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Financial services regulatory and risk

Perspective - Blog

Options v FOS [2024] – Court of Appeal dismisses Options' judicial review

Published on 20 May 2024. By James Parsons, Associate and Rachael Healey, Partner

The Court of Appeal has today dismissed Options UK Personal Pensions' judicial review (JR) of a Financial Ombudsman Service (FOS) decision. Options challenged a FOS decision upholding a complaint on the basis of inadequate due diligence on an unregulated introducer and unregulated investment. Broadly, Options argued that (1) FOS failed to explain its departure from the law, (2) made an error of law and/or (3) reached an irrational decision. The Court of Appeal decision is of relevance to any FCA regulated entity subject to the jurisdiction of FOS given its impact on FOS decision making.

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Perspective - Blog

The Pensions Regulator's Corporate Plan – takeaways for those involved with pension trustees, pension administrators and actuaries

Published on 08 May 2024. By Andrew Oberholzer, Associate and Rachael Healey, Partner

The Pensions Regulator (TPR) published its corporate plan for 2024-2027 last week. The corporate plan sets out the challenges to the pensions landscape and TPR's priorities for the next three years. The corporate plan notes TPR's objectives – to protect savers' money, enhance the pension system and innovate in savers' interests. It is against these objectives and a changing pensions landscape that TPR looks at its focus for the next three years – and what it says will be interesting for professional indemnity insurers and pension trustee liability insurers alike.

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Perspective - Blog

Recouping overpayments - The Pensions Ombudsman v CMG Pension Trustees Limited and CGI IT UK Limited – the implications of needing a County Court order

Published on 17 January 2024. By Dorian Nunzek, Trainee Solicitor and Rachael Healey, Partner

In November last year the Court of Appeal dismissed the Pensions Ombudsman's (Ombudsman) appeal of the 2022 High Court decision in CMG Pension Trustees Ltd v CGI IT UK Ltd [2022]. The Court of Appeal's decision upheld the High Court's decision that the Ombudsman is not a "competent court" to recoup overpayments under section 91(6) of the Pensions Act 1995.

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Perspective - Blog

Vehicle finance could drive redress scheme

Published on 15 January 2024. By David Allinson, Partner

We're barely into 2024 and it looks like vehicle finance arrangements could drive forward the next miss-selling saga. The volume of complaints in this area has prompted the FCA to suspend and extend certain time limits and an industry wide redress scheme could be on the horizon.

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Perspective - Blog

A tale of a SIPP administrator, a complainant's fraudulently intercepted email account and a missing £20,000

Published on 12 December 2023. By Ben Simmonds, Associate and Rachael Healey, Partner

The Pension Ombudsman Service (POS) recently upheld a complaint and in doing so, found a SIPP administrator (the Administrator) at fault for the release of £20,000 from Mr N's (the Complainant's) SIPP to a fraudster. The determination is a helpful reminder of the responsibilities of professionals when it comes to payment transfer requests and verifying the recipient of payments, with the POS finding that given the "red flags" in the case, contact should have been made directly with the Complainant to verify the payment request or additional checks undertaken. The determination highlights the dangers of processing transfer requests via email and that in some circumstances further checks may be needed if a request looks "fishy".

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Perspective - Blog

New 'polluter pays' proposals from the FCA - are these toxic?

Published on 30 November 2023. By Kerone Thomas, Associate and David Allinson, Partner

The FCA has released a consultation paper (CP 23/24), proposing new measures for personal investment firms (PIFs) to set aside capital for potential redress liabilities at an early stage. These changes aim to address consumer harm caused and reduce the burden on the Financial Services Compensation Scheme (FSCS).

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Perspective - Blog

Cracking Down on High-Risk Investments: FCA considers industry performance

Published on 11 October 2023. By Ash Daniells, Senior Associate and Dorian Nunzek, Trainee Solicitor

After introducing stricter rules for the promotion of Restricted Mass Market Investments (RMMIs) in February 2023, the FCA continues to monitor the performance of firms, is conducting a multi-firm review and has outlined good and poor practices in the industry.

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Perspective - Blog

The FCA sets expectations ahead of incoming cryptoasset marketing rules

Published on 28 September 2023. By Kerone Thomas, Associate and Faheem Pervez, Associate

The FCA has issued a "final warning" to firms promoting cryptoassets to UK consumers to prepare for the cryptoassets financial promotion regime. Effective from 8 October 2023, this regime aims to protect consumers from promotions that make exaggerated claims about the benefits in investing in cryptoassets.

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Perspective - Blog

FSCS' annual report – historic claims but a present danger?

Published on 27 July 2023. By David Allinson, Partner

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Perspective - Blog

With great power comes a need to establish legal liability

Published on 29 June 2023. By David Allinson, Partner

The Upper Tribunal has confirmed the FCA cannot impose a redress scheme on a single firm unless the conditions in s.404 of FSMA (the need to establish breach, actionability, causation and loss) are met; and a redress scheme cannot be imposed solely in reliance on breaches of the Principles.

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Perspective - Blog

FCA expresses concern about overseas pension transfers

Published on 27 June 2023. By Ben Simmonds, Associate and Mars Yeung, Trainee Solicitor

The FCA has emphasised the importance of consumer protection amid promises of significant returns from overseas pension arrangements and offshore investments held within SIPPs. The FCA's publication is a reminder to UK firms of their consumer obligations when accepting pension transfer referrals from overseas advisers.

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Perspective - Blog

What's in store for the FCA and FOS in 2023/2024?

Published on 11 April 2023. By Rachael Healey, Partner and Thomas Spratley, Associate

April has seen the publication of the Financial Ombudsman Service and Financial Conduct Authority's Plans and Budgets for 2023/2024 – what can we learn from their strategic priorities? For both the FOS and FCA we see an emphasis on the consumer duty – with the FCA having in place a specific budget to embed the consumer duty and an interventions team in place from day 1 of the duty to ensure compliance. Both also focus on the cost of living with FOS expecting complaints in this area and the FCA noting a focus on debt services. For FOS we also see an emphasis on dealing with the complaint backlog with new "vertical" specialist teams and a portal for making complaints and uploading documents/information. For the FCA a focus on data led intervention and supervision.

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Perspective - Blog

The Financial Services and Markets Bill 2022-23 (FSM Bill) completes the committee stage

Published on 30 March 2023. By Kerone Thomas, Associate and Mars Yeung, Trainee Solicitor

On 23 March 2023, the FSM Bill completed its committee stage in the House of Lords. If passed, it will make extensive reforms to the regulation of financial services in the UK.

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Perspective - Blog

FCA publishes fast-growth firms multi-firm review

Published on 23 March 2023. By Kerone Thomas, Associate and Mars Yeung, Trainee Solicitor

The FCA has published its fast-growing firms ("FGFs") multi-firm review, setting out its expectations of FCA solo-regulated fast-growth firms to identify, assess and manage the risks arising from their activities. The results highlight an increased risk of poor outcomes for consumers and disorderly firm failure.

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Perspective - Blog

FCA demands withdrawal of unsolicited BSPS settlement offers

Published on 07 March 2023. By Faheem Pervez, Associate and Patrick Barclay, Associate

The FCA's redress scheme for members of the British Steel Pension Scheme commenced on 28 February 2023, notwithstanding an ongoing legal challenge. The FCA has separately issued three publications criticising firms for making unsolicited settlement offers to consumers before the scheme began.

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Perspective - Blog

FCA announces thematic review of retirement income advice

Published on 01 March 2023. By Faheem Pervez, Associate and Patrick Barclay, Associate

The pension freedom reforms changed the way consumers access their retirement funds. This FCA thematic review will put firms under the spotlight with a focus on how the retirement income advice market is functioning in response to changing consumer needs in the current economic downturn.

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Perspective - Blog

FCA responds to criticism of the Public Accounts Committee when it comes to BSPS with rejection of suggestion it should reconsider a wider defined benefit transfer review

Published on 03 October 2022. By Rachael Healey, Partner

In a July blog I reported on the House of Commons Public Accounts Committee report entitled "Investigation into the British Steele Pension Scheme". The blog set out a number of recommendations of the Committee in light of its investigations into the FCA's conduct and regulatory oversight of BSPS and, in particular, the 7,834 members that transferred out of BSPS into a personal pension scheme. We have now had a sneak preview of the FCA's response in the recent Committee minutes. Here's what the FCA had to say.

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Perspective - Blog

FCA Review of AML failings at challenger banks

Published on 27 May 2022. By James Wickes, Partner and Amber Oldershaw, Associate

Throughout 2021, the FCA conducted a detailed review into the financial crime controls of challenger banks as they continued to enter the UK financial industry at a rapid pace. Their surge in popularity is partially linked to the Covid-19 pandemic, which has prompted significant changes in the habits of service providers worldwide. Whilst the FCA's review indicated some evidence of good practice, it is clear that challenger banks must do more to reduce the significant risks of financial crime occurring both at the time of customer onboarding and throughout the subsequent customer journey.

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Perspective - Blog

FCA consults on British Steel redress scheme

Published on 22 December 2021. By David Allinson, Partner

The FCA intends to open consultation on an industry wide redress scheme covering British Steel Pension transfers. This is perhaps the only option left for the regulator, but a redress scheme will heap further pressure on an area of the advice industry that is already under fire.

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Perspective - Blog

FCA looks to tighten up appointed representative regime

Published on 08 December 2021. By George Smith, Partner

On Friday the FCA published a consultation paper on potential changes to the existing appointed representative (AR) regime.

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Perspective - Blog

Pure Legal interest only mortgage claim struck out

Published on 05 November 2021. By Rachael Healey, Partner

A claim brought by Pure Legal, who entered administration this week, has been struck out on limitation grounds in a further blow to claims for the alleged mis-selling of interest only mortgages.

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Perspective - Blog

FCA set to expand climate-related reporting rules

Published on 17 May 2021. By James Parsons, Associate and Ash Daniells, Senior Associate

The FCA has revealed it will consult on plans to require asset managers, life insurers and FCA-regulated pension schemes to meet climate-related disclosure rules. In doing so, the FCA is expanding the scope of firms required to report on climate-related risks in accordance with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

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Perspective - Blog

Pure Legal interest only mortgage claim – judgment in favour of the mortgage broker on limitation grounds as judge finds the damage was patent not latent

Published on 13 May 2021. By Anthony Cutler, Associate and Rachael Healey, Partner

The first judgment following trial in a Pure Legal interest only mortgage claim has now been handed down, with the judge dismissing the claim on the basis that it was out of time, with the claimants having all requisite knowledge of the material facts of the damage from the outset of taking out the interest only mortgage. The judge also found the advice was not negligent.

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Perspective - Blog

When is a complaint a complaint under DISP?

Published on 21 April 2021. By Rachael Healey, Partner

A Court of Appeal judgment has recently addressed what constitutes a complaint for the purposes of DISP [Clive Davis v Lloyds Bank [2021] EWCA Civ 557]. It is important to identify when a complaint is made as a regulated firm for two primary reasons: first, a complaint triggers the dispute resolution procedure under DISP of the FCA's Handbook and second, it stops time running for the purposes of time bar when it comes to a complaint to FOS.

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Perspective - Blog

Additions to FCA DB Transfer Guidance Published

06 April 2021

The FCA have published finalised guidance regarding defined benefit pension transfers. The latest publication amends and adds to the draft published in June 2020.

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Perspective - Blog

Adams v Carey – where does the Court of Appeal's decision leave the SIPP market?

Published on 01 April 2021. By Rachael Healey, Partner and Ash Daniells, Senior Associate

The Court of Appeal has today dismissed Mr Adams' appeal against Carey in respect of COBS 2.1.1R. However, the appeal in relation to s.27 FSMA has been upheld. We discuss the background to the proceedings, the Court of Appeal decision and where it takes the SIPP (and wider financial services) market.

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Perspective - Blog

FCA publishes finalised guidance for firms on the fair treatment of vulnerable customers

Published on 22 March 2021. By Claudia Schlossberger, Paralegal

In February 2021, the FCA published guidance on the fair treatment of vulnerable customers with the aim of improving their customer experience.

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Perspective - Blog

Calls for increased regulation following rise in FSCS bills

Published on 11 September 2020. By Shauna Giddens, Associate

The FSCS levy for the 2020/2021 was released earlier this year, causing frustration amongst many advisors in the sector. That frustration continues, with the FSCS making large compensation payments in respect of defined benefit (DB) transfers where many question the lack of earlier FCA intervention, which might have alleviated the problems in this area.

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Perspective - Blog

FCA appoints new CEO

Published on 25 June 2020. By Jennifer Inman, Paralegal

The Financial Conduct Authority (FCA) has appointed Nikhil Rathi, the UK head of the London Stock Exchange, as its new permanent chief executive, making him the first BAME leader of the UK's city regulator.

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Perspective - Blog

Equity Release Market Under the Spotlight

Published on 18 June 2020. By Rachael Healey, Partner

Yesterday the FCA published its key findings from exploratory work involving "later life lending". This type of lending is broadly where consumers 55 and over use borrowing to access cash in later life. One of those options is equity release which was the focus of the FCA's work. The FCA's focus on equity release appears to have resulted from an initial review of the broader later life lending market, at which time the FCA identified some "poor outcomes" in equity release sales.

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Perspective - Blog

FCA advice checker – FCA statement on what customers should look out for in DB transfer advice

Published on 11 June 2020. By Rachael Healey, Partner

Wrapping up the documents published by the FCA on 5 June 2020 on the issue of defined benefit pension transfers (DB transfers), we address in this blog the FCA's "advice checker".

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Perspective - Blog

The future of DB transfer advice - the FCA's policy statement

Published on 10 June 2020. By Rachael Healey, Partner

In part 3 of our blog series on defined benefit pension transfers (DB transfers) we look at the FCA's policy statement on changes to the DB transfer rules. The change that has attracted most press attention is the ban on contingent charging but there are other parts to the policy statement that are likely to have a much more substantive impact on the DB transfer market going forward.

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Perspective - Publication

HKEX published additional guidance specific to biotech companies

Published on 10 June 2020.

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Perspective - Blog

DB Transfers – the FCA's views on good and bad practice

Published on 09 June 2020. By Rachael Healey, Partner

Continuing our blog series, one of the documents produced by the FCA on Friday was a guidance consultation document intended to meet requests from the industry to help advisers understand the FCA's expectations when advising on pension transfers and conversions. The document includes examples of the FCA's views of good and bad practice in the area of defined benefit pension transfers (DB transfers). The stated aim is to "improve the suitability of DB transfer advice" and "to give advisers confidence to give good advice". The FCA expects firms providing DB transfer advice to read the document and once finalised it is intended that firms use it to identify any weaknesses in their existing processes.

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Perspective - Blog

DB transfers – further findings from the FCA's supervisory review

Published on 08 June 2020. By Rachael Healey, Partner

The FCA produced four documents on Friday addressing defined benefit pension transfers – an update on their supervisory work, a guidance consultation setting out examples of good and bad practice, an "advice checker" for consumers (including helping them consider if they should make a complaint) and a policy statement setting out changes to the defined benefit pension transfer rules which are to largely come into force from 1 October 2020. All are essential reading for an area the FCA continues to fixate on and where it has focussed since the April 2015 pension freedoms.

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Perspective - Blog

Update on the FCA's review of Defined Benefit transfer advice

Published on 21 May 2020. By Zoe Melegari, Associate

The FCA has been looking to improve the quality of pension transfer advice for some time now. However, despite the crackdown on defined benefit transfers being announced as a strategic priority earlier this year, it appears that factors, such as Covid-19 have put the FCA's investigations into advice suitability on the back foot – for now, at least.

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Perspective - Blog

Adams v Carey – the judgment – over 2 years in the making, where does it leave the SIPP market

Published on 19 May 2020. By Ash Daniells, Senior Associate and David Allinson, Partner and Rachael Healey, Partner

More than two years since the trial in March 2018, the High Court has dismissed the claim against Carey Pensions on all counts. The landmark case is sure to have far reaching ramifications for the SIPP industry and beyond.

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Perspective - Blog

SIPP and SSAS providers face further test following in-specie ruling in favour of HMRC

Published on 13 May 2020. By Rachael Healey, Partner

The Upper Tier Tribunal has overturned a decision of the First Tier Tribunal and found in favour of HMRC in a case that is likely to place further pressure on the SIPP and SSAS markets.

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Perspective - Blog

FOS complaints and hindsight – categorical statement from the Chief Ombudsman

Published on 11 May 2020. By Rachael Healey, Partner

The FCA has been producing a range of temporary measures with the aim of ensuring that firms can work at pace during the pandemic for the benefit of customers. However, where procedures are bypassed or corners cut what will FOS do in response? The response from FOS to that questions raises another – the use of hindsight when coming to its decisions.

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Perspective - Blog

The Financial Ombudsman Service's response to COVID-19

Published on 23 April 2020. By George Smith, Partner and Laura Sponti, Associate

A few weeks ago, the FOS announced it was closing its office in response to government guidance but was continuing to receive and respond to complaints both old and new. The FOS' latest newsletter offers useful further insight into the FOS' response to the current crisis.

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Perspective - Blog

SM&CR temporary arrangements extended to 9 months for FCA solo-regulated firms

Published on 07 April 2020. By Jonathan Charwat, Partner

As well as giving general guidance on its expectations on how solo-regulated firms should be complying with SM&CR during the COVID-19 pandemic, the FCA has announced that it will permit unapproved individuals to cover for Senior Managers for up to 36 weeks. In a separate joint statement, the FCA and PRA confirmed that this rule change will not apply to dual-regulated firms but that the position is under review.

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Perspective - Blog

FCA's expectations of insurance firms

Published on 02 April 2020. By Jonathan Charwat, Partner

Over the last couple of weeks, the FCA has been publishing information and guidance for firms in relation to the COVID-19 crisis. In addition to its general update on COVID-19, the FCA has set out specific expectations of insurance firms.

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Perspective - Blog

Back to Brexit – House of Lords EU Financial Affairs Committee recommendations on financial services after Brexit

Published on 01 April 2020. By Lucy Kerr, Senior Associate

The House of Lords EU Financial Affairs Committee has published recommendations on the financial services industry post-Brexit. The Committee recognised that this may not be a government priority due to COVID19, but EU negotiations and the future of the UK's financial services industry will be important issues in future months.

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Perspective - Blog

COVID-19: key financial workers

31 March 2020

The Financial Conduct Authority (FCA) has released guidance on steps financial services firms should take to help identify 'key workers'.

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Perspective - Blog

COVID-19 forces POS and FOS office closures – what does it mean for complaints?

Published on 30 March 2020. By Ash Daniells, Senior Associate

The COVID-19 outbreak (and the subsequent UK lockdown) continues to impact our daily lives and it seems the Financial Ombudsman Service (FOS) and The Pensions Ombudsman (POS) are not immune. With office closures announced, we look at the impact this will have on outstanding complaints and those yet to be made.

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Perspective - Blog

New FCA signposting travel insurance rules

Published on 27 March 2020. By Lauren Murphy, Senior Associate

Earlier this month the FCA published a policy statement detailing new requirements aimed at helping consumers with pre-existing medical conditions (PEMCs) obtain travel insurance. The new requirements demonstrate the FCA's continuing focus on improving the treatment and protection of vulnerable consumers accessing insurance and other forms of financial services.

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Perspective - Blog

COVID-19 – FCA's update for consumers

26 March 2020

In the current unsettling time, in addition to publishing guidance for firms, the FCA is keen to maintain contact with consumers. The FCA wants to ensure consumers are being protected and therefore, is providing regular advice on the steps that consumers can take to stay aware of any potential impact on their finances.

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Perspective - Blog

COVID-19: FCA's update for firms

Published on 23 March 2020. By Jonathan Charwat, Partner

The FCA's website may not be your first port of call to keep up-to-date on the COVID-19/coronavirus situation here in the UK, but it should be on your list. Why?, you may ask!

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Perspective - Blog

FOS warns consumers to ensure insurance applications correct

Published on 23 March 2020. By Ash Daniells, Senior Associate

The Financial Ombudsman Service (FOS) has warned consumers of the risks in providing incorrect details in relation to insurance policies in a new insight report. The risks include policies being avoided due to misrepresentation or material non-disclosure or potentially facing a significant shortfall due to underinsurance.

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