After its infamous January review, the UK’s Financial Conduct Authority (FCA) has delivered a series of “Letters to the CEO” to members of the consumer finance industry in preparation for the arrival of the highly anticipated consumer tax.
As the entire world eagerly awaits the arrival of FCA’s consumer obligations, recent regulatory correspondence with industry executives confirms support for the STAR initiative.
In essence, the Consumer Obligations Rule set by the UK Financial Watchdog introduces a whole new set of rules of conduct aimed at protecting retail consumers. Specifically, it outlines a better and more transparent relationship between financial service providers and consumers and opens up better use of services with a “consumer first” approach.
Expected to be the “most important regulatory and cultural change” to emerge in recent years, the regulation is due to come into effect on 31 July 2023, but the FCA’s recent January review found that businesses are taking steps to implement it. There is a serious lack of preparedness for .
For this reason, regulators recently issued a series of “Messages to CEOs” to various industries hoping to introduce a consumer tax. These letters specifically outline the FCA’s expectations for businesses regarding regulatory readiness and implementation.
letter to Consumer Investment Division read:
“More needs to be done to speed up transfers between investment platforms…and we expect businesses to do even more to reduce platform switching time. The mandate guidance states that “companies should make switching products, discontinuing services, or changing products as easy as they originally purchased them.” “
As the FCA continues its efforts to ensure regulatory compliance, it is important to mention the STAR transfer initiative here.
In January 2019, non-profit think tank Criterion and electronic funds transfer facilitator TeX launched the initiative with support from both regulators and the UK government.
STAR promotes good transfer practices among its platform, insurers, fund managers, re-registration and transfer intermediaries, custodians, third party administrators and trustees. For this reason, FCA Cite Forwarding Improvements Transfer time critical to the success of consumer obligations.
In this regard, FCA’s Executive Director of Consumer and Competition said: Sheldon Mills, previously said in 2021: That factor is reflected throughout the regulator’s recent interactions with the consumer investment sector.
The future of consumer obligations
STAR aims to help businesses demonstrate that they support the new consumer obligations rules through certification. As such, it perfectly demonstrates his commitment to adhere to his FCA vision of achieving more timely remittances and achieving better consumer outcomes.
The Transfer Initiative made its first accreditation in November 2022. The figures at the time show that 18 of the 76 companies that participated in the initiative were accredited.
STAR evaluates the speed of transfers, communication methods, and percentage of electronic transfers reported in the certification process, and the FCA confirms its support for this process, so initiatives like STAR will help businesses to improve their future consumption. It may help you prepare for your legal obligations.