Global Trustee and Fiduciary Services Bite-Sized Issue 10 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 10 | 2023 14 QUICK LINKS CBDC DIVERSITY & INCLUSION FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE SUSTAINABLEFINANCE/ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM UNITED KINGDOM FCA Platforms Portfolio Supervision Strategy Letter On 28 September 2023 the Financial Conduct Authority (FCA) published a Dear CEO letter addressed to firms in its Platforms portfolio, providing an update of the FCA’s view of the key harms in this sector, the FCA’s expectations and a summary of the work it intends to do. The FCA’s expectations include: • Wanting Platform firms to help consumers invest with confidence, understand the risks they are taking, and the regulatory protections provided. • Expecting Platform firms to consider how the economic environment, including rising interest rates, could impact the outcomes consumers get from their services. • Expecting Platform firms to consider whether their service is contributing to the key outcomes sought by the FCA strategy. • Expecting Platform firms to have implemented the Consumer Duty by now and have embeded this fully across their businesses. • Expecting good governance, including: – Governing bodies being composed of members with diverse thoughts and expertise. – They should have appropriate independent representation, receive timely and appropriate management information about risks, and effectively and rigorously oversee issues within the firm. – The FCA also expects a strong commitment to ensuring a culture that roots out and takes strong action in relation to inappropriate conduct at all levels, including bullying, abusive language and behaviour, discrimination and any other non-financial misconduct. The FCA states that it expects all firms within the Platforms portfolio to meet its requirements including the obligations and expectations set out in the letter, and to take all necessary actions to ensure these are met . Link to the Dear CEP Letter here Financial Promotions for High-risk Investments On 27 September 2023 the FCA published the findings of its multi-firm review of how firms offering restricted mass market investments (RMMIs) have complied with new rules on the customer journey. The FCA identifies examples of good and poor practice for the wider sector to consider and make any necessary changes to their own practices. In August 2022, the FCA published PS22/10 – Strengthening our financial promotion rules, which outlined new requirements for firms promoting high-risk investments (HRIs) to retail clients. The initial rules, requiring risk warnings on financial promotions, went live on 1 December 2022 and the remaining rules on 1 February 2023. The FCA reviewed the approach of a sample of 13 firms to each of the conditions set out in COBS 4.12A: • Incentives to invest; • Cooling off period; • Risk warnings; • Client categorisation; and • Appropriateness.