Category Archives: Authorisation

CP21/4: Funeral plans: proposed approach to regulation – Helpline

CP21/4: Funeral plans: proposed approach to regulation

fca funeral plans authorisation pre paid

The FCA will regulate the sale and administration of pre-paid funeral plans from July 2022 and have today published a Consultation Paper which sets out their draft rules and approach to regulation. This does not mean that the recommended actions are carved in stone, but in our experience, 95% are  unlikely to change.


HOW CAN WE HELP?
In the previous 3 years, our authorisation related work has totalled 47% of our turnover. We have the specialisms that will help your funeral plan authorisation application easier.
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Who does this apply to?
This funeral plan authorisation consultation will interest:
  • firms that sell or carry out funeral plan contracts for funerals in the UK
  • investment advisers who provide advice on funeral plan contracts 
  • insurance firms who provide life insurance policies that back some funeral plans
  • trustees of trusts and discretionary investment managers which manage the assets of trusts that back some funeral plans
  • trade bodies representing firms that carry out or sell funeral plan contracts, including those representing funeral directors
  • groups representing consumer interests
  • consumers that have a funeral plan, or are thinking of purchasing one
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Why The FCA are consulting?
Funeral plans are products under which a consumer pre-arranges and pre-pays for their funeral with a provider, generally for a fixed cost. The funeral plan could be sold by a third-party intermediary or directly by the provider firm. Mis-selling of any pre-paid service for a time of grief and reflection that turns out to be different to expectations can be devastating. The regulator is well aware that existing contracts may have been sold on different terms to those set out in this consultation and our proposals will generally allow these contracts to continue on those terms. But firms will have to meet a range of standards in their dealings with existing customers as set out in this document, and the FCA’s overarching Principles for Businesses e.g. to treat customers fairly.
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From 29 July 2022, activities involving the provision and distribution of pre-paid funeral plans will come under FCA regulation, and firms conducting these activities will need to be authorised by them.
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The regulators proposed rules are intended to protect consumers that have, or will in future take out, a pre-paid funeral plan product. We want to see an improvement in outcomes for consumers in this sector, with better value products, better sales practices, and better controls in place so consumers can be confident they will receive the funeral they have agreed. The FCA’s proposed rules will also set a level playing field for firms – all firms who want to carry on this business after July 2022 will need to meet the same standards.
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Outcomes The FCA are seeking
Through our proposed regulatory approach, the FCA want to see a market which works well for consumers, including:
• products which offer fair value, meet consumer needs and are sold fairly
• well run firms with high conduct standards and sufficient resources and risk transfer arrangements to ensure ongoing delivery of funeral services
• consumers have time and all the necessary information to make better informed decisions when choosing between different products and whether a funeral plan is right for them at all
• protections in place to ensure the fair treatment of consumers, many of whom are likely to be vulnerable
• clear, proportionate and standards (that can be supervised) within firms in the sector must meet
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What does this means for firms?
All firms will need to be authorised by 29 July 2022 to continue carrying out activities relating to funeral plan business. The FCA strongly urge firms and other stakeholders to engage with the authorisation process where applicable.
From 29 July 2022, the Financial Ombudsman Service (FOS) will become responsible for resolving disputes about funeral plans.

July 2022 is 15 months away, why do I need to act now?

The authorisation process normally takes 26 weeks for a clean application and up to 52 weeks for others. As there will be a flood of applications, it is important to get your completed and thorough application together before September, so you can get in early and be counted. 
If you fail to get authorisation by 29th July 2022, you will have to cease trading in Funeral Plans.
FCA Funeral Plan Authorisation process
It is important that all Funeral Plan firms are aware of what they need to do and by when. The key elements are:
  • All funeral plan providers that wish to continue doing so, will need to apply to the FCA
  • Firms that sell funeral plans (and do not provide or administer them) can apply for direct FCA authorisation as an intermediary or become an Appointed Representative (AR) of a principal firm. The principal is responsible for the conduct of the AR. The Principal firm is required to notify the FCA in advance if they intend to appoint ARs
  • The authorisations gateway for applications is planned to open in September 2021 and firms need to ensure they are authorised before the regulation takes effect on 29 July 2022
  • Applications for authorisation and supporting documentation should be submitted as soon as possible after the FCA opens the applications gateway. If not submitted as soon as possible firms may not have sufficient time to demonstrate they meet the Threshold Conditions before the rules take effect on 29 July 2022
  • Firms currently trading that submit their applications after 1 November 2021, may incur a late application fee. Note: paying a late application fee does not guarantee that an application will be approved or determined before July 2022
  • When submitting an application, all firms need to demonstrate how they meet the minimum standards, known as Threshold Conditions, both at the time of authorisation and on an ongoing basis. These are the minimum standards that all FCA regulated firms must meet, to be able to undertake the regulated activities they want to carry on
  • If funeral plan firms, particularly those who provide or administer funeral plans, do not intend to be authorised, they should take appropriate steps to ensure they cease regulated activities and wind down/sell their book prior to 29 July 2022. Conducting regulated activities without authorisation is a criminal offence and doing so may result in prosecution
  • Funeral plan providers that are currently trading should let the FCA know if they do not intend to apply for authorisation
  • AR notifications should be submitted after the principal firm is authorised.

We have been enabling FCA authorisation Applications since 2008 and have a wealth of experience in this field for all manner of firms from Banks to Wealth Managers, Claims Management Companies to Stockbrokers and many more!

See some of our 5 Star Ratings on Google.

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The requirements for your firm to apply for FCA Authorisation requires a package of documents compiled in a way that the regulator expects. The contents are not proscribed so much as expected. The jargon used, needs to be acceptable to regulator-speak as the FCA admit in the handbook “… uses words and phrases that have specific meanings in the Handbook or in legislation; these may be different from, or more precise than, their usual dictionary meanings.”

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What Do We Have To Provide?
Sole Traders, Partnerships and funeral Plan providers will have certain additional requirements but all firms have to have;
  • Regulatory business plan (this is a specialised area – we can help!)
  • Wind-down plan (this is a specialised area – we can help!)
  • Vulnerable customer policy(this is a specialised area – we can help!)
  • Complaints handling policies comprising the below (this is a specialised area – we can help!):
             1. Complaints handling procedures
             2. Complaints root cause identification procedure
             3. Example Management Information (MI) for complaints root cause analysis and correction
  • Compliance monitoring procedures comprising the below (this is a specialised area – we can help!):
             1. Compliance monitoring programme
             2. Example MI to monitor ongoing compliance with FCA rules
  • Financial projections comprising the below:
             1. Opening balance sheet
             2. Forecast closing balance sheet at the end of the first 12 months of trading post-authorisation
             3. Monthly cash flow forecast for first 12 months of trading post-authorisation
             4. Monthly profit and loss forecast for first 12 months of trading post-authorisation
  • Latest annual accounts (if already trading)
  • Up-to-date management accounts (if already trading and year-end date for most recent annual accounts is greater than 12 months)
  • Companies House form (SH01) (if applicable and firm has already capitalised)
  • Details of source of funding (if firm is not a limited company, sole trader or partnership)
  • Details of subordinated loans (if applicable)
  • Details of other external funding (if applicable)
  • Detailed IT controls form (if applicable)
  • Evidence of the firm’s registration with the Information Commissioner’s Office
  • Staff organisation structure chart (if applicable)
  • Controller forms
  • Controller and close link structure chart (if applicable)

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If you want to consider a Fixed Price option and need regulatory compliance help to complete your application, you need to

book a discussion with us.

Either

Call 0207 097 1434,

Email info@complianceconsultant or,

If you want a chat about your situation – and to save backwards and forwards with emails etc – please book a mutually convenient time here  –  https://calendly.com/compliancedoctor/compliance-consultant-zoom-meeting

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FCA Application Rejected or Declined?

The FCA often seem like faceless people making decisions on your future livelihood.

Sometimes their lack of, or even deluge of detail regarding their decision can make you frustrated or angry. This can cause upset and friction within the new business, either start-up or diversification. Business partners fly off the handle at the drop of hat.

Guidance and direction is freely available from the FCA but sometimes it seems they are talking a different language.

We can help you rectify the issues.

Often your application may lack the depth of content or description that the regulator looks for. They have a difficult job insomuch as they are there to protect the public from scams, charlatans, badly run businesses and any criminal activity that is inherent or who could take over your firm’s operations.

That’s where we can help. We have over 20 years regulatory experience and all of our consultants are qualified and experienced in their field. We don’t talk around the houses, we tell it to you straight. We will tell you what needs to be done, then help you do it, in partnership with us. 

But don’t take our word for it – See for yourself. Our reviews speak for themselves. Our Google Reviews are public knowledge , and rather than give you a link – please simply Google “Compliance Consultants London” and ‘Compliance Consultant‘ is usually top the leader board with the map – click on our Google Website Page, scroll down under the pictures and see the reviews. Alternatively, click HERE.

Whether your application is for AML Registration (Crypto etc) or an application to get authorised under any of the other financial services legislation (FSMA Part IV, PSD2 etc), we have the experience, the knowledge, the qualifications, and WE CARE!

 

Complete the form below – Call us on +44 (0) 207 907 1434

or Email info@complianceconsultant.org.

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FCA Decline/Reject CryptoAsset Firms

The FCA, under the 5th Anti-Money Laundering Directive have required firms to register with them for Anti-Money Laundering.

Many cryptoasset firms have had their applications rejected or recommended to withdraw due to a poor standard of completion. FCA Cryptoasset firm AML registration has been extended for existing applicants.

FCA cryptocurrency registration is akin to an authorisation and requires a lot of information, packaged in the right way. Additional forms need completing to accompany your application. If you use the wrong words, the FCA can see red flags and this will go against you.

We can help you, like all the other firms we help, to get your business on the right track and as long as your business model is sound – we can provide the right package for your next submission.

If you want to reapply with a greater potential of success, working with specialists who will work with you throughout the process, help answer any questions and advise you on the correct responses,  call the specialists in this area – Compliance Consultant, based in London and operates globally in regulatory matters including compliance and risk.

Call us on +44 (0) 207 907 1434 or email info@complianceconsultant.org

Contact Us Now!

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New Year – New Value

This post is to inform all new clients using Compliance Consultant, the FCA Authorisation  Specialists, that from 1st January 2021 our rates will be increasing by around 3% to combat cost rises and new expected efficiency tools supporting the remote working environment.

As FCA Authorisation Consultants, experienced and qualified, we will attempt to always add value to all of our services and include “extra” items where appropriate.

 

Merry Xmas 2020 and a Happy New Year 2021!

 

 

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    Compliance Support Services Explained

    Once your organisation has accomplished authorisation, you’re dedicated to satisfy a variety of on-going FCA compliance responsibilities. Companies either pick our consultancy services to help resolve specific issues or to handle the effect and impact of new policy or we tailor a retainer agreement to satisfy their particular continuous requirements.

    Retainer agreement
    Our extremely skilled group of compliance specialists have market and regulatory backgrounds supplying an unique mix of skillsets and giving you the confidence that your continuous regulatory responsibilities will be satisfied to a high expert requirement.

    With retainer service contracts separately tailored to your organisation we provide an agreed service delivery and schedule. Having operated in your sector, our professionals understand your compliance obstacles and opportunities. They share their backgrounds and understanding to solve issues; so you reap the benefits of a unique sum total of competence.
    Supplying you with budget certainty and on-demand access to an extremely trustworthy compliance partner and a topic expert panel, usually, our retainer contracts include:
    • Compliance management; setting up and your Compliance Monitoring Programme, including automating it if required.
    • Compliance audits; independent bench-mark reviews and health-checks to make certain your systems, controls, policies and regulatory procedures are kept up to date
    • Documents/Governance; such as policies and written processes or procedures
    • Financial promotions including initial reviews and ongoing assessments or critiques, including video and social media marketing
    • Training; e.g., informing personnel on anti-money laundering or assisting senior management create a suitable governance framework
    • Regulatory reporting; consisting of GABRIEL returns and evaluation of prudential requirements
    • For Payment Services companies based on PSD2, we provide distinct service plans particularly created satisfy the increased regulatory needs and responsibilities.
    • And Capital Market companies gain from a specific methodology which permits us to craft a bespoke, flexible assistance package
    • Companies fall into the Asset Management, Broker Dealers & Traders, Corporate Finance, Crowdfunding, FinTech, Infrastructure, Investment Management, P2P Lending, Private Equity, Venture Capital and Wealth Management can all benefit from individual; and tailored packages.

    Contact us today on 0207 097 1434 or email info@complianceconsultant.org

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        Special Offer For 2020 FCA Authorisations or Registrations

        Compliance Monitoring Plan template

        On ALL NEW FCA AUTHORISATIONS OR REGISTRATIONS starting from 7th July 2020 and for the rest of the 2020 year

        we will donate 3% of the fixed fee* we charge to the charity Help for Heroes, Salvation Army or Mind, mentioning your company name.

        To continue your journey to our market leading, Fixed Price Authorisations

         

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        • Subject to maximum of £750 and completion of project within 9 months.

         

        Cryptoassets and Cryptocurrency Traders – Registration Approval Days Are Numbered

        June 30th 2020 15th December 2020 was the final day to have your registration with the FCA recorded so as to receive priority review and be able to trade after 10th Jan 2021 9th July 2021.

        YOU STILL NEED TO REGISTER TO CONTINUE TO TRADE AFTER THIS DATE!

        Applications after this may be rejected or you will have to cease trading until the registration is confirmed.

        Updated 18th Dec 2020

        We have it on good authority (the FCA) that the reason for many applications not having been approved is the poor quality of the application and missing information.

        Get you application reviewed by us NOW!

        We will evaluate what is missing or what may need to be made more robust so when the FCA review your application and raise questions, you will have most of the answers to hand. Don’t delay as 9th July is only 6.5 months away

        CALL US NOW! 0207 097 1434

         

         

         

        We Can Help You With Your Application – Contact Us Now!

        Tel +44 (0) 207 097 1434

        How To Get Started – FCA Authorisation, Registration or Licence

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        Getting ready to make your application to the FCA?

        Not sure what you need to do?

        See here how you can get the right things ready and save money with us when you need assistance with your application.

        7 Things to do before you apply

        What the FCA Means By Ready, Willing & Organised


        Need Help?

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        A Word on Crypto-Tokens

        A Word About Tokens – An FCA Perspective

        The key thing to note is that any token that is not a security token, or an e-money token is an unregulated token.

        What are unregulated tokens?
        Unregulated tokens are those tokens that do not provide rights or obligations akin to specified investments (like shares, debt securities and e-money).
        These tokens can be centrally issued, decentralised, primarily used as a means of exchange, or grant access to a current or prospective product or service. They might be used in one or many networks or ecosystems.
        They can be ‘privacy tokens’, ‘fungible utility tokens’, ‘non-fungible tokens’, ‘access tokens’ etc. They can be fully transferable or have restricted transferability.
        Below we provide further details based on the two broad categories of unregulated tokens identified in the UK Cryptoasset Taskforce report, and a further category specific to the FCA’s Guidance; exchange tokens, utility tokens, and tokens referred to as ‘stablecoins’.
        Each of these categories can be further subdivided based on characteristics, such as transferability, fungibility, function, degree of centralisation etc.
        So what are Exchange tokens?
        Exchange tokens are used in a way similar to traditional fiat currency.
        However, while exchange tokens can be used as a means of exchange, they are not currently recognised as legal tender in the UK, and they are not considered to be a currency or money.
        They are generally more volatile than any currencies and commodities in general use, and as such they are not widely accepted as a means of exchange in the UK outside crypto and digital communities, and they are not typically used as a unit of account or a store of value.
        These factors mean that very few merchants accept exchange tokens as a payment tool; numbers are limited to fewer than 600 in the UK.
        Exchange tokens typically do not grant the holder any of the rights associated with specified investments. This is because they tend to be decentralised, with no central issuer obliged to honour those contractual rights — if any existed.
        The FCA are aware that exchange tokens can be acquired and held for the purpose of speculation rather than exchange, as token-holders may anticipate that the value of these tokens will increase in the future on cryptoasset markets.
        However, we do not view this as being sufficient for exchange tokens to  constitute specified investments. The analogy would be an individual holding different fiat currency or a commodity, both of which are unregulated, in the hope of a gain.
        Does the FCA regulate exchange tokens?
        Exchange tokens currently fall outside the regulatory perimeter.
        This means that the transferring, buying and selling of these tokens, including the commercial operation of cryptoasset exchanges for exchange tokens, are activities not currently regulated by the FCA.
        For example, if you are an exchange, and all you do is facilitate transactions of Bitcoins, Ether, Litecoin or other exchange tokens between participants, you are not carrying on a regulated activity.
        This is in line with our approach to other assets that remain outside our regulatory perimeter, but could nonetheless be purchased speculatively by some consumers with a view to realising profits if their value increases (eg fine wine or art).
        However, firms should note that 5AMLD has been transposed into UK law on 10 January 2020 to introduce AML requirements to certain cryptoasset activities.
        The Government has announced that in the UK they will go beyond the scope of 5AMLD which proposes to extend AML/CTF regulation to entities carrying out the following activities:
        • exchange services between one cryptoasset and another, or services
        • allowing value transactions within one cryptoasset exchange or
        • peer-to-peer exchange service provider
        • cryptoasset Automated Teller Machines
        • transfer of cryptoassets (In this context of cryptoassets,
        • transfer means to conduct a transaction on behalf of another natural or
        • legal person that moves a cryptoasset from one cryptoasset address or account to another)
        • issuance of new cryptoassets, for example through ICOs
        • the publication of open-source software (which includes, but is not limited to,
        • non-custodian wallet software and other types of cryptoasset related software)
        It should be noted that this refers to an AML regime, and does not have the effect of bringing any participant into the full FSMA regulatory perimeter.
        The Financial Action Task Force (FATF) has published guidance for cryptoasset firms that may assist firms, and the FCA has a Financial Crime Guide in their Handbook.
        Utility tokens
        Utility tokens provide consumers with access to a current or prospective service or product and often grant rights similar to pre-payment vouchers.
        In some instances, they might have similarities with, or be the same as, rewards-based crowdfunding. Here, participants contribute funds to a project in exchange, usually, for some reward, for example access to products or services at a discount.
        Much like exchange tokens, utility tokens can usually be traded on the secondary markets and be used for speculative investment purposes.
        This does not in itself mean these tokens constitute specified investments if they do not have the characteristics of relevant specified investments.
        Does the FCA regulate utility tokens?
        As utility tokens do not exhibit features that would make them the same as security tokens, they won’t be captured in the regulatory regime.
        Attempts to stabilise token volatility
        Attempts might be made to stabilise the volatility of cryptoassets, where the resulting token is commonly referred to as a ‘stablecoin’.
        These ‘stablecoins’ are a type of token, and depending on what they are backed with, how they are arranged and how they are structured, will fall in different categories of our taxonomy. For instance, a ‘stablecoin’ could be considered a unit in a collective investment scheme, a debt security, e-money or another type of specified investment.
        It might also fall outside of the FCA’s remit. Ultimately, this can only be determined on a case-by-case basis.
        The most popular observed methods of stabilisation are Fiat-backed: these tokens are backed with fiat currencies, most commonly the United States Dollar (USD), but we have seen tokens backed with other fiat currencies, including the British Pound (GBP) or a basket of currencies.
        In some cases, this involves the issuer “pegging” the value to that currency— i.e guaranteeing the value of the token, while holding a reserve offiat currency(ies) to ensure it can meet any claims. In other cases, the token gives the token holder an interest or right to the custodied fiat currency(ies), with the value of the tokens being directly linked to the value of the fiat currency held.
        These distinctions are also relevant for the models described below.
        • Crypto-collateralised: these tokens are backed with a basket of cryptoassets with the aim of spreading risk and reducing price volatility.
        • Asset-backed: these tokens are backed with a tangible or intangible asset that usually has some economic value.
        • Algorithmically stabilised: these tokens attempt stabilisation through algorithms that may, for example, control the supply of the tokens to influence price.
        Where attempts have been made to stabilise the volatility of cryptoassets these tokens will be regulated where they provide rights or obligations akin to specified investments as security tokens and e-money tokens do.
        If they do not, they will be unregulated tokens, but some of the activities performed may still be subject to regulation, for instance AML requirements.
        Tokens might be backed by financial assets, physical assets, or other cryptoassets. These tokens may in certain circumstances be security tokens or e-money tokens, depending on among other things, the rights granted by such tokens, the nature of the underlying assets and other relevant arrangements. For example, while gold itself is not a specified investment, a token that gives token holders a right or interest to gold held by a token issuer, or rights to payments from profit or income generated from the holding, buying or selling of gold may in certain circumstances be a specified.

        Remember – If Your Firm Needs Authorisation With The FCA – Call us on 0207 097 1434

        or email crypto@complianceconsultant.org

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