The FCA has published its Annual Report and Accounts for the year ended 31 March 2019. Amongst their activities they highlight,
-Improving protection for users of high-cost credit- For example their work in introducing the Rent to Own cap.
-Regulating Claims Management Companies- Andrew Bailey (CEO) states “Around 36 million people received around 2.7 billion calls, texts or emails from CMC’s in the preceding year, so regulating this activity will have a significant impact. Between the start of January and the end of March, 953 of the 1,200 CMC firms in the market applied to us for temporary permission to operate, pending the full authorisations process. Those who have not done so can no longer offer these services.”
-Extension of the Senior Managers & Certification Regime to insurers- SMCR will be extended to Consumer Credit firms in December 2019.
-Financial Ombudsman(FOS) and SMEs- Since 1 April 2019, SMEs with annual turnover below £6.5m and either a balance sheet below £5m or fewer than 50 employees have been able to refer complaints to the Ombudsman. FCA also state that “The Senior Managers Regime has enhanced how we are able to hold senior management of banks to account for their conduct.”
-Vulnerable Customers- Identifying harm and the treatment of vulnerable customers continue to be major themes going forward.
-Enforcement- last year the FCA issued 265 Final Notices (243 against firms and 22 against individuals), leading to a grand total of 288 outcomes using its enforcement powers (276 regulatory/civil and 12 criminal) and imposed 16 financial penalties totalling £227.3million.
-Anti-Money Laundering- FCA demonstrated a case study from April 2019 as follows;
Standard Chartered Bank In April 2019
We fined Standard Chartered Bank (SCB) £102.2m for AML breaches in ‘higher risk’ areas of its business. This is the second largest financial penalty for AML controls failings we have ever imposed. We investigated the SCB’s UK Wholesale Bank Correspondent banking business and its United Arab Emirates (UAE) branches. We found serious and sustained shortcomings in SCB’s AML controls for customer due diligence and ongoing monitoring. SCB had failed to establish and maintain risk-sensitive policies and procedures, and failed to ensure its UAE branches applied UK equivalent AML and counter-terrorist financing controls. Under the Money Laundering Regulations 2007, SCB was required to establish and maintain appropriate and risk sensitive policies and procedures to reduce the risk of the bank being used to launder the proceeds of crime. In one instance, we found that an account had been opened with 3 million UAE Dirham in cash (approximately £500,000) in a suitcase with little evidence that the origin of the funds had been investigated. SCB also failed to collect sufficient information on a customer exporting a commercial product which could potentially have had a military application. This product was exported to over 75 countries, including 2 jurisdictions where armed conflict was taking place or was likely to be taking place. SCB agreed to accept our findings meaning that it qualified for a 30% discount, as otherwise a penalty of £145,947,500 could have been imposed. The US authorities have also taken action against SCB for significant violations of US Sanctions laws and regulations. We worked alongside international authorities during the investigation, such as US Department of Justice and US Office of Foreign Assets Control and acknowledged the help of the UAE Central Bank.