Update on FCA activity
It is set to be another busy year for the regulator and the market, as several current thematic reviews are due to be finalised and consulted on.
The FCA’s work on creditworthiness and affordability will lead to a consultation in either Q2 or Q3 2016, the results of which could lead to new or redrafted rules and guidance, potentially affecting the point of sale process in dealerships.
The FCA is currently carrying out visits and analysis for its staff remuneration and incentives thematic review, assessing the prevalence and impact of high-risk incentive schemes. It will conclude by Q2 2016 informing of whether any further action needs to be taken. We understand that the FCA is broadening its focus on in-house incentive schemes to also look at commission structures between lenders, brokers and dealers.
The broker market remains an area of focus following new rules introduced this time last year. The FCA have commissioned further research on the broker market, which aims to improve its understanding of models and markets, covering remuneration and fee structures. The work might lead to a consultation on new rules in Q3 2016.
The FCA is also consulting on whether credit free of interest and charges requires a representative example for financial promotions (i.e. in advertising).