Regulatory Spotlight: September 2018
Data protection, Brexit developments, countdown to IDD, open banking and much more
Deal or no deal…. that is the (data) question
As Brexit looms ever closer, everyone is considering their options for both ‘deal or no deal' scenarios. In an attempt to help businesses prepare whatever the outcome, the UK government has provided guidance on data protection in the event that there is no deal on Brexit.
The key message is that if the UK does leave the EU in March 2019 without an agreement in place for data protection, there will be no immediate change to the UK’s data protection standards. As with many other regulatory topics, this status quo outcome is a result of the EU Withdrawal Act.
The recently implemented European data protection regulation, GDPR, will be incorporated into UK law. This means that the free flow of personal data from the UK to EU would be allowed at the point of exit. The not-so-good news is that there still could potentially be changes to the legality of transferring personal data from organisations in the EU to the UK.
The European Commission (EC) has stated that if the UK’s level of personal data protection is equivalent to that of the EU, it would make an adequacy decision allowing the transfer of personal data to the UK without restrictions. However, there is no clear timetable as to when a decision on adequacy will be taken. Therefore firms need to consider the implications of this not being granted in March 2019.
Final countdown for Insurance firms
The requirements of the Insurance Distribution Directive (IDD) apply from 1 October 2018 to any firms involved in organising insurance. Firms whose main business model is in insurance should be close to finalising their preparations. For those who only do some arranging of insurance alongside their main business activities, this may have been less of a priority but we are now in the final countdown.
IDD comes at a time where there is a heightened focus on the conduct and customer agenda. It's therefore unsurprising that the changes brought in by IDD, which are set to drastically transform the insurance mediation and distribution industry focus on areas such as:
Claims Management & SM&CR
With the FCA regulation of Claims Management Companies (CMCs) beginning in 9 months time, the regulator seems to be blowing full steam with preparations. The latest development is a Consultation Paper containing draft rules and guidance for CMCs relating to the Senior Manager & Certification Regime (SM&CR) some of which will depend on whether the CMC is classed as a category 1 or 2 CMC.
Additionally, the FCA also explains some transitional arrangements that will apply to its regulation of CMCs. Quite surprisingly, the FCA does not intend to authorise individuals in CMCs until the SM&CR begins for solo-regulated firms on 9 December 2019. Before then, individuals will not be subject to the current Approved Persons Regime even though CMCs will be authorised by the FCA from April 2019.
We suggest that CMCs start familiarising themselves with these proposed rules and also respond to the consultation by 6 December 2018.
We are constantly keeping up-to-date with the regulatory changes within the financial services industry. If you need assistance to keep up with these regulatory changes please feel free to contact the team.
Other regulatory sparks
Any questions?
We are constantly keeping up-to-date with the regulatory changes within the financial services industry. If you need assistance to keep up with these regulatory changes please feel free to contact the team.
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