Compliance Digest: 1st March 2024
As the end of the tax year looms, some advisers will be considering tax efficient inventing for their clients, maximising pension contributions and using their ISA allowances. In addition to highlighting issues raised in my industry news feeds, with my T&C hat on, I have provided some guidance regarding end of tax year planning.
FCA’s approach to enforcement
High risk third country list updated
The Anti-Greenwashing rule – green devils in the detail?
The Fraud Files: Decoding the Economic Crime Act EP4: Focus on the financial sector – APP fraud
Tax efficient investments
FCA’s approach to enforcement
In a speech by Therse Chambers, the FCA’s joint executive director of enforcement and market oversight, and in an FCA press release, the regulator trailed a development in its enforcement strategy. The key messages from the speech were:
The FCA’s enforcement strategy will evolve to make sure it has the maximum impact in deterring misconduct and crime.
Enforcement is just one of the FCA’s tools – industry cooperation, assertive supervision and intervention powers are also key in dealing with harm.
The FCA must speed up investigations to thwart criminals and send a signal to markets and consumers.
We need industry and regulators pulling together to stop opportunistic market abuse and its corrosive effects.
The speech and press release heralded Consultation Paper CP24/2 about the new approach to supervision. Comments about the CP are requested by 16th April 2024, following which, the policy statement and feedback statement will be published later in the year.
High risk third country list updated
HM Treasury has updated its website to reflect the list of high risk third countries for money-laundering regulations purposes. The list now comes directly from the Financial Action Task Force (FATF). Following FATF's plenary meeting on 23rd February, it has removed Barbados, Gibraltar, Uganda and the UAE from the list of countries subject to increased monitoring. This update from Womble Bond Dickison gives the full list.
The Anti-Greenwashing rule – green devils in the detail?
All authorised firms will need to comply with the anti-greenwashing rule, part of the FCA’s Sustainability Disclosure Regime, by the end of May. Additional guidance provided by the regulator on the rule is still in draft following a consultation period which closed last month. But with only three months left, it is an important reference point to understand what is required and how you should prepare.
Bovill has published a useful summary. The FCA policy statement PS23/16 deals with sustainability disclosure requirements (SDR) and investment labels. Guidance Consultation GC23/3 gives guidance on the anti-greenwashing rule.
The Fraud Files: Decoding the Economic Crime Act EP4: Focus on the financial sector – APP fraud
In a useful podcast from Herbert Smith Freehills, the subject of APP fraud is discussed albeit in the context of the Economic Crime and Corporate Transparency Act 2023. This may be helpful background for discussing this issue and there is potentially 20 minutes CPD for listening to the podcast The link also gives you access to related material published by HSF.
Tax efficient investments
The end of the tax year is upon us. Clients may want to take advantage of investments that will allow them to reduce their tax bills. This may be a lump-sum pension contribution, or it may be an investment into a Venture Capital Trust (VCT) or an Enterprise Investment Trust (EIS).
Your firm will have its own policies and procedures regarding VCTs and EISs that you need to follow, it may also have a panel of providers. You should consider the implications of the Consumer Duty, in particular, in relation to not causing foreseeable harm and vulnerable customers. The Syndicate Room has published a summary of the differences between VCTs and EISs that may add to the training you have had in this area. This has been written from the perspective of a direct-to-consumer platform and should be read as such..
Ian Ashleigh
