1In this chapter, the following definitions apply:
‘asset restriction’ means the restriction in CONRED 3.3.3R;
‘BSPS’ means the Old British Steel Pension Scheme (known during the relevant period as the British Steel Pension Scheme) that entered a Pension Protection Fund assessment period on 29 March 2018;
‘BSPS advice’ means advice in relation to which all of the following conditions are met:
‘FCA DBAAT’ means the FCA Defined Benefit Advice Assessment Tool;
[Editor’s note: the FCA DBAAT is available at https://www.fca.org.uk/firms/defined-benefit-pension-transfers]2
‘financial resilience assessment’ has the meaning in CONRED 3.2.2R(3);
‘relevant period’ means 26 May 2016 to 29 March 2018 (inclusive of both dates);
in full and final settlement of all potential claims arising out of the advice in (1).
‘non-scheme case’ is a case that would be a scheme case if it were not for the condition in:2
‘unsuitable BSPS advice’ is BSPS advice that does not comply with the suitability requirements that were in force during the relevant period.
2The effect of CONRED 3.1.1R(6A) is that a firm which has settled a potential case prior to the consumer redress scheme may only cease to count the case towards the Financial Resilience Assessment in CONRED 3.2 if the settlement amount has been calculated in accordance with the applicable rules and guidance. The FCA reminds all firms that they are required to calculate any offer of redress in accordance with applicable regulatory requirements.
1The provisions in this chapter are 2intended to secure the payment of redress to consumers by ensuring that a firm does not inappropriately dissipate assets that could otherwise be used to fund redress payments. This chapter is not made using the power in section 404 of the Act. However, it is intended to complement the consumer redress scheme in CONRED 4.2
However, the FCA reiterates the expectations set out in its Dear CEO Letter dated 31 March 2022 for these firms. To ensure that they have adequate financial resources, out-of-scope firms should continue to retain assets so that they can meet costs arising in connection with any BSPS redress. A copy of the FCA’s Dear CEO Letter is available here: https://www.fca.org.uk/publication/correspondence/british-steel-pension-scheme-consultation-redress-scheme.pdf
The FCA reminds SMF managers at out-of-scope firms that they are personally accountable for breach of the conduct rules in COCON. For example, Senior Manager Conduct Rule 2 requires an SMF manager to take reasonable steps to ensure that the business of the firm for which they are responsible complies with the relevant requirements and standards of the regulatory system. SMF managers should take account of the expectations in the FCA’s Dear CEO Letter when complying with their regulatory obligations.
1Under CONRED 3.1.6R(2), a firm will be treated as having provided BSPS advice if the firm has assumed liability for potentially unsuitable advice given by another person in relation to transfers of interests in the BSPS. This could arise, for example, where there has been a sale or other transfer of a client book to the firm and the terms of that sale or transfer have resulted in the firm assuming liability for the provision of BSPS advice by the original transferor.
2 CONRED 3 has no end date2. However, as a firm deals with potential redress cases (normally under CONRED 4), the cases will cease to count towards N or CL under the Financial Resilience Assessment in CONRED 3.2. Once N and CL are zero and a firm has notified the FCA accordingly, the obligations in CONRED 3 cease to be of any continuing relevance to the firm.