We are delighted to speak at and host a half day seminar on 2 October with the Compliance Register on the extension to the SMCR. For details and to book, please contact the Compliance Register.
The FCA has opened a consultation that sets out how it will apply the Senior Managers and Certification Regime (SM&CR) to Claims Management Companies (CMCs), following taking over regulation of them from 1 April 2019. The consultation also sets out when SM&CR may apply to CMCs, and what action they will need to take. The […]
As part of its implementation of PSD2, the FCA has published a consultation on matters relating to the Regulatory Technical Standards for strong customer authentication and common and secure open standards of communication (SCA-RTS) (CP18/25). Most of the SCA-RTS provisions come into effect from 14 September 2019, and certain provisions relate to measures that regulators […]
LSB has published its first summary report on how banks have applied the Access to Banking Standard. Generally it found banks have used a positive approach, but suggests some improvements, such as improvement in training for staff in branches closest to a branch which is to be closed.
The Treasury Committee has published a report, in which it describes its unanimous support for regulation for the “Wild West” crypto-currency market. The report outlines all the problems and dangers the market presents and calls for proportionate regulation, which could improve customer outcomes, reduce some of the risks and see the UK become well placed […]
FCA has confirmed it has closed its remaining investigations into life insurers, following its thematic review into the fair treatment of longstanding customers in the life insurance sector. FCA has already closed investigations into some of the firms within its study and has now concluded no further action is needed in respect of the last […]
The FCA and PRA have published a joint ‘Dear CEO’ letter sent to major banks and insurers supervised in the UK regarding the preparations and actions they have taken to manage the transition from the London Interbank Offered Rate (LIBOR) to alternative risk-free rates (RFRs). The purpose of the letters is to seek assurance that firms’ senior […]
FCA has confirmed its ban on Christian Bittar, formerly interest rate derivative trader at Deutsche Bank. It found Mr Bittar requested EURIBOR submitters to make high or low submissions, both internally and externally, so that he could benefit his own and sometimes other traders’ profitability. Mr Bittar was convicted and imprisoned for his actions, otherwise […]
Michael Nascimento, the controlling mind of a £2.8m investment fraud was sentenced to 11 years’ imprisonment in the Southwark Crown Court. Between July 2010 and April 2014, members of the public were cold-called and subjected to high pressure sales tactics to persuade them to purchase shares in a company that owned land on the island of Madeira. […]
The PRA has published the second part of its consultation on the extension of SM&CR to insurers. These proposed amendment to its rules consist of ‘technical consequential changes’ and ‘minor administrative amendments’ arising from this extension, for example refining the scope of those individuals for whom insurers may consider seeking approval for a PRA senior […]
The Treasury is not planning to include EEA market operators in the proposed arrangements enabling incoming firms and businesses to continue to operate immediately after Brexit. Accordingly if EEA market operators are no longer able to rely on MiFID II passporting rights (eg because a transitional deal is not agreed), they may need to have […]
The ASA has published a ruling which upheld a complaint that the representative APR (RAPR) in an advertisement for Sunny Loans was insufficiently prominent. The advert’s ‘incentives’ that triggered then requirement for the RAPR were the lines ‘At Sunny they don’t charge fees at all’, and ‘Loans with no fees from £100’, delivered in voiceover and […]
The European Parliament has voted in plenary to adopt a resolution on regulatory and supervisory relationships between EU and third countries. In addition, it published a provisional edition of the resolution. In summary, the resolution contains recommendations relating to the equivalence framework in financial services legislation, including that: equivalence decisions should be objective, proportionate, and risk-sensitive, while […]
Treasury and the BoE have announced that Mark Carney is to carry on in his role as Governor of the Bank until 31 January 2020, an extension of 7 months to his originally agreed term, while Sir Jon Cunliffe, deputy-governor with responsibility for financial stability, has also been reappointed.
The FCA has held its annual public meeting, at which it reviews the year past, talks about key priorities for the year ahead and takes questions from the public. Charles Randell, who was chairing his first Annual Public Meeting, opened the meeting by: noting that the demands of Brexit preparation meant that they were forced […]
The Joint Committee of the European Supervisory Authorities (ESAs) published its latest report on the risks and vulnerabilities in the EU financial system (JC 2018 34). The autumn report highlights the following risks as potential sources of instability: abrupt yield increases could generate substantive asset price volatility and lead to losses across asset classes; repricing of risk […]
Treasury has made the Regulations extending the SMCR to insurers. The Regulations bring into force certain provisions of the Bank of England and Financial Services Act 2016 from 13 September to enable the making of the measures necessary to apply the SMCR to insurers from 10 December 2018. There are also transitional provisions delaying the […]
FCA’s latest quarterly consultation focuses on SUP. FCA proposes changes that will update the Gabriel validation rule and FCA guidance on the capital adequacy form for APIs, and update its supervisory principles in line with its Approach document. Consultation closes on 7 November and 7 October respectively.
Treasury has published further drafts of Brexit-related statutory instruments: the EEA Passport Rights (Amendment, etc, and Transitional Provisions)(EU Exit) Regulations 2018 address the necessary amendments to legislation to repeal passport rights under single market directives consequent on Brexit and legislates for the temporary permissions regime for those who will lose any passports; the draft Payments […]
FCA and the Chartered Insurance Institute have worked together to create a re-assessment test of the level 4 diploma in financial planning. The new “Regulated Retail Investment Adviser Re-Evaluation” will be available from October. FCA encourages firms to use the test and may ask them to use it as part of its supervisory activities if […]
FCA has appointed Sheldon Mills, currently senior director of mergers and state aid at the CMA, as its new director of competition. He will take up the role in November.
The joint committee of ESAs has published the results of its monitoring exercise on automation in financial advice. The ESAs found that automation is growing but that there are still only a limited number of firms and customers involved. Moreover, the risks many had identified with the practice have not materialised, not least because most […]
Lisa Osofsky has given her first speech since taking over as SFO Director. She spoke of her past, as a federal prosecutor and then working in financial institutions. Her speech focused on how SFO has now successfully used DPAs and how she plans to use many more. She noted that SFO will look at whether the company has […]
The August edition of the PRA’s Regulatory Digest includes: news about a New Insurer Start-up Unit. This is a joint initiative with the FCA. The dedicated page on the Bank of England’s website includes a guide to becoming an insurer in the UK, and also a call for feedback on perceived barriers to entry in […]
OFSI has reminded all firms that hold or control funds or economic resources belonging to, owned, held or controlled by a designated person to provide a report to OFSI by 12 October. The report should cover both the UK and overseas where they are subject to UK financial sanctions legislation and should report the value […]
The FCA has published final notices in respect of One Call Insurance Services Limited and its majority shareholder John Radford for breaches in relation to client money and assets in the general insurance and protection sector. The final notices follows the decision notices that we reported on in January 2018. As planned, the FCA has fined […]
The Dubai Financial Services Authority (DFSA) and the Singapore Monetary Authority (MAS) have announced that they have entered into an agreement to promote the regulation of innovative businesses. The agreement allows referrals of FinTech firms between the two authorities, provides a framework for sharing information on innovation, and also records a commitment to collaborate on […]
The Committee on Economic and Monetary Affairs has published a report on relationships between the EU and third countries on financial services regulation and supervision. The report calls for a Resolution requiring the Commission to review how current equivalence decision procedures work, to provide greater and clearer transparency, and says there is a clear move […]
HMRC has published its guidance on civil measures it can take to address non-compliance with AML requirements. The guidance looks at HMRC’s role under the 2017 MLRs and how it will use its powers under those Regulations and under the CTA. The note addresses civil measures, but HMRC stresses that it may treat any breach […]
Lisa Osofsky has started her 5 year term as SFO Director.
FCA has confirmed its ban on Arif Hussein following a decision of the Upper Tribunal published in June. Mr Hussein was a derivatives trader with UBS, who engaged in internal chats with a UBS trader-submitter knowing that it would be improper to participate in conduct intended to influence UBS’ LIBOR submissions. FCA found that Mr […]
ESMA has confirmed the ban on binary options will remain in place for a further three months. The current ban, which prohibits marketing, distribution or sale of binary options to retail clients, expires on 2 October. ESMA has reviewed the specific features of certain binary options which make them less risky and as a result […]
The FCA has cancelled the Part 4A permissions of two firms, Causeway Group Limited and Prime Render Solutions Limited . The cancellation of the permissions is due to both firms failing to satisfy the suitability Threshold Condition, in that the FCA was not satisfied that the firms are fit and proper persons having regard to all the circumstances, […]
Treasury has published guidance for the banking, insurance and other financial services sectors on the impact of what it still describes as an “unlikely” no-deal Brexit scenario. It stresses that increased preparations towards a no-deal were always likely to be necessary the closer Brexit becomes and that accelerating the plans does not mean the Government […]
The FCA and the Pensions Regulator have launched a joint advertising campaign to raise awareness of pension scams, following research they have conducted which shows that pension scam victims each lost an average of £91,000 in 2017. The campaign, ScamSmart, is aimed at individuals aged 45-65 who are the group most at risk of pension […]
The European Commission has adopted a Delegated Regulation adding Pakistan to the list of high-risk third countries under MLD4. Member States will be bound to require application of EDD when dealing with any persons from Pakistan. The requirement will take effect 20 days after it is published in the Official Journal.
The latest draft Regulations anticipating Brexit relate to capital resources requirements. The draft Capital Requirements (Amendment)(EU Exit) Regulations 2018 are intended to make sure the CRR can continue to operate effectively once the UK has left the EU. Key changes the draft addresses relate to: group consolidation so as to amend the geographical scope of […]
FCA has started criminal proceedings against Mark Starling for three offences relating to operating CIS without authorisation or exemption over a 9 year period and of fraud. Mr Starling is alleged to have operated schemes that purported to carry out financial futures trading for investors.
FCA is consulting on how it proposes to set fees to recover its costs for setting up the regulatory regime for claims management companies and for ongoing supervision of the sector. The consultation covers fees under the temporary permissions regime and the ultimate full permissions regime. FCA plans to recover as many of its costs […]
The UK Government has published a presentation (dated 25 July) that sets out a proposed ‘Framework for the UK-EU partnership’, as part of the preparations by the UK Brexit negotiating team. This document sets out a proposed model, that would be based on the principle of autonomy, including autonomous judgement over market access, legislation and […]
In December 2017 the Law Commission confirmed that one of the projects it would be working on was addressing the absence of explicit case law and legislation that has given rise to uncertainty as to the validity of electronic signatures in some cases. Consequently, the Law Commission has now published early conclusions from its review […]
The Financial Ombudsman Service (FOS) has published a statement, following its October 2016 Consultation Paper and December 2016 Feedback Statement on complaints data publication. The Feedback Statement included FOS’s commitment to work with stakeholders to explore a new measure of cases received per 100 FCA-reportable complaints, and to report some resolved PPI complaints by volume only […]
The Financial Stability Board has published the Summary Terms of Reference of a thematic peer review of the implementation of the Legal Entity Identifier. The thematic review seeks feedback from a range of stakeholders on issues such as: awareness and adoption of the LEI in various jurisdictions; types of private sector uses of the LEI; […]
New FCA rules requiring banks to publish information about personal and business current accounts came into force on 15 August 2018. The new rules cover standing data relating to account opening and service availability and major incident metrics. Further rules will require firms to publish information about account opening and debit card replacement from 15 […]
The European Central Bank (ECB) has published the latest edition of its Supervision Letter. The August edition includes a recording of an interview with Ed Sibley, Deputy Governor of the Central Bank of Ireland and ECB Supervisory Board member, discussing the importance of all forms of diversity to the governance, culture and risk profile of banks. In […]
The FCA has published its findings of the review of how Non-deposit Taking Mortgage Lenders (NDTMLs) and Mortgage Third-Party Administrators (MTPAs) handle complaints. In particular the review looked at how NDTMLs and MTPAs treat their customers, whether their complaint handling arrangements pose any potential consumer harm, and how they could handle complaints better. The FCA found that overall […]
The Co-Chair of the All-Party Parliamentary Group on Fair Business Banking has written to Andrew Bailey of the FCA in the wake of the FCA’s announcement that it was unable to take further action in relation to its investigation of RBS’ treatment of business customers. The letter calls for further information and action on a […]
The industry body UK Finance has developed a voluntary ‘How to’ guide on compliance with the requirements of the Funds Transfer Regulation (also referred to as the Wire Transfer Regulation). The guide aims to assist with an industry-wide harmonised approach to compliance, thereby increasing the efficiency of payment processing. The guidance’s stated aim is to […]
Commission Delegated Regulation (EU) 2018/1108 has been published in the OJ. This Regulation sets out RTS relating to the criteria for determining when it may be appropriate to require electronic money issuers and payment service providers who have certain cross-border operations to appoint a central contact point for a particular territory. The RTS also address the […]
The FSB, Basel Committee, the CPMI and IOSCO have published a joint consultation on incentives to centrally clear OTC derivatives. The organisations want to look at how the post-crisis measures have worked and whether there is a need to fine-tune them. A post-reform evaluation suggests that there are overall good incentives for using central clearing, […]
The FCA has published a Dear CEO letter on cross border booking arrangements. In its letter, the FCA acknowledges that, in order to deal with the UK’s withdrawal from the EU, firms have put in place contingency plans which when executed will impact current business models, legal entity strategies and booking arrangements. The FCA appreciates the […]
The European Insurance and Occupational Pensions Authority (EIOPA) has announced that it has become a member of the Sustainable Insurance Forum (SIF). The SIF is a network of insurance supervisors and regulators from around the world working together on sustainability challenges facing the insurance sector. In July 2018, the SIF, together with the International Association […]
FCA has announced the creation of the Global Financial Innovation Network (GFIN), in collaboration with 11 other regulators and organisations. This builds on FCA’s plans for a global regulatory sandbox and will create a new framework for innovative firms interacting with regulators, and regulators sharing information. FCA has now published a consultation seeking views on […]
ESMA has responded to some queries EIOPA raised with it on the definition of AIF and leverage in the AIFMD. EIOPA had asked: whether AIFs that use certain borrowing arrangements and derivative instruments under the Solvency II Delegated Regulation considered leveraged for AIFMD purposes. ESMA points out that the AIFMD has no formal definition of […]
The ECB has published a draft Regulation amending the Money Market Statistical Reporting (MMSR) Regulation. Since July 2016, the ECB has used the MMSR Regulation to collect data on the euro money market. In addition, detailed data has been reported by large euro area banks on transactions denominated in euro in the unsecured, secured, foreign exchange […]
FMLC has published a report looking at contract continuity post-Brexit and highlights the legal uncertainties that will continue if there is no clear agreement on the UK/EU relationship. The paper, which reprises many views FMLC has already expressed, also looks at how not only legislation but also firms can take measures to mitigate the risks.
The Upper Tribunal has upheld FCA’s decision to ban Alistair Burns, Director and CF1 of TailorMade Independent Limited, firm that advised on pension transfers and opt-outs, from any significant influence or senior management function because of his lack of competence and capability. It also directed FCA to fine Mr Burns £60,000 for failing to ensure the […]
The FCA is progressing with its statutory obligation to review the CCA, by publishing an interim report on its review. The interim report sets out the FCA’s initial views on whether the repeal of CCA provisions would adversely affect consumers. Comments are requested by 2 November 2018; the final report must be delivered by 1 April 2019. […]
The International Association of Insurance Supervisors has published a draft issues paper on the increasing use of digital technology in insurance and its potential impact on consumer outcomes. The focus of the paper is on product design, underwriting and distribution. The paper notes the potential for advances in digitalisation to impact fair customer outcomes, including […]
Following its intervention in the add-on GAP insurance market in September 2015, the FCA has published an evaluation of the effect of its measures. The measures introduced by the FCA were designed to address the harms identified in its Market Study of July 2014. Their findings then were that the sale of GAP insurance as […]
The PRA is consulting on proposed changes to its Rulebook, to provide for: a technical correction to the Solvency II firms: Insurance General Application Part; and consequential changes and minor administrative amendments relating to the extension of the SM&CR to insurers. The proposed amendments include the application of an ‘overlap’ rule for individuals with ‘FCA […]
The FCA has published a consultation paper on rules and guidance to improve conduct and communication in the payment services and e-money sectors. Currently, payment service providers and e-money issuers are subject to different regulatory requirements, as both FSMA and non-FSMA firms operate in these sectors. The FCA has recognised that this creates a mismatch […]
The Payment Systems Regulator has published a report on contactless mobile payments (CMPs). It sees this as a growth area as people become more comfortable with using it, more contactless pay-points are available and functionality improves. As a result, it wanted to be sure it understood relevant issues and the effects of the sector on […]
FCA has added its own views on selling high-risk speculative investments to retail clients. It fully supports ESMA’s measures and notes that ESMA has also recognised the risks of products similar to CFDs. However, it is concerned firms will try to get around the ESMA product intervention restrictions by selling to retail investors products that […]
The FCA has published an update on its investigation into RBS’s treatment of small and medium-sized enterprise (SME) customers transferred to its Global Restructuring Group (GRG). The FCA commissioned an independent review in 2014 and found that RBS’s GRG unit had systematically mistreated customers. However, the FCA has now confirmed that it has no power to take […]
ESMA has updated its FAQs on the use of its temporary product intervention measures in respect of CFDs and binary options. New questions: state that turbo certificates are not within the scope of the CFD decision as they have different product features to CFDs, including that they are transferable securities for MiFID purposes and are […]
UK Finance has announced that together with the Building Societies Association and the Intermediary Mortgage Lenders Association, it has agreed common standards to help existing mortgage borrowers on a lender’s reversion rates to switch to a better deal in certain circumstances. The cross-industry commitment follows the FCA’s Mortgage Market Study interim report, which identified a small […]
We have written an article setting out the detail of the Sanctions and AML Act.
The FCA has published a policy statement setting out its final rules and guidance on assessing creditworthiness in consumer credit. The policy statement summarises and responds to the feedback the FCA received to the July 2017 consultation paper (CP12/27). In particular, the changes set out in the policy statement clarify the FCA’s existing rules and guidance […]
The PRA has today published its consultation paper (CP) 17/18 on the definition of default. The CP follows the European Banking Authority’s (EBA) Opinion on the implementation of the regulatory review of internal rating based (IRB) models. Background The EBA put together a list of regulatory products for the IRB framework review, with the “aim […]
FCA is consulting on rule changes for loan-based crowdfunding platforms, following its post-implementation review. It has noted the market has developed, and models have become increasingly complex, since FCA’s last review of the sector. It has also noticed some poor practices developing. Now it wants to make changes to ensure: investors get clear and accurate […]
The FCA has updated FG 16/5, ‘Guidance for firms outsourcing to the ‘cloud’ and other third party IT services’. This update takes account of the publication of the European Banking Authority’s recommendations, and changes to relevant legislation.
FCA’s latest Handbook Notice confirms several rule amendments, including: changes to DEPP and EG to explain the status of industry codes of conduct that FCA has formally recognised; changes to several parts of the Handbook including SYSC and COBS in respect of the IDD, to ensure professional firms regulated by FCA meet similar requirements to […]
FATF has published its report on the techniques and tools used by professional money launderers – those who launder money for others, for a fee. FATF has identified that many countries do not properly investigate and prosecute complex and third party laundering. The report looks at the characteristics of the professional money launderers and at […]
On 26 July, the PRA published its policy statement (PS) 21/8 ‘Solvency II: Changes to reporting format’. The PS is a result of the PRA’s consultation paper (CP) 11/18, in which it proposed to change the reporting format for: national specific templates; internal model outputs; market risk sensitivities; and standard formula reporting for firms with […]
The FCA has published a note that summarises research conducted as part of the FCA Credit Card Market Study into helping credit card users who are only making the minimum payments increase the rate at which they repay their debt. In particular, the research describes the effectiveness (or otherwise) of a series of experiments designed […]
We have written an article on the new corporate governance reporting requirements for certain large private companies. The requirements will come into force on 1 January 2019 applying to financial years beginning on or after 1 January 2019, with reporting effectively commencing in 2020 for the previous year. We also cover the consultation launched on […]
FCA has opened a Call for Input to get firms’ and consumers’ initial experiences of the PRIIPs requirements. It welcomes comments generally, but particularly in respect of: determining whether a product is within or out of scope; and the practical aspects of cost and risk disclosure requirements. The Call for Input usefully summarises the various […]
FCA has banned the 4 former directors of a now-dissolved credit broker, Secure My Money Limited. It found the firm misled customers into thinking they had been approved for short term loans and as a result took fees of over £7.2m from around 124,000 online customers. The failings happened over an 8 month period. Customers […]
The FCA has published a discussion paper on price discrimination in the cash savings market. The FCA is concerned that longstanding customers receive lower interest rates on easy access cash savings accounts products than those received by customers who shop around; and that competition is not working well in the cash savings market, particularly for customers that […]
On a new page on its website, ‘Measuring our impact before we intervene‘, the FCA has published a group of documents that aim to provide an indication of how the FCA assesses the likely impact of its policies. These documents consist of: a paper setting out the FCA’s approach to conducting cost benefit analyses for […]
The PSR has published its draft terms of reference setting out the proposed approach to the market review into the supply of card-acquiring services that it intends to carry out. The review follows concerns that the supply of these services may not be working well for merchants, and ultimately consumers. This includes, for example, concerns that there […]
ESMA has updated its FAQs on the UCITS Directive and the AIFMD. New questions include those addressing when UCITS invest in UCITS with different investment policies and supervision of branches of UCITS management companies or AIFMs that provide MiFID investment services.
BEIS has heralded the Registration of Overseas Entities Bill which will require all foreign companies that own UK properties to disclose their beneficial owners on a public register. Key provisions of the Bill include that: any foreign entity that sells or leases property must first publicly declare its beneficial owner(s). If it does not, this is a […]
The PRA has published an occasional consultation paper on regulatory reporting. The consultation paper sets out proposed changes to the following reporting requirements: discontinuance of Prudent Valuation Return PV001; changes to PRA reporting instructions to align with updated EBA requirements; amendments to Pillar 2 reporting templates and instructions to reflect their application to ring-fenced bodies; […]
On 20 July 2018, the Bank Of England (BoE), the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and Payment Systems Regulator (PSR) published their Memorandum of Understanding in relation to payment systems (MoU). The MoU sets out the high-level framework which the regulators will use to cooperate with one another in relation to payment […]
The Complaints Commissioner has published its annual report on complaints against FCA and FCA has responded. FCA notes that the Commissioner upheld FCA’s decision in 90% of the cases reviewed and generally feels FCA deals with the large majority of complaints fairly. It also takes on board the recommendations as to how it could have […]
FCA has published its annual report on enforcement actions. In 2017/18 it issued 269 final notices (of which only 21 were against individuals), secured 303 regulatory/civil outcomes (mainly involving refusal, variation or cancellation of permission or authorisation) and 14 criminal, and imposed 16 financial penalties which totalled nearly £70m. This contrasts to the £884m of fines 2 […]
Treasury is consulting on a proposed ban on cold calling in relation to pensions. The consultation is a technical consultation on the wording of the legislation necessary to implement the ban, as the policy decision has already been taken following earlier consultation. The consultation period lasts only until 17 August, and Treasury hopes to lay […]
The ESAs have published some further guidance on KIDs under the PRIIPS Regulation. The additions to the existing guidance provide some additional FAQs and updates to the flow diagrams for risk and reward calculations. New questions include confirmation that a KID must be published on the public section of the manufacturer’s website, and guidance on […]
FCA has published its Annual Report and Accounts for 2017/18. The report includes details of: FCA’s work preparing for Brexit; key regulatory changes such as MiFID 2 and PSD 2; work on SMCR extension; thematic work on high cost credit and consumer debt; and the PPI customer information campaign. It also articulates what FCA has done […]
FATF has: reported to the G20 on its current work: highlights of the report include its work on crypto-currencies and assets, improving transparency of beneficial ownership, de-risking, and fintech/regtech and digital identity; published its objectives during its US presidency: it will prioritise work on virtual currencies, as well as the now standard work on CFT […]
Nausicaa Delfas has spoken on the FCA’s approach to Brexit. She looked at how it is preparing and forward to the future. She stressed that FCA is working hard with the Government and other regulators to ensure the smoothest transition possible and promised highly integrated markets in the future regardless of the Brexit outcome. FCA […]
The European Banking Authority (EBA) has published its final report on the fraud reporting guidelines under PSD2 (Guidelines). The Guidelines have been published following the consultation which took place in August 2017. Article 96(6) of PSD2 states that payment services providers must provide ‘statistical data on fraud relating to different means of payment to their competent […]
CMA has published a report proposing several reforms to allay its concerns over competition in the investment consultancy and fiduciary management sectors. CMA was concerned that: many pension schemes (around half) choose the same provider for fiduciary management that they use for investment consultancy. CMA is concerned the investment consultant can encourage this and it means […]