Thank you to all of you who attended our first quarterly breakfast briefing. The next briefing will be on 19 June 2019. To book, please visit the MLROs.com site.

We are delighted to be hosting a re-run of our sell-out half day workshop on the SMCR for solo-regulated firms. This Compliance Register seminar, at which Emma Radmore, Roseyna Jahangir and Michelle Chance will speak takes place at our London offices on 1 May. To book, please visit the Compliance Register website. We will also […]

As part of the no-deal Brexit preparations, the Board of Supervisors of the EBA have confirmed that a template MoU has been agreed with the FCA and PRA.  If there is a no-deal Brexit, this template will be used as the basis of the series of bilateral MoUs required between UK and individual EU supervisory […]

ESMA has published a statement in which it outlines its approach, in the event of a no-deal Brexit, to the application of the trading obligations for shares (STOs) under article 23 of MiFIR in the absence of an equivalence decision relating to the UK by the European Commission. The statement makes it clear that the EU’s STOs will apply […]

The FCA has fined UBS AG for transaction reporting failures during the period November 2007 to May 2017.  The FCA reported that a total of 135.8 million errors in reporting were made during this period.  It queried whether UBS had taken reasonable care to organise and control its affairs responsibly and effectively in this respect. […]

JMLSG has published proposed revisions to the chapters on credit unions and brokerage services to funds, in part 2 of its guidance. The updates aim to describe in more current terms what risks the sectors face and how to identify who customers are. The changes to the credit union chapter explains the lower risk nature […]

The Treasury Committee has written to Treasury and FCA asking for an investigation into the events at London Capital and Finance.  FCA had told the firm to withdraw its promotional materials for its mini-bonds in December 2018 as it found them to be misleading, not fair and unclear.  But the Treasury Committee feels there is […]

The European Parliament has called for urgent resolution of the debate between the EU Council and Commission on the new proposed AML blacklist. The EP had previously rejected 2 submissions by the Commission on the grounds they were not sufficiently autonomous and had supported the Commission in the development of its new methodology. It “regrets” the […]

OFSI has updated its website to reflect the latest legislation and guidance on how the UK will implement on the one hand EU and on the other UN and domestic sanctions in the event of a no-deal Brexit.  Legislation has been made under SAMLA to take effect on a no-deal Brexit in relation to Burma, […]

Womble Bond Dickinson is delighted to have expanded its offering in the financial services and insurance sectors with the hire of white collar crime partner, Audrey Koh. Audrey has substantial experience of advising clients across many jurisdictions, in particular those based in the UK, US and Europe.  Further information about Audrey can be found here.

Following work by both the FCA and the CMA, and the ‘loyalty penalty’ super-complaint, the CMA has published the terms of reference of its recently convened Loyalty Penalty Working Group (LPWG).  The LPWG includes representatives from BEIS, FCA, HMT and Ofcom. These terms of reference include: bolder enforcement and tackling harmful business practice; ‘nudge remedies’ […]

The BIS Committee on Payments and Market Infrastructures and the Markets Committee have published a joint report central bank digital currencies (CBDC). The report sets out the findings of research conducted by the committees into the potential implications of CBDC on payment systems, monetary policy implementation and transmission, and the structure and stability of the […]

The FCA has published TR19/01, the second set of findings of its review of the debt management sector. The focus of this review was firms that provide debt advice and administer debt management plans, on a for- or a not-for-profit basis. While overall the FCA found that the culture in for-profit firms is appropriately focused […]

The Select Committee on the Bribery Act has published its post-legislative scrutiny report, which concludes the Act is “exemplary”.  Enquiries and evidence have shown it to be a piece of law that works well and that other countries should follow. The only real criticism was to highlight that the Government should give better guidance to […]

FCA has published the final report in its Investment Platforms Market Study.  It has concluded that the market is working well for most consumers, but it is proposing changes that will make it less expensive and time-consuming for investors to shop around. The changes aim both to reduce the time and complexity of switching, and […]

The FCA has updated its webpage on digital regulatory reporting (DRR) by publishing – a video which explains the concept of DRR and outlines the work carried out by the DRR pilot group; a report which sets out an overview of the work and findings of phase I of its DRR pilot, which explored how firms and […]

The Basel Committee on Banking Supervision has published a statement on crypto-assets. The Committee acknowledges that while the crypto-asset market remains small relative to that of the global financial system, and banks currently have very limited direct exposures, the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential […]

In the Chancellor’s Spring Statement, the Chancellor referred to the need to ensure financial regulation can adapt to a no-deal Brexit and then, longer term, to the UK’s new constitutional position.

We have written an article on the litigation involving a UK pension plan and a US entity in which it had invested. The pension plan alleged securities fraud on the part of the investee company, and succeeded in winning compensation for investors.

We have written a short article on the pan-European view, and the views in certain key jurisdictions in the EU, on the effects of no-deal Brexit on the insurance regulation.

The Treasury Committee has published a report looking at AML supervision and sanctions implementation, as a response to the inquiry into Economic Crime. The report covers the elements of the inquiry that addressed AML and the sanctions regime. It looked both at the scale of crime and how regulation addresses the risks. The report makes several interesting […]

FCA has fined the Carphone Warehouse over £29 million for misselling its “Geek Squad” mobile phone insurance and technical support product, and acting in breach of its Principles 3,6 and 9.  Following whistleblowing reports, FCA investigated and found the firm did not give its sales staff the right training to enable them to assess customers’ […]

Following the first meeting of the EBA Working Group on APIs under PSD2, the EBA has published the first set of issues identified and consequent clarifications. The issues relate to the testing environment mandated by the SCA RTS, technical specification transparency and the identification of qualified trust service providers issuing PSD2 eIDAS certificates.

FCA has published its finalised guidance to help firms prepare their statements of responsibility and responsibilities maps under the SMCR. The guidance addresses the rules as they apply to each category of SMCR firm, in each case suggesting questions firms should ask themselves to ensure they complete the forms correctly and gives examples of good […]

FCA has issued a policy statement confirming the increase in the FOS award limit.  From 1 April, the limit that FOS can award against firms will be £350,000. This amount will apply in relation to complaints about actions on or after that date. For claims about actions before 1 April that are referred to FOS […]

FCA has made its final rules on its “Directory“. The new public register will enable searches on all directors and senior managers, certification staff and other individuals who require qualifications to undertake business with clients. FCA has made rules that will require all firms to report timely and accurate information about their Directory persons. FCA […]

The FCA is consulting on new rules to require scheme governance bodies to publish and disclose information about administration charges and transaction costs to members of personal pension schemes. Similar provisions in respect of workplace occupational pension schemes came into force in April 2018. FCA rules have required asset managers to report transaction costs and other […]

The FCA has published a survey and qualitative research they commissioned to examine UK consumer attitudes to cryptoassets. Although the research revealed a prevailing lack of understanding about cryptoassets, it also indicated a very low level of take-up: only an estimated 3% of consumers have ever bought cryptoassets, and about have of those spent under […]

The EU Council has unanimously rejected the Commission’s updated list of high risk third countries. It said the proposal was not established in a “transparent and resilient process that actively incentivises affected countries to take decisive action while also respecting their right to be heard”. The Commission will now have to start again.

Steven Maijoor has spoken on ESMA’s priorities in fund regulation. He focused on how consumer investments progress over time, and the role of costs, looking at ESMA’s costs and performance report on retail investment products.  He then spoke on the relevance of cost in investment services regulation more widely and the importance of cost disclosure […]

FCA has written a Dear CEO letter to loan-based P2P crowdfunding platforms asking them to review their wind-down arrangements.  It has recently carried out a sampling exercise which it says strongly suggests that some firms are falling short of the standard it expects. It is particularly concerned about: systems and controls around wind-down, including the […]

FCA has written a “portfolio strategy letter” to firms that provide high-cost lending products such as guarantor loans, high cost short-term credit and unsecured loans for sub-prime customers, home-collected credit, income smoothing products, logbook loans, pawnbroking and RTO. Its strategy also applies to community development finance institutions. FCA notes there are significant variations in size and […]

The FCA has written to credit card firms to request they review their policies and procedures in relation to fees and charges, to ensure they result in fair consumer outcomes and comply with CONC. The letter follows the FCA’s review of the sector, which looked at fees and charges. The review found a number of […]

The Final Report of the Access to Cash Review (Report) has been published.  The objective of this review was to consider consumer requirements for cash over the next five to fifteen years, to ensure there those consumers who require cash, including those for whom it is an economic necessity (currently about 17% of the UK […]

The UK supervisory authorities have agreed memoranda of understanding with European counterparts, to facilitate the coordinated supervision of insurance entities in the event of a no-deal Brexit.  The MoUs cover supervisory cooperation, enforcement, information exchange and mutual assistance.

The EU has agreed the terms of a draft directive that, if passed, will amend a number of consumer protection directives, including the consumer rights directive (2011/83/EU), to introduce measures such as: harmonised penalties for breaches of consumer protections, including the power to impose a fine, in certain circumstances, of up to 4% of a […]

FCA confirmed today that it would be introducing a price cap in the rent-to-own (RTO) market.  The regulator said that it wanted to “bring down prices on RTO agreements where the overall costs to consumers are high compared to other retailers’ prices.” In November 2018, FCA explained in CP 18/35 that it believed its intervention […]

FCA is likely to propose changes to how commission works in the motor finance sector.  It has carried out a review and has found that commonly used models allow brokers discretion to set the interest rate customers pay.  This means the broker can potentially earn a higher commission and this can lead to conflicts which […]

FCA has made a number of amendments to various parts of its rulebook, including: amendments to COBS on information relating to pensions savings, taking effect from November 2019 and April 2020; introducing a Devolved Authorities’ debt advice levy; and exempting unauthorised mutual societies from paying fees.

FCA is running behind schedule on some expected publications.  Its latest Policy Development Update highlights the following: consultation and discussion on the Investment Platforms Market Study remedies due in March alongside the final Market Study report; feedback on policy proposals on fees and levies, also due in March, with consultation on rates proposals in April; […]

The Authorised Push Payment (APP) Scams Steering Group announced that it has agreed a voluntary Code of good practice. The Code aims to better protect customers and reduce the occurrence of APP fraud. It sets out the agreed principles for greater protection of consumers and the circumstances in which any customer of a bank or […]

ESMA has announced that in the event of a no-deal Brexit, the Central Securities Depository (CSD) established in the UK, Euroclear UK and Ireland Ltd, will be recognised as a a third country CSD to provide its services in the EU. ESMA stated that it has adopted this recognition decision in order to allow the […]

BoE and FCA have updated their respective websites with coordinated information on their approach to a hard Brexit. BoE has published a series of materials setting out its updated plans to its supervisory approach to a hard Brexit. The papers cover: transitional relief for firms that will broadly (with exceptions) last for 15 months from exit […]

FCA has issued a set of papers on costs and charges disclosures. its feedback statement on firms’ experiences of the PRIIPs requirements concludes that firms find certain issues, in particular relating to summary risk indicators and performance scenarios, hard to deal with, and that some KIDs display transaction costs that are unlikely to be a […]

Following FATF’s meeting last week, Treasury has issued an update on the list of NCCTs to reflect the FATF conclusions.

The International Association of Insurance Supervisors has published an Application Paper on Proactive Supervision of Corporate Governance. The paper sets out principles and practices to support supervisors in their supervision of insurance firms, particularly where examining the corporate governance of financially sound firms. It also includes an indicative list of early warning red and yellow […]

The FCA has published sector-specific information to help regulated firms ensure they are prepared for the consequences of  Brexit, including a no-deal Brexit. The guidance covers banking and payments, life insurance, pensions and retirement income, general insurance, retail investment and wholesale banks, markets and asset managers.  

The Council and the European Parliament have agreed the terms of a regulation and directive setting out prudential and supervisory measures that will apply to investment firms. The new requirements will apply to the smaller investment firms that do not already come within the scope of the Capital Requirements Directive Regime (CRD IV). or who […]

SFO has announced that, having considered all the evidence, there is either an insufficient likelihood of success, or it is not in the public interest, for it to bring any further prosecutions relating to the Rolls Royce or Glaxo Smith Kline investigations.

SFO has announced its appointment of Sara Lawson as its new General Counsel.  She will take up the post in May, replacing Alun Milford.

At the most recent plenary meeting, FATF as usual reviewed its list of jurisdictions with AML deficiencies.  Although still disappointed with Iran’s lack of progress, it has continued the suspension of countermeasures, so that countermeasures apply in relation to North Korea, and EDD on a risk-based approach in relation to Iran. Otherwise, the countries with strategic […]

Andrew Bailey has spoken to the European Independent Research Providers Association on the subject of MiFID 2. He noted one guiding principle of MiFID 2 is to ensure that portfolio managers act in the best interests of their clients and are not unduly influenced by third parties.  Additionally, both MiFID 2 and FCA have a […]

OFSI has imposed its first publicised financial penalty for breach of sanctions restrictions. It fined Raphaels Bank £5,000 for dealing with £200 of a person designated under the Egyptian asset freezing legislation. The bank notified OFSI as soon as it became aware of what it had done and, as a result, what would have been […]

The Bank of England, FCA and the US Commodity Futures Trading Commission (CFTC) have confirmed that they will ensure that firms will be able to continue engage in derivatives trading and clearing activities through the CCPs they regulate following the UK leaving the EU. The announcement confirms their commitment to supporting financial stability and to […]

The EBA has published a revision to the  Committee of European Banking Supervisors’ 2006 Guidelines on outsourcing arrangements.  The revised guidelines take into account and are consistent with CRD IV, MiFID II, EMD, PSD II and BRRD. The guidelines will include provisions relating to outsourcing to cloud service providers that the EBA previously published as […]

The FCA has updated its webpage on credit rating agencies (CRAs) in order to reflect the transitional provisions under the Credit Rating Agencies (Amendment etc) (EU Exit) Regulations 2019 (SI 2019/266) (CRA Regulations). The CRA Regulations introduce conversion and temporary registration regimes for CRAs wishing to issue ratings in the UK on or after Brexit, at […]

The House of Commons Foreign Affairs Committee has published a report calling for beneficial ownership registers to be introduced in all British Overseas Territories by the end of 2020. The powers to do this were introduced in SAMLA and have caused controversy, with some territories saying the introduction of registers would adversely impact their financial services sectors […]

HMRC has published guidance for firms  on self-reporting a breach of the CFA provisions on failure to prevent facilitation of tax evasion. HMRC stresses that: reporting must be done only by an authorised representative of the firm reporting is not a requirement, and is not a defence however, it may be viewed as part of […]

In its first decision under its competition powers, FCA has found that 3 asset management firms have breached competition law by sharing of strategic information, the effect of which was that the firms knew each others plans during one IPO and one placing process, when they should have been competing for shares. The firms in […]

EBA has opened a formal investigation into possible breaches by the Estonian and Danish financial services regulators of EU law in connection with the links of Danske Bank and, in particular, its Estonian branch, with money laundering. The investigation follows a request from the European Commission, pointing out the duties of home and host state […]

Following the initiation of its market study into the wholesale insurance brokers market in November 2017, the FCA has now published its final report. The focus of the market study was on the following five areas: the possibility of some brokers being able to exercise market power to earn high commission and erect barriers to […]

The High Court has ruled that a European agency cannot terminate the lease of their premises at Canary Wharf on the basis of Brexit being a ‘frustrating event’.  Our article provides more detail on this case and its implications.

EIOPA has published a framework that sets out what drives conduct risk and how to assess it throughout a product life cycle. It looks at: business model and management risks manufacturing risks delivery risks and product management risks EIOPA hopes the framework will support national supervisors in identifying conduct and consumer protection risks early and […]

The Investment Association has published guidance that it hopes will help find managers explain technical terms to investors in a way they understand. The guidance both explains key terms and suggests areas where fund managers could usefully provide better detailed explanations.  It gives examples of where customers frequently misunderstand, and suggests practical steps to help […]

Under the Solvency II Directive, the Commission is required to review certain areas covered by the Directive by 2020. Accordingly, the Commission has sent EIOPA a formal request for technical advice on the review of the Directive.  EIOPA is asked to review a number of areas, including: the function of the matching adjustment and volatility […]

ESMA has announced that, in the event of a no-deal Brexit, LCH Limited, ICE Clear Europe Limited and LME Clear Limited will be recognised as equivalent. The confirmation of equivalence for the purposes of EMIR follows an assessment will ensure the continued clearing of derivatives trades through these clearing houses.

The Commission has published a fact sheet on legislative changes that will give customers from non-Euro Member States access to cheaper intra-EU euro payments.  The new Cross-Border Payments Regulation, that will take effect from 15 December 2019, will significantly reduce the price of these transactions and will also bring greater transparency on currency conversion charges […]

Insurance Europe and EFAMA are calling for an extension to the date on which PRIIPs KIDS must be produced for multi-option products. Currently, where a UCITS KIID has been produced for underlying funds, insurers and asset managers can produce a generic PRIIPs KID for the overall product, backed up with the specific KIIDs.  But they are allowed […]

FCA has announced briefings in the second week of March in both London and Edinburgh to help regulated firms prepare for Brexit. Firms can register to attend or view the live webcast.

FSB has published a report looking at FinTech market developments in the financial system and what that might mean for financial stability.  It is generally excited by the possibilities that FinTech offers and says that: so far, incumbent financial institutions and FinTech firms have a relationship that is largely co-operative and complementary; but there is […]

The European Parliament has approved new rules to prohibit high charges on cross-currency payments within the EU. The new rules will mean that charges for cross-border payments in the single euro payments area (SEPA) will be aligned with charges for corresponding national payments in the national currency of the Member State in which the payment […]

In its capacity as supervisor of financial market infrastructure (FMI) firms, the Bank of England has published its Annual Report, providing an overview  this sector in 2018 and future developments and priorities for 2019. Accompanying the Report, the Bank has also produced a short video describing what FMI firms are, and why they are important […]

Treasury has made a statutory instrument making necessary changes to the MLRs consequent on a hard Brexit. The instrument took effect on 13 February and will take effect on exit day.  Among other things, the changes: remove references to any EU authority; amend references to EU legislation to state either that the reference is to […]

On 13 February 2019, a new ‘pan-European pension product’ (PEPP) moved a step closer as EU ambassadors endorsed the agreement on a proposed PEPP reached between EU institutions late last year. As a new class of personal pension scheme, it is intended to provide greater choice for consumers saving for retirement and to boost the […]

Julia Hoggett has spoken on FCA’s views on compliance with market abuse prevention laws. She stressed the importance of a regulatory system (both regulators and firms) working to prevent abuses from happening, as this will always be more effective than a system that merely detects when an event has happened. She noted that firms will […]

The Government has announced new powers to protect pension schemes. Read our article on recent developments.

The Treasury Committee’s hearing on economic crime continues, and it has recently heard evidence from FOS. FOS received 8,500 complaints about fraud and scams in 2017/18 and has received over 10,000 this financial year to date. Around a quarter of fraud and scam cases are about APP fraud and another quarter about unauthorised payments.  FOS […]

PRA has issued its feedback statement, new rules and a new supervisory statement on certain aspects of its periodic and transaction fees. Its update covers: a revised approach to periodic fees for Designated Investment Firms; amending the approach to periodic fees for life insurers; updating the Part VII regulatory transaction fees for insurers; updating the […]

The Commission has published a fact sheet on its new list of high-risk third countries for the purposes of MLD4.  The new list contains 12 jurisdictions from the FATF list: the Bahamas, Botswana, North Korea, Ethiopia, Ghana, Iran, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and the Yemen, and 11 additional jurisdictions: Afghanistan, American […]

The Financial Stability Board has published its work programme for the forthcoming year. The areas upon which it intends to focus are: addressing emerging vulnerabilities in the financial system; working with standard-setting bodies to finalise and opererationalise post-crisis reforms; monitor the completion of reforms implementation; and evaluate the effect of the post-crisis reforms.  

The DWP is consulting on proposals to encourage defined contribution (DC) pension schemes to consider investing in less liquid assets such as smaller and medium-sized unlisted firms, housing, green energy projects and other infrastructure. The proposals include: requiring larger DC pension schemes to document and publish their policy in relation to investment in illiquid assets, and […]

The Government has agreed to provide a contingent liability of £329 million to fund the National Employment Savings Trust (NEST) Corporation so that it can continue to operate in the pensions market as a master trust. The Pension Schemes Act 2017 introduced a new authorisation and supervision regime for master trusts being used for automatic enrolment […]

EBA has set up a working group on APIs under PSD2.  It has published details of its meetings and the group on a new website page.

FCA has arranged for a video to be made by firms that have already implemented the SMCR, sharing their experiences of adopting it.  Contributors share the stories from Virgin Monday, HSBC, State Street and JP Morgan.

ESMA has published a supervisory briefing aimed at helping supervisors dealing with non-EU branches of EU firms. It highlights how the supervisors should ensure that the non-EU branch can comply with the requirements of EU legislation, and understand how the EU firm can manage the branch.  While not overtly aimed at UK firms, the briefing links […]

After nearly 2 years of negotiation, the European Parliament and Member States have agreed a targeted reform of EMIR. The Commission wanted to provide simpler and more proportionate rules, and the changes will exempt the smallest financial counterparties from the clearing obligation, and will create streamlined reporting requirements. It also maintains the current extension period […]

ESMA has created a new web-page on Brexit, setting out how it is preparing for it.  Its latest agreement is a MoU with BoE for recognition of CCPs and the Central Securities Depository.  It aims to recognise all UK CCPs as third-country CCPs in a timely manner now the Commission has made equivalence decisions on […]

The most recent edition of Ombudsman News focuses on enquiries FOS has received about debt collection – on credit cards, loans and mortgages. It took on over 1,000 complaints in the area during 2018. As a result, it wants debt collection firms to improve how they support vulnerable customers. Nearly half the complaints related to […]

FCA has fined Paul Stephany, formerly a fund manager at Newton Investment Management Limited. It imposed the £32,200 fine after it found Mr Stephany twice submitted orders as part of a book build for shares that were to be quoted, but then tried to get other fund managers to cap their orders at the same […]

Treasury has laid before Parliament the Financial Services (Miscellaneous)(Amendment)(EU Exit) Regulations 2019. The wide-ranging instrument amends several pieces of UK and retained EU law relating to financial services, to address Brexit-related consequences. The instrument will address deficiencies in UK law that would not work after Brexit, revokes various laws that it would not be appropriate […]

ESMA has published information on how derivatives data that must be reported under EMIR should be handled in the event of a ‘no deal’ Brexit. ESMA’s statement sets out expectations in relation to: reporting by CCPs and counterparties; reconciliation and recordkeeping by trade repositories; portability and aggregation by trade repositories; and timeline for completion of […]

Following its consultation on general standards and communication rules for payment services and e-money sectors, the FCA has now published final rules and guidance on, among other matters, the extension of the Principles for Business and rules on communication in BCOBS to certain payment service providers and e-money issuers. The new rules and guidance will […]

A group of 29 international regulators and bodies, including the FCA, has opened a cross-border pilot sandbox. Applicants that want to test innovative products and services across international markets are invited to submit applications to the UK part of the Global Financial Innovation Network (GFIN). The deadline for applications is 28 February 2019.

Under draft legislation published by the Treasury, the FCA and the PRA are to be given temporary powers to make transitional provisions, in order to ensure that most firms and other regulated entities’ day to day UK regulatory obligations will be as unaffected by Brexit as possible. However, the FCA has published a statement setting […]

As part of the preparation for a ‘no-deal’ Brexit, the FCA has agreed MoUs with ESMA and with EU and NCAs, covering supervision, enforcement and information exchange, including in relation to credit rating agencies and trade repositories.

As part of the Brexit preparations, the BoE and ESMA have published an MoU setting out cooperation and information-sharing arrangements in relation to CCPs and CSDs. This agreement, and the adoption by the EC of temporary equivalence decisions for UK CCPs and CSDs, will facilitate continued recognition of UK CCPs and CSDs and their continued […]

ESMA has published its Regulatory Work Programme for 2019, setting out ESMA’s Single Rulebook work. The matters it is working on for the forthcoming year include: Post-trading RTS under EMIR; RTS relating to registration requirements under the European Social Entrepreneurship Funds Regulation and the European Venture Capital Funds Regulation; and A report to the Commission on […]

As part of its follow up work to its asset management market study, the FCA has published new rules and guidance to help asset managers and customers understand more about how funds are being managed. The new provisions include: guidance on how fund managers should describe fund objectives and investment policies; requirements for how benchmarks, where […]

The European Commission has adopted delegated regulations under the EuSEF Regulation (346/2013) and the EuVECA Regulation (345/2013). These Regulations respectively introduced measures to allow venture capital funds to market their funds across the EU using a single set of rules. They also made provision for delegated regulations to be developed to specify requirements such as […]