Monthly Archives: January 2017

Article 52 Bill process begins

David Davis, Secretary of State for Exiting the European Union, has introduced the European Union (Notification of Withdrawal) Bill into the House of Commons. The Bill has only one substantive clause, which gives the Prime Minister power to trigger Article 50 and is expected to be voted through both Houses of Parliament in time to […]

BoE looks at FinTech support

Mark Carney has spoken as the chair of the Financial Stability Board, looking at the potential FinTech has to make the financial system inclusive, effective, efficient and resilient.  He said that the true promise of FinTech comes from its potential to unbundle banking into its core functions – which are settling payments, performing maturity transformation, […]

Wolfsberg Group updates trade finance principles

The Wolfsberg Group, the Banking Commission of the ICC and BAFT have published new Trade Finance Principles, updating the 2011 version.  The update reflects, in particular, the more stringent regulatory expectations on banks and will help to standardise financial crime regulatory requirements for trade transactions.

FCA publishes insurance value measures scorecard

FCA has published the first set of data in its general insurance value measures scorecard. The study covers the year to the end of August 2016 and finds poor value in both add-on and stand alone products. It also notes consumers find it hard to assess value because there is no easy common measure to […]

Lloyd’s welcomes insurance agreement

John Nelson, chairman of Lloyd’s, has welcomed the EU-US agreement on insurance and reinsurance. He stressed the importance of abolishing statutory collateral requirements, and praised the agreement for regulatory cooperation.

FCA updates on unauthorised business risks

FCA has reminded firms of the risks of accepting business from unauthorised introducers or lead generators. It stresses that authorised firms may be held responsible for unsuitable advice given by an introducer, and has noted with concern that an increasing number of introducers appear to have influence over how authorised firms run their business. It […]

LMA updates sanctions guidance

The Lloyd’s Market Association has published updated guidance on sanctions and briefed managing agents and brokers on the changes. The guidance, in new Market Bulletin Y5057, relates to processing requirements of central settlement for Iran, Syria, North Korea, Crimea, Cuba and Sudan. Transactions relating to any of these jurisdictions can only be processed through Central […]

FCA consults further on CASS 7A changes

FCA is consulting on changes to CASS chapter 7A and, in particular, on proposed changes affecting the return of client assets.  The consultation follows Treasury’s proposals on changes to the Special Administration Regime for investment firms. Among the key proposed changes are: amendments to allow certain transfers of the client money pool (CMP) not permitted […]

More action on Brexit

The CityUK has published a lengthy study and report on the EU’s “third country” regimes and alternatives to passporting. The following day, the Supreme Court delivered its judgement that confirmed an Act of Parliament is required to authorise ministers to give notice of the decision of the UK to withdraw from the EU. A White […]

Commission consults on CMU action

The European Commission has published a consultation document on the CMU action plan in connection with its planned mid-term review. The consultation provides an opportunity for stakeholders to provide targeted input to update and reframe the programme of actions required. Among actions that the Commission is keen to identify are those that strengthen non-bank sources […]

FCA speaks on responsibility and priorities

Mark Steward, Director of Enforcement and Market Oversight at FCA, spoke at the Practising Law Institute’s annual seminar on securities regulation in Europe. His speech was headlined as looking at the practical implications of US law on EU practice, but instead he focussed on three topics: financial penalties, senior manager’s regime and the new ways in […]

HSBC sets up debt collection redress scheme

FCA has announced that HSBC has voluntarily agreed to set up a redress scheme for customers who may have suffered detriment by paying an unreasonable debt collection charge imposed by HFC Bank Ltd (HFC) and John Lewis Financial Services Limited (JLFS), both of which are now part of HSBC.  Between 2003 and 2009 HFC and […]

EP rejects ML “blacklist”

The European Parliament has rejected the Commission’s “blacklist” of states at the highest risk of money laundering. As expected the EP’s vote confirms its belief that the list is too limited and should at least include countries at high risk of tax crimes. The Commission must now consider changes to its proposal, but this will […]

FCA publishes finalised guarantor loans guidance

FCA has published its finalised guidance on guarantor loans: default notices. It has made minor changes only from the consultation version of the guidance, which is relevant to guarantor lending firms seeking to take payment from a guarantor in respect of a borrower who is in default.  The guidance looks at how FCA considers firms are required to […]

Treasury proposes limited partnership changes

Treasury has published a draft legislative reform order to amend the Limited Partnerships Act 1907 in respect of private investment funds, such as venture capital and private equity funds. The proposals include the creation of a private fund limited partnership (PFLP) as a new form of limited partnership. The order is due to come into force […]

May confirms Brexit Plan

Industry has reacted to Theresa May’s speech of 17 January, when she confirmed Britain would leave the single market.  In her speech, the Prime Minister reiterated that it is for the Government alone to invoke Article 50 and take responsibility for negotiations with the EU, working with the devolved administrations. She confirmed the plan, soon, to […]

FSCS publishes plan and budget

FSCS has published its plan and budget for 2017/18. FSCS estimates that firms are likely to have to pay a total levy bill of £378 million to cover its costs. Points of interest include that FSCS: intends to raise supplementary levies relating to general insurance provision (£63 million), life and pensions intermediation (£36 million) and […]

PRA confirms increase in FSCS cover

PRA has issued a policy statement confirming it will increase the deposit protection limit provided by the FSCS to £85,000 from 30 January 2017. This is an increase from £75,000 to reflect currency fluctuations that occurred following the UK’s referendum vote to leave the EU. Firms must make all changes to customer-facing materials required to implement the […]

PRA and FCA consult on FSCS levy limit

FCA and PRA have issued a joint consultation paper on the management expenses levy limit (MELL) for the FSCS for 2017/18. The MELL provides the FSCS with adequate resources to process compensation claims resulting from the failure of financial services firms. The MELL proposed is £75.54 million, which is the maximum amount the FSCS can […]

SFO announces Rolls Royce DPA

SFO has announced it has entered into a a deferred prosecution agreement (DPA) with Rolls-Royce, following a 4 year investigation. The penalty is the highest yet in the UK against a company for criminal conduct, and the DPA was allowed on condition the company not only complies with its terms but also co-operates in future prosecutions […]

FCA publishes MiFID 2 application guide

FCA has published an application and notification user guide on MiFID 2. The guide deals with applications for new authorisation as investment firms or data reporting providers, recognition of investment exchanges, Variation of Permission (VoPs) and change of legal status. It also deals with notifications to provide regulatory information to FCA by FCA regulated firms, recognised […]

Brexit Committee calls for Parliamentary vote on Brexit deal

The first report of the committee on exiting the EU calls for the Government to publish its Brexit plan by mid-February, and says that plan should set out the Government’s position on membership of the single market and should commit that Parliament will be able to vote on the final Treaty. Among the priorities the […]

House of Commons looks at legislating for Brexit

The House of Commons Library has published a report looking at how many EU laws are directly applicable in the UK (around 5,000), and will therefore cease to apply in the UK once the European Communities Act 1972 is repealed, unless other provision is made for them. The Government says the so called “Great Repeal […]

FCA updates consumer credit information sheets

FCA has now updated its information sheets consumer credit firms should use when notifying customers that they are in arrears or default. The site now contains new sheets that will be effective from 14 April. Until then firms must use the current sheets. FCA warns any firm that downloaded the sheets originally intended to take […]

MoJ calls for evidence on corporate economic crime

The Ministry of Justice has published a call for evidence on corporate liability for economic crime. There has been much criticism for some time of the difficulties enforcement agencies have when trying to prosecute corporates for offences such as money laundering. One particular problem has been in proving the “directing mind and will” of businesses, […]

AFME responds on whistleblowing

AFME (The Association for Financial Markets in Europe) has published its response to the FCA and PRA consultation papers on whistleblowing in UK branches of overseas banks. The FCA and PRA propose that UK branches of overseas banks tell their UK-based employees about the FCA and PRA whistleblowing services. Where a branch of an overseas […]

ICO fines RSA for DP breach

The Information Commissioner’s Office (ICO) has issued Royal & Sun Alliance Insurance PLC (RSA) with a monetary penalty notice (£150,000) because of a serious breach of the seventh principle (the requirement to keep data secure) of the Data Protection Act 1998 by RSA. Between 18 May 2015 and 30 July 2015, a portable Network Attached […]

ESMA finds best execution improvements

A report from ESMA on the standard of regulatory supervision of best execution requirements under MiFID shows national regulators have improved the level of attention they pay to compliance with best execution requirements. The report covers only the 15 EU regulators identified in a previous peer report as needing to make improvements.  ESMA says many had done […]

EP unsure on MLD4 high risk list

On 9 January 2017, two Committees within the European Parliament, ECON and LIBE published a motion for a resolution (dated 13 December 2016) objecting to the proposed Delegated Regulation amending the European Commission’s list of high-risk third countries under MLD4.  The Commission says it has to identify high-risk countries exclusively on the grounds listed in […]

Law Society responds on financial advice

The Law Society has published its response to HMT’s consultation on amending the definition of financial advice in Article 53 of RAO. Generally, the Law Society supports the policy objective of appropriate regulatory simplification. Like the CLLS, it is agreed that the definition of the regulated activity should be limited to personal recommendations, and should […]

Retail banking market investigation: CMA publishes responses to draft order

The CMA has published responses to the publication of its draft order following the retail market investigation. The responding institutions include: Dansk Bank HSBC Information Commissioner’s Office Santander Tesco Which Some of the concerns raised in the responses address the proposal to introduce a monthly maximum charge in respect of unauthorised overdraft charges, the definition of […]

Global banking capital rules postponed

The Basel Committee working on Basel III rules that will determine how much capital lenders would have to set aside against loans and other assets, announced on 3 January 2017 that more work was required on certain aspects.  The rules were due to have been approved by central bank governors and the heads of supervision from […]

Government consults on single body for public financial guidance

The Treasury has issued a consultation on proposals to establish a single advisory body to replace, and bridge perceived gaps between, the Money Advice Service, the Pensions Advisory Service and ‘Pension Wise’ guidance form the Department of Work and Pensions. The new statutory body will bring together pensions guidance, money guidance and debt advice, and will have […]

The good, the bad and the ugly: FCA reviews insurance intermediaries’ professional indemnity insurance

In December 2016, the FCA published findings from its thematic review (TR16/9) of general insurance intermediaries’ (“GI intermediaries”) professional indemnity insurance (“PII”). The FCA has reviewed the PII of nearly 200 firms from the population of over 6,000 authorised GI intermediaries. The purpose of the review was to see whether the firms complied with the […]

FCA extends BCOBS guidance date

FCA has updated its industry guidance confirmation webpage The amendment relates to the BBA updated version of its industry guidance on compliance with FCA’s Banking Conduct of Business Sourcebook (BCOBS). The webpage states that the expiry date for the FCA’s confirmation of this guidance is now 31 December 2017. BBA has updated parts of the […]

WMA responds on product governance

WMA’s response to ESMA’s consultation on draft guidelines on product governance under MiFID 2 highlights: that execution-only firms are not clear on what is expected of them, given the restricted information they hold about their clients; the need to stress manufacturers of mass market products should seek only relevant information. WMA thinks the focus should […]

CLLS responds on financial advice

The City of London Law Society (CLLS) has published the response of its Regulatory Law Committee to HMT’s consultation on amending the definition of financial advice in Article 53 of RAO. It notes there is considerable confusion in the market currently, because of the differing definitions of “advice” under FSMA and MiFID, the definition of […]

FCA withdraws consumer credit info sheets

FCA has withdrawn the information sheets on consumer credit that were intended to become current on 18 January 2017. It says this is due to an error in the production of the information sheets for publication, and it will republish them shortly. In the meantime, firms must continue to use the current version of the […]

Scotland’s Place in Europe

On 20 December 2016, the Scottish Government published what is would like to see happen after Brexit in its discussion paper on “Scotland’s Place in Europe”. The paper sets out the importance of continued European Single Market membership for Scotland (if not the entire UK), and says this is also the best outcome for the […]

FCA’s Future Mission: key themes from feedback

FCA has published initial feedback from the consultation process into its proposed mission statement. Key themes include: a desire for a clearer rationale for FCA decisions, and what FCA chooses to do and not to do; more protection for vulnerable consumers but there are different views on who a vulnerable consumer is. FCA welcomes views […]