What made the biggest headlines for Compliance in 2018?


At the end of the year, we take a look back at the things that have kept Compliance teams busy over the last 12 months.

In January, we examined the five new regulations you would need to tackle in 2018.


The first of these, PRIIPs, came into force on 1st January. The Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products aimed to extend the standards of consumer protection introduced by MiFID II to insurance-based investment products.

One of its key requirements was the need for firms to produce Key Information Documents on the investments they offer. This soon became a somewhat controversial topic, with the FCA having to clarify expectations on PRIIPs communications before January was out.

Concerns about the value of KIDs, and firms’ ability to produce them, continued to make headlines in February.

By July the regulator was asking firms to share their experience of complying with PRIIPs as part of its work to respond to concerns, and in September, the Association of Investment Companies called for PRIIPs KIDs to be suspended, to allow the problems to be ironed out.

How will this play out in 2019? Only time will tell, but in the meantime you need to comply with the legislation and produce KIDs that meet the requirements. You can find out how to do this in our blogs on avoiding the potential pitfalls in preparing your KIDs and creating user-friendly fund factsheets and KIDs.


MiFID II also came into effect in the first week of the year, introducing new demands for financial services firms.

The rules expand the definition of financial promotions to include communications to professional clients, as well as introducing a raft of other new requirements.

As with PRIIPs, MiFID II faced its teething problems. In June, FCA chief executive Andrew Bailey announced ways the regulator was tackling MiFID II and PRIIPs shortcomings.

As with PRIIPs, the conjecture didn’t alter the fact that firms need to comply with the new regulation. If you need a refresher to make sure you are meeting the requirements, you can read our blog on what MiFID II is and how you can ensure you comply, as well as our guidance looking specifically at its impact on your financial promotions and professional client communications.

You may also want to look at whether you need to change your adviser marketing under the new rules

Our MiFID II checklist will help you to identify the changes that need to be made and keep track of the actions you take.


Not just an issue for FCA-regulated firms, the General Data Protection Regulation came into force in May for all firms processing data on EU citizens.

It gives firms a choice of six ‘lawful bases’ under which they can process data. Although many firms focused on ‘consent’ as their lawful basis of choice before the regulation came into force, it’s worth exploring the others in case one of them is more appropriate for your use of data.

The regulation took up a lot of Compliance and Marketing teams’ time and effort this year, and not without cause. Potential fines for non-compliance with the GDPR are up to 4% of annual global turnover or €20 million, whichever is greater, leading some to call the regulation the next PPI scandal.

Along with the Insurance Distribution Directive which came into force in October, new CAP rules on the use of data in marketing in November and impending FCA regulation of the claims management industry in 2019, there has been no shortage of new regulation for Compliance teams to get to grips with in 2018.


And it wasn’t just regulation that kept you busy this year. We are all probably thoroughly tired of the political wrangling around the UK’s departure from the EU, but every firm does need to consider its ramifications.

In October, the FCA outlined its proposals on amendments to its Handbook and its approach to the Temporary Permissions Regime. The consultation on those proposals is now closed, with feedback due in early 2019.

November saw the launch of a further regulatory consultation, this time looking specifically at the possibility that we leave the EU without an implementation period. This consultation closes today (21 December).

And just last week the FCA released new advice on how firms should prepare for Brexit.

Transparency an ongoing theme

Transparency and clarity remained key goals for the FCA and other regulators. The Cost Transparency Initiative was launched in November, and the theme of transparency and honest dealings, both with new and existing customers, underpinned regulatory action throughout the year.

The general insurance market study announced last month addresses fairness in pricing. Similarly, new pension transfer rules that came into force in October aims to give consumers clearer choices around their options in the run-up to retirement.

The culture of compliance

With new data showing a huge upsurge in financial services complaints, the question of the relationship between culture, regulation and good conduct was never far from the regulator’s mind.


Firms were increasingly adopting innovative approaches to delivering products and services, with the Regulatory Sandbox set up by the regulator to foster new approaches accepting 29 new firms in July.

In April, the FCA itself announced plans to further automate regulation and in September, launched a new Global Financial Innovation Network.

We looked at how Compliance teams can use technology for their own benefit and how firms undertaking digital transformation projects can reduce their regulatory compliance risk.

Looking to the future

As we close the door on 2018 and move towards another new year, Compliance teams face a never-ending raft of regulation, best practice advice and technological challenges.

But with these challenges come opportunities. 2019 will bring more legislation – some of which is already in train – the challenge of Brexit and the ongoing advance of technology.

Embrace the changing role of the Compliance Officer and rise to the challenges you face, making the most of the chances they present to build a more efficient and effective Compliance operation, as well as a future-friendly business.

Read more about your changing role and the ways to make the most of its evolution in our whitepaper, The changing role of the Compliance Officer. You can download a free copy here.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.


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