Member Update 8th March 19
Written on 07/03/2019

Test Question

At what level of income does a tax charge “kick in” for those in receipt of Child benefit?

a)  £45,000

b)  £50,000

c)  £55,000

d)  £60,000

answer is b

FCA introduces Hire-Purchase price cap

FCA as price regulator in consumer credit market

On 5 March 2019, the FCA published a policy statement (PS19/6) to introduce a price cap to protect customers in the rent-to-own (RTO) sector.

FCA wants to bring down prices on RTO agreements where the overall costs to consumers are high compared to other retailers' prices. The price cap is designed to do this by:

  • Setting a total credit cap of 100% and 
  • Firms must benchmark product base prices against retail prices.

The final rules are in a new chapter 5B in the Consumer Credit sourcebook (CONC). 

The rules will come into force on 1 April 2019 and will apply immediately to any new products RTO firms introduce to the market for the first time. For products that RTO firms are already offering, the rules will apply in full from 1 October 2019.

If you’ve got a car on HP – alongside the other 88% who buy new cars that way, then you’ve got a chance to check your terms and see if you are going to get overcharged.

On the other hand, consumer credit firms need to take great care with serial non payers who can no longer be penalised financially.

Ethics in Banking and Finance.

I was taught my ethics – and continue to work on them daily - in family, school, church and business.  

I hope it is the same for you too.

But in the New World Order post credit crunch 2008, FCA are driving for higher standards.  The Lawyers Linklaters have published a 78 page document to help firms outline their culture to their stakeholders, employees and the Regulator. 

There mere thought of a 78 page document on ethics is alarming.  But you need to know that it is there, and is published, and that this is where we are in financial services today.  If you are the principal of a multi RI firm, then you need to flick through the document to see just what’s coming towards you from 12 Endeavour Square.

Click here to find it.

For CEOs employing staff, make sure you bank it as CPD and save it on your file and implement as appropriate. 

Mifid clarity in recent Mifid II disclosure review

FCA has brought “clarity on Mifid disclosure”  

And here is what followed – 

The costs and charges disclosure requirements in MiFID II requires firms to produce the standardised Key Information Documents (KID). 

Conversely, Undertakings for Collective Investment in Transferable Securities (UCITS) manufacturers will continue to produce a Key Investor Information Document (UCITS KIID). 

So there you have it.  KID or KIID – take your pick.

As the FCA go on to say:

“The interaction… is not seamless and we know that customers value clarity as much transparency. “

IFAC interpretation:  

Insurance Bonds require KID doc disclosure

OEICS need KIID doc dislosure.

“Firms should be particularly alert to the need to disclose all ‘transaction’ and ‘incidental’ costs and charges to customers.”


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