The FCA’s review was initiated amid concerns that competition in this market may not be functioning effectively and that some customers, particularly those in financially vulnerable circumstances may not consistently receive fair value. The Final Report sets out the FCA’s conclusions following its interim findings, supervisory engagement, and market analysis. 

Key Findings 

• Market Context and Consumer Importance 

In 2023, 48% of motor and home insurance policies were financed through instalments. While premium finance enhances access to insurance, interest charges mean some consumers pay significantly more. 

• Fair Value and Consumer Duty Considerations 

The FCA assessed whether costs were reasonable under the Consumer Duty. Average APRs dropped from 23.3% in 2022 to 19.2% in 2026, saving consumers an estimated £157 million annually, partly due to supervisory engagement and firms adjusting pricing models. 

• Pricing Models and Market Structure 

Both interest-bearing and 0% APR models can deliver fair outcomes if designed transparently and competitively. No market-wide APR caps were deemed necessary. 

• Commission Arrangements and Distribution Dynamics 

Broker-distributed products generally have higher APRs. Commission arrangements may pose conflicts of interest, but the FCA found no systemic harm. Firms must ensure commissions align with fair value delivery. 

• Supervisory Approach and Ongoing Monitoring 

The FCA will continue monitoring pricing, APRs, and distribution practices. Firms must ensure offerings remain compliant and defensible under the Consumer Duty. 

Implications for Firms 

For insurers, lenders, and brokers, the Final Report reinforces several core compliance expectations: 

First, firms must maintain robust fair value assessments, supported by data and documented governance. Pricing decisions should be clearly justified, particularly where APRs materially exceed market averages. 

Second, distribution oversight remains critical. Firms must understand how premium finance products are offered across channels and ensure that broker relationships and commission models do not distort outcomes. 

Third, firms should enhance monitoring frameworks to track customer impact metrics, vulnerability indicators, and APR dispersion across cohorts. 

Finally, boards and senior management should ensure that premium finance is embedded within Consumer Duty governance structures, with appropriate reporting and challenge mechanisms. 

Conclusion 

The FCA’s Premium Finance Market Study underscores the regulator’s continued focus on pricing fairness, transparency, and consumer outcomes within the insurance sector. While the FCA has not imposed new market-wide interventions, it has signalled clearly that premium finance pricing must withstand scrutiny under the Consumer Duty. 

For firms, the message is unequivocal: premium finance remains permissible and valuable, but pricing strategies, commission structures, and governance frameworks must demonstrably align with fair value principles. Ongoing monitoring and proactive compliance engagement will be essential to mitigate regulatory risk in this evolving area. 

How Complyport Can Help? 

At Complyport, we help firms manage evolving regulatory reporting requirements by: 

1. Regulatory Engagement and Supervisory Readiness: We help firms prepare board briefings, regulatory submissions and responses to FCA engagement exercises. Our guidance ensures firms can demonstrate proactive oversight, fair value assessments, and alignment with Consumer Duty requirements. 
2. Consumer Duty and Fair Value Frameworks: We assist in embedding fair value principles into pricing, distribution, and commission arrangements. This includes documenting governance, monitoring outcomes, and ensuring senior management accountability across all premium finance products. 
3. Monitoring, Reporting, and Risk Oversight: We help firms implement robust monitoring frameworks to track APRs, customer outcomes, vulnerability indicators, and broker practices. Our tools ensure clear reporting to boards and regulators, evidencing defensible and compliant premium finance offerings 

Contact Us 

To understand how the FCA’s AI review may affect your business, arrange a meeting with one of our compliance experts. 

Ask ViCA, your Virtual Compliance Assistant. Claim your complimentary 20 queries today! Register here: https://vica.chat  

The post FCA Premium Finance Market Study (MS24/2) – Final Report first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

The Financial Conduct Authority’s (FCA) Consultation Paper, CP24/28, outlines proposed changes to the regulatory framework governing how firms report operational incidents and manage third-party arrangements. Introducing this Consultation Paper and the subsequent Policy Statement is a result of the FCA identifying that some firms are unclear on how and when to inform the authority about operational incident. The aim is to enhance the FCA’s ability to oversee and respond to these critical aspects of financial operations.

Purpose

The primary goal of the proposals in CP24/28 is to provide the FCA with a clearer and more structured understanding of firms’ relationships with important third-party suppliers.

The proposed rules will apply to a broad range of regulated entities, including:

• Banks,
• Investment firms, and
• Payment service providers.

This wide applicability ensures that the entire financial sector benefits from improved reporting and oversight practices, enhancing overall operational resilience.

Reporting Requirements

FCA Reporting Requirements:

• Under Principle 11 of the FCA’s Principles for Businesses, firms are required to deal with the FCA in an open and cooperative way and to disclose to the FCA appropriately anything relating to the firm of which the FCA would reasonably expect notice. This includes material operational incidents.
• SUP 15.3 of the FCA Handbook provides additional rules and guidance on when the FCA would expect notice of matters relating to a firm. An incident may be considered material if it results in significant data loss, unavailability or control of IT systems, affects a large number of customers, or results in unauthorised access to information systems.

PRA Reporting Requirements:

• According to the Prudential Regulation Authority’s (PRA) general notification rules, firms are required to notify the PRA where an incident could lead to the firm failing to satisfy one or more of the threshold conditions, could have a significant adverse impact on the firm’s reputation, could impact the firm’s ability to continue to provide adequate services to its customers, or could result in serious financial consequences to the UK’s wider financial sector or to other firms (PRA Rulebook, Notifications Part, Rule 2.1).

 Operational Incident Reporting

One of the key proposals in the Consultation Paper is the introduction of standardised rules for reporting operational incidents including a clear definition of what constitutes an operational incident and a clear process and format for reporting such incidents.

Third Party Reporting

The Consultation Paper also proposes new requirements for firms to report on their material third-party arrangements. This includes expectations for governance and oversight by Senior Management and board members. By ensuring that firms have strong oversight of their third-party relationships, the FCA aims to mitigate risks associated with outsourcing and other third-party dependencies.

Consequences of Failing to Report

In summary, firms regulated by the FCA and PRA must report material operational resilience incidents, and failure to do so can result in significant regulatory and reputational consequences. It is essential for firms to have robust processes in place to identify and report such incidents in a timely manner.

Failing to report operational resilience incidents to the FCA or the PRA can lead to:

Regulatory Action:

• The FCA and PRA have the authority to take enforcement action against firms that fail to comply with their reporting obligations. This can include fines, public censure or other disciplinary actions.

Reputational Damage:

• Non-compliance with reporting requirements can lead to reputational damage for the firm, as it may be perceived as lacking transparency or failing to manage operational risks effectively.

Increased Scrutiny:

• Firms that fail to report incidents may be subject to increased scrutiny from regulators, which can lead to more frequent inspections and a higher regulatory burden.

Impact on Authorisation:

• For severe breaches, the failure to report could impact a firm’s ability to maintain its authorisation to operate, as it may be seen as not meeting the threshold conditions required by the regulators.

Looking ahead and the 2025 Operational Resilience Deadline

The consultation period for CP24/28 is open until March 13, 2025. During this period, stakeholders are encouraged to provide feedback on the proposals.

Additionally, firms should complete their preparations before the Operational Resilience Policy (PS21/3) transition period ends on 31 March 2025. This includes reviewing and possibly strengthening current operational incident reporting processes and third-party management frameworks and improving their overall operational resilience and risk management capabilities.

How Complyport can help

At Complyport, we prioritise your organisation’s operational resilience, recognising its criticality in today’s increasingly interconnected and digital world. Our suite of services encompasses Operational Resilience, IT Audit, and Cybersecurity, designed to ensure your operations’ robustness against potential threats and disruptions.

Complyport’s specialised team can help with:

• Submitting Operational Incident Reports
• Gap Analysis of the Existing Operational Resilience Framework
• Operational Resilience Audit and Remediation
• Ongoing Retainer Support via a dedicated team
• Staff Training

Complete the form below to book a FREE consultation.

Ask ViCA, your Virtual Compliance Assistant. Claim your complimentary 20 queries today!

The post Operational Incident and Third-Party Reporting first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

• The OECD’s Common Reporting Standards (CRS)
• The Directive on Administrative Cooperation (DAC) (2011/16) which implements the CRS in the EU
• The UK’s FATCA Agreement with the US

The effect will be to place obligations on financial institutions to exchange information on reportable accounts to other jurisdictions.

The concept will already be familiar to firms subject to HMRC’s FATCA obligations as well as the defined terms (CRS pages 29 and on) such as ‘Financial Institution’, ‘Reporting Financial Institution’, ‘Reportable Account’ etc.  Having said that, a UK entity should in the first instance refer to SI 2015/878 for clarification of due diligence requirements, meaning of a reportable account etc, albeit that they will be referred back to the various agreements above.

With around 90  participating jurisdictions for the purposes of the CRS (see Schedule 1 of SI 2015/878) the agreement stretches further afield than the US (FATCA) and the EU (DAC) e.g. countries such Brunei Darussalam, Cayman Islands and Korea are CRS participants.

Aside from the existing FATCA requirements, the Regulations in respect of the DAC and the CRS have effect from 1 January 2016 in that the first reporting year for the latter two is the calendar year of 2016 (with a reporting deadline of 31 May in the following year).

HMRC has produced (draft) Guidance Notes (AEIM – Automatic Exchange of Information Manual) on the exchange of financial account information.  HMRC has also updated its FATCA Guidance Notes, although sections of it have been incorporated into the AEIM.  The table commencing on page 179 of the FATCA Guidance sets out what, and what hasn’t, been incorporated.

The post Common Reporting Standards: FATCA first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

• Highlight aspects of AIFMD reporting where questions have been misinterpreted by some AIFMS;
• Identify where AIFMs have provided inconsistent responses to connected questions; and
• Provided further information on the general use and functionality of GABRIEL

Q16 (page 10) may be of particular assistance as it concerns common errors or mistakes identified by the FCA.

How can we help?

Responding to demand from our clients, Complyport recognises that the complexity of the data that firms will have to report either via GABRIEL or XML can be a challenge and that many firms are unprepared for this task. To complement its financial returns review service, Complyport also offers a standalone AIFMD Annex IV XML Reporting Service on a ‘per submission’ fee basis that covers:

• Advice on AIFMD Annex IV data sourcing;
• Advice on the reporting frequency;
• Customised Excel templates for data collection;
• Advice on data items and Excel template completion;
• Full data validation against XML rules;
• Help with the production of appropriate XML version return files from Excel data templates;
• Advice and assistance on direct submission to the FCA via GABRIEL or via XML; and
• Instruction and help on final submission procedures.

To find out more please contact us on +44 (0)20 7399 4980 or email us at info@complyport.co.uk .

The post AIFMD: Annex IV Reporting Issues first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

The Final Notice concerns failings between November 2007 and November 2014, although it does also reference that the firm had been subject to a previous Enforcement action and a Private Warning for similar failings.

In the Notice eleven breaches are listed which in total relate to 35,156,197 inaccurate or absent transaction reports.  The breaches include: reporting inaccurate trade times; incorrect identification of counterparties; incorrect use of the buy/sell indicator; incorrect BIC codes; and the failure to report 121,387 listed derivative trades.

After the usual 30% discount for early stage settlement, MLI were subjected to a financial penalty of £13,285,900 – the highest (to date) imposed for transaction reporting failures.  It is noted that the FCA has increased the metric for transaction reporting breaches to £1.50 per breach (the Deutsche Bank penalty in August last year included a ‘fine’ of £1 for each reporting breach) because it believes that past fines have not been high enough to achieve ‘credible deterrence’.

Although perhaps most firms that are subject to transaction reporting obligations are far removed from the size of MLI, the failings that gave rise to the Enforcement action e.g. inaccurate trade times, incorrect use of buy/sell indicator etc. were fairly basic.  As such, relevant firms may wish to review the Final Notice in detail and consider whether their own systems and processes are sufficient to provide comfort that they will not be added to the current list of the one dozen transgressors.

The post Transaction Reporting Failure first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

With this in mind, those firms whose year end is 31 December 2014 must submit to the SEC by 31 March 2015 its annual updating amendment for 2014, as follows:

• Exempt Reporting Advisers: Form ADV Part 1A
• Investment Advisers: Form ADV Part 1A and 2A (Brochure).

These documents must be filed electronically with the SEC via the FINRA Investment Adviser Registration Depository (“IARD”), and will be publicly available on-line shortly after submission. Before uploading these documents, it is recommended that you consult the balance in each registered entity’s FINRA Flex Funding Account so as to ensure there is sufficient cash available for payment of the required annual fees, as follows:

The post SEC Annual Updating Reminder first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

Firms subject to the EMIR reporting obligation may recall that there were phased reporting windows depending whether the contracts were:

i) entered into before 16 August 2012 and were still outstanding at that date; and

ii) entered into on or after 16 August 2012

The 16 August 2012 is the date that EMIR, but not its provisions, came into force.

Those transactions that were still outstanding on 12 February 2014 that fell within (i) had to be reported within 90 days of that date whilst those within (ii) had to be reported on 12 February 2014.

We would remind firms that they now have a two year time frame (being three years from 12 February 2014) to report any contracts that fall within (i) or (ii) but which were not outstanding on 12 February 2014 – see Article 5(4) of Implementing Regulation 1247/2012.

The post EMIR Backloading first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

The majority of changes fall within Chapter 7 (guidelines for reporting fields).

It takes immediate effect except for sections 7.5, 7.18.2 & 9.1 which will be effective from 6 August 2015.

The links provided include the marked-up changes making it easier to see what has, and hasn’t, been changed.

The post Transaction Reporting first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

The reporting was subject to the proviso that the European Commission had to report to both the European Parliament and European Commission on an assessment of whether there were any negative economic consequences of the public disclosure of information.

The EC has now published its report and, as might be expected, the EC has not identified any significant negative effects. Therefore the obligations under Article 89 will apply in full from 1 January 2015.

The post Country by Country Reporting first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .

The three month timeframe in which ESMA had to deliver these technical standards was fairly demanding and did not allow thorough investigation and research into this new area of reporting. It is believed that the EMIR reporting has shown some shortcomings and that there are instances where improvements could be made.

ESMA has now issued a Consultation Paper (2014/1352) containing a review of the EMIR reporting technical standards.

Although the changes in 2014/1352 are still in the consultation stage, firms subject to EMIR reporting – and particularly those who may have developed their own in-house systems – should familiarise themselves with the potential changes in order to consider the impact upon current processes and procedures and to plan accordingly.

The consultation period ends 13 February 2015. Once ESMA’s final report is submitted to the European Commission the latter will have three months to decide whether to endorse ESMA’s draft regulatory and implementing technical standards.

The post EMIR: Trade Repository Reporting Changes first appeared on Complyport - Your Trusted Partner in Governance, Risk, Compliance & Technology .