The Financial Conduct Authority is delaying its final decision over the contingent charging ban on defined benefit (DB) transfers till later this year., according to information on the UK regulator's website.
The regulator was expected to publish its final policy statement on banning contingent charging in the first quarter of 2020. However, the FCA has updated this to say this policy statement will now be published in the ‘second quarter or third quarter of 2020'.
As a result of this, changes to the rules around DB transfer advice could be delayed by up to six months.
The FCA has been looking into the DB transfer market since the volume of transfers surged after the introduction of Pension Freedoms in 2015. It had raised concerns about the high volume of transfer advice which it regarded as ‘unsuitable' and has stepped up its data collection and investigation of individual firms.
In July 2019 the FCA published its final proposals to reform DB transfer advice which included plans to ban ‘contingent' charging, to introduce a new form of ‘abridged' advice, and to crack down on high ongoing charges post transfer.
The regulator also said it wants to see firms continuing to ‘operate in this challenging period' and therefore it is willing to show ‘flexibility' around their capital.
The FCA said firms which would not be able to meet their capital requirements or debts should contact the regulator with a 'plan for the immediate period ahead".
It comes amid weeks of market turmoil as countries closed borders and entered lockdowns in a bid to stop the spread of the coronavirus and curb its death toll.