Compliance Digest - 5th April 2024
I hope you had a good Easter. Here is the last Compliance Digest of the financial year.
Companies House begins phased roll out of new powers to tackle fraud
Abolition of the Lifetime Allowance
FCA warns firms and fin-fluencers to keep their social media ads lawful
Wolfsberg Group statement on countering terrorist financing
Please feel free to share this within your firms.
Companies House begins phased roll out of new powers to tackle fraud
From 4th March 2024, Companies House has new and enhanced powers to improve the quality and reliability of its data and tackle misuse of the companies register. A Press Release from the beginning of March, outlines the first measures under the Economic Crime and Corporate Transparency Act 2023 (ECCT Act) which came into force on Monday 4 March 2024.
Changes introduced include:
greater powers to query information and request supporting evidence;
stronger checks on company names;
new rules for registered office addresses (all companies must have an appropriate address at all times - they will not be able to use a PO Box as their registered office address);
a requirement for all companies to supply a registered email address;
a requirement for subscribers to confirm they’re forming a company for a lawful purpose when they incorporate, and for a company to confirm its intended future activities will be lawful on its confirmation statement;
greater powers to tackle and remove factually inaccurate information; and
the ability to share data with other government departments and law enforcement agencies.
The Press Release contains some useful hotlinks to supporting documentation.
Abolition of the Lifetime Allowance
The Spring Budget 2023 announced the abolition of the lifetime allowance (LTA).
The lifetime allowance ends on 5th April 2024 and will be replaced by new allowances. For most people, the lump sum allowance (LSA) will limit the tax-free cash you can get from your pension to £268,275. The lump sum and death benefit allowance (LSDBA) will limit the total amount of tax-free cash you can get in your lifetime and when you die to £1,073,100, in most cases. An overseas transfer allowance (OTA) will also apply for clients who transfer their pension abroad.
A link to the HMRC website on the topic is here. A summary from Money Helper contains some useful tools and a summary of individual protection 2016 and fixed protection 2016.
FCA warns firms and fin-fluencers to keep their social media ads lawful
The FCA has set out how adverts across social media channels must be fair, clear, and not misleading, meaning they must have balance and carry the right risk warnings so people can make well informed financial decisions.
Social media has become a central part of firms’ marketing strategies. Firms are on the hook for all their promotions and the FCA has warned they need to ensure influencers they work with communicate to their followers in the right way.
And influencers are reminded that promoting a financial product without approval from an FCA-authorised person with the right permission could be a criminal offence. Consumers need to be alert to dubious adverts and scams online, but it is important that influencers ensure they’re on the right side of the rules and consider what would happen to their own reputations if they’re found to promote products illegally.
A press release gives more of a summary. The Finalised Guidance FG24/1 gives firms a full picture of the FCA’s expectations, including reference to support for retail consumer understanding under the Consumer Duty.
Wolfsberg Group statement on countering terrorist financing
The Wolfsberg Group, a global association of 13 banks, has released new guidance aimed at helping financial institutions detect and prevent terrorist financing.
The guidance emphasises that terrorist financing is a global problem that requires a coordinated response across the financial industry and international community. It also notes that financial institutions must be vigilant in detecting and reporting suspicious activity, including transactions that may indicate terrorist financing.
The guidance provides specific recommendations for financial institutions on topics such as risk assessments, customer due diligence, and transaction monitoring. It also highlights the importance of sharing information and intelligence within the financial industry and with relevant authorities.
The release of the guidance comes at a time of heightened concern around terrorist financing, with the Financial Action Task Force recently issuing a report warning that terrorist groups are increasingly using cryptocurrencies to evade detection and move funds.
The new guidance is a welcome contribution to the ongoing efforts to combat terrorist financing and protect the integrity of the global financial system.
Ian Ashleigh
