Information for all firms

Attempted fraud against brokers

Two firms have recently been targeted and had fraudulent cheques presented against their client money accounts. One intermediary is based in Scotland and the other is in England. The accounts were held at two different banks. In one case the bank picked up the fraudulent activity before the cheques were cashed and the matter is being dealt with by their fraud department. In this particular case, attempts to cash the cheques were made at branches remote from the 'home' branch.

In both cases the cheque numbers were out of sequence but matched cheque numbers that had been issued to the firms but were a long way ahead of the numbers currently in use.

One firm now no longer writes cheques on that account and all payments are by CHAPs or BACS and the bank is under strict instructions not to cash cheques.

All intermediaries that operate this type of account may wish to review their procedures in the light of the above developments.

Staying up-to-date

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Financial Advisers/Investment Managers and Stockbrokers (Retail and Wholesale)

Redress for Arch cru investors

We have published a consultation (CP12/9) about establishing a redress scheme for customers who invested in the CF Arch cru Investment and Diversified funds. The proposed scheme will require all firms that have made a personal recommendation to invest in the Arch cru funds, to contact their customers who invested within four weeks of rules being made; indicating whether or not their case falls within the scope of the scheme.

Exchange Traded Products (ETPs) factsheet

We have published a factsheet on ETPs for firms or advisers who either currently include or are considering including ETPs as part of their advice offering. It explains:

• key features of ETPs and the differences between them;
• investment strategies used to generate a return, and the risks these strategies pose to investors;
• transactions which the fund enters into with third parties to improve the investment return, including where this involves collateral;
• mechanisms by which they are traded and the risks that investors face when trading; and
• the potential for conflicts of interest in their structures.

Factsheet

Traded Life Policy Investments (TLPIs)

In November 2011, we published guidance for consultation strongly recommending that TLPIs should not reach the vast majority of retail clients in the UK. We have now published finalised guidance, along with a summary of the feedback received.

The guidance is an interim measure – we will shortly be consulting on new rules imposing significant restrictions on the promotion of non-mainstream investments, including TLPIs, to retail investors.

Our finalised guidance asks firms to:

• consider the significant risks of TLPIs and be aware that they should not be promoted to UK retail investors;
• conduct extensive research and be able to provide robust justification in the unlikely event they think TLPIs might be suitable for a particular retail investor;
• not recommend products they do not fully understand; and
• take appropriate action if they identify problems or compliance failures - for example reviewing their files to see if any of their customers may have suffered detriment.

Pension Transfer Value Analysis Assumptions

We have published our policy statement (PS12/8) on pension transfer value analysis assumptions, which provides feedback on the responses we received to the proposals outlined in consultation paper (CP12/4). The final rules and guidance on the way pension transfer analysis is carried out l come into force on 1 May.

The changes are designed to deal with our concern that in most cases a pension transfer is not in the best interest of pension scheme members.
Pension Transfer

Consumer information about the changes RDR will bring

We have produced a guide to inform consumers of the changes RDR will bring - it is aimed at those who already get financial advice.

The aim is for firms and advisers to give the guide to their clients, it can be used as part of their discussions when explaining the changes – either by directing clients to the FSA website or by printing copies for their clients. Organisations that have direct contact with consumers will also play a key part in distributing the guide.

This is the start of our RDR consumer awareness campaign. We plan to roll out more activity from the second half of this year. We will continue to consult with consumer groups, trade associations and the accredited bodies about the best way to communicate the changes to consumers.
Consumer Guide

RDR guide ‘Is your firm on track?’

We have published a guide to help you implement the RDR requirements. It asks some key questions you can use to check progress, identify any gaps, and plan next steps.

RDR newsletter

The recent newsletter covers our findings on readiness, highlights our guidance on the treatment of legacy assets and on assessing suitability: replacement business and centralised investment propositions.

To keep up to date with the RDR, subscribing to our newsletter is recommended. To do this, please email firmcommunications@fsa.gov.uk.

Qualification gap-fill

Advisers who already hold qualifications published in our Handbook can use qualification gap-fill to meet the RDR examination standards. As gap-filling will be different for every adviser you may wish to consider the following points. You can read our one minute guide and factsheet for other areas of the professionalism requirements.

Insurance intermediaries

Smaller wholesale insurance intermediaries newsletter

We have published our latest edition of the smaller wholesale insurance intermediaries newsletter which includes an update on the gender directive, gender diversity, tracing employers' liability insurance and regulatory reporting.
Newsletter

Payment Protection Insurance (PPI) redress reaches £3bn

Redress paid to customers who complained about the sale of PPI has now reached £3bn. The total redress made to consumers covers payouts since the beginning of 2011. We collected data from 24 firms who accounted for 96% of all PPI complaints received in 2011.