On 5th April 2024 the Financial Conduct Authority (“FCA”) published some updates to its Perimeter Report. In this brief piece we summarise some notable takeaways that are likely to be of interest to our readers, but which have not been extensively covered elsewhere.

Marketing of CFDs and other high-risk derivatives

  • The FCA is aware that “some providers of retail derivatives (CFDs and futures) are encouraging retail clients to trade with firms in third country jurisdictions, by using comparison tables to highlight that retail consumers can get higher leverage through third country group entities.”
  • The regulator states that this type of behaviour “effectively circumvents” its permanent restrictions on leverage. Accordingly, firms in this space can expect this to be a continued area of focus.

Payments

  • FCA will publish a consultation paper on a new safeguarding regime for non-bank payment service providers later this year.
  • Key areas of focus:
    • firm failure;
    • improving resilience;
    • strengthening consumer protection; and
    • promoting competition.

The Senior Managers and Certification Regime (“SMCR”)

  • Will be extended to Recognised Investment Exchanges (“RIE”) and Credit Ratings Agencies (“CRAs”) following the enactment of the enactment of the Financial Services and Markets Act 2023 (“FSMA 2023”).
  • FSMA 2023 does not provide for the extension of the SMCR to payments and e-money firms. However, the FCA and the Treasury are currently considering whether to extend SMCR to these firms.
  • Otherwise, the effectiveness of the SMCR is currently being reviewed by the FCA, Prudential Regulation Authority (“PRA”) and the Treasury.

Oil and Energy Market Participants review

  • Neither the Government nor the FCA are planning to make any amendments to the special regimes applicable to Oil Market Participants (“OMPs”) and Energy Market Participants (“EMPs”).

Need help?

Please contact us if you have any questions about the topics covered in this circular.

Reference

  1. Our Perimeter Report. Financial Conduct Authority, available at: https://www.fca.org.uk/publications/annual-reports/perimeter-report#lf-chapter-id-wholesale-markets-senior-managers-and-certification-regime- (last accessed 9th May 2024).