UK FCA is now consulting on new guidance for firms that will be undertaking this new activity, along with two changes to the rules that it had originally proposed in CP22/5.
Pensions dashboards will be digital interfaces that will allow all consumers to find their pensions, as well as to view a set of basic information about them in one secure place.
UK MaPS has been tasked with developing and operating the public (non-commercial) Pensions Dashboard Service, and UK GVT has also enabled private sector entities to offer commercial Pensions Dashboard Services (PDS), as well as the UK MaPS offering.
To ensure an appropriate degree of consumer protection for users of these private sector dashboards, UK GVT recently amended the Regulated Activities Order (RAO) to bring the new activity of operating a PDS within the UK FCA’s wider regulatory remit.
The effect of this legislative change is that a firm wishing to operate a PDS must be or become UK FCA authorized, and get permission to undertake a new regulated activity.
It must also meet the various UK FCA requirements for firms undertaking this activity.
Consultation Overview
UK FCA confirmed operating a pensions dashboard service is to be regulated activity.
It proposes including guidance in its Perimeter Guidance Manual (PERG) to help firms understand scope of new regulated activity, and authorization and permission needs.
It also confirmed two substantive changes to the regulatory framework proposals in CP22/25, on both initial customer choices, and on the original data export proposals.
The consultation is therefore seeking comments on both the regulatory proposals, and on changes that have been made to the specific areas set out in previous consultation.
The consultation is primarily of interest to all affected firms interested in operating a pensions dashboard service and who will need to get the new regulatory permission.
Also, to bodies that help customers, members or other consumers, to find and use a pension dashboard service, for example, employers and charities pension providers.
In addition, trustees and administrators supplying information to dashboard services for pension savers to view, individual consumers and bodies representing interests of consumers individuals, and firms providing pension advice, guidance and information.
Next Steps
UK FCA will consider feedback to CP22/25 and the further consultation before finalizing its full set of rules, as well as perimeter guidance, and publishing a policy statement.
Subject to consultation feedback and external issues, it aims to publish these Q4 2024.
Consultation End
UK FCA is now asking for comments on this new consultation paper by May 8, 2024.
Nov. 6, 2024 Policy Statement and Made Rules
On Nov. 7, 2024, UK FCA issued policy statement (PS) 24/15, summarizes feedback to CP22/5 and further consultation CP24/4 on regulatory framework for dashboard firms.
Sets out FCA's response to the feedback and publishes resulting made rules.
In Oct. 2024 Minister for Pensions announced that launch of the non-commercial MoneyHelper dashboard service will be prioritized, before starting privates sector work.
Means that launch of private sector dashboards still some way into the future, but FCA is finalizing its rules now to give interested parties certainty on initial requirements.
But emphasizes that these requirements may be subject to change due to other work.
FCA's final framework of rules has broadly 2 categories: high standards it expects of all FCA regulated financial services firms; requirements specific to firms operating a PDS aiming to balance risks/opportunities, i.e. consumer protection, enabling engagement.
FCA received 33 formal responses to the consultations, most understood the aims and rational of the proposals, vast majority supported proposal to apply key existing elements of FCA HB to firms operating a PDS, so these proposals largely unchanged.
Proposed conduct standards for PDS firms attracted more mixed response, FCA has redrafted some of the rules to ensure firms able to see design choice and flexibility.
Many respondents thought proposed new Pensions Dashboard Code of Business Sourcebook (PDCOB) rules too restrictive, final rules adopt PDCOB proposals with some changes to clarify FCA's intent where respondents interpreted as too strict.
The Pensions Dashboard Service Instrument 2024 (FCA 2024/42, FOS 2024/4) comes into force Nov. 30, 2024, makes changes to Glossary to add and amend definitions.
Also inserts new chapter, PERG 12A in the Perimeter Guidance manual (PERG).
Although FCA is finalizing its rules from Nov. 30, 2024, it is not yet opening gateway to receive applications for authorization and variation of permission, this will open only when possible for firm to show ready, willing, organized to undertake PDS operation.
FCA will open gateway when UK Treasury and Pensions Dashboard Program have produced all the information necessary for a firm to design and build a PDS.
FCA will give adequate advance notice of gateway opening, accompanied by finalized application forms; in the interim, firms can continue to consult the draft forms included in CP22/25, but these forms are illustrative only and not definitive.
