETA Services Limited told the FCA that since 1 April 2019, the terms had been revised so that, to be covered, a bicycle needed to be secured using an approved lock when left in communal buildings. ETA Services Limited, and the insurer, also assured the FCA that redress had been paid to consumers who had claims rejected because they did not use an approved lock in communal areas.

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HM Treasury publishes response to breathing space scheme framework

In June 2019, HM Treasury published its response to the breathing space proposal.

Under the proposal, an individual will be eligible if:

– they’ve accessed debt advice;

– they’ve been assessed as being in ‘problem debt’ by a debt adviser; and

– they’ve not entered into ‘breathing space’ within the last twelve months.

Borrowers must continue to be eligible during the breathing space; this will involve a 30 day check.

The proposed definition of ‘problem debt’ includes a borrower who is having difficulty paying their debt and has sufficient difficulty that they stand a realistic chance of entering into a debt solution (for example, a debt management plan).

There will be no right for a lender to challenge whether a borrower is eligible.

The scheme will be administered using a portal (which will tell lenders when a borrower has entered, and left, a breathing space). The register will, however, be private: lenders will only be able to check other debtors.

For the period of the breathing space, a lender will not be entitled to charge interest, fees and charges. Lenders will also not be entitled to start court proceedings. And enforcement of judgments will also be paused during the breathing space.

The period for breathing space will be 60 days.

HM Treasury proposes to publish drafting regulations by the end of 2019 with a go-live date of early 2021.