Monthly Archives: March 2017

FCA publishes near final MiFID 2 trading rules and consults on others

FCA has published a near final version of many of the rule changes to implement MiFID 2. The rules it has now more or less finalised relate to: data reporting services providers (DSRPs) – a new category of firm; position limits and reporting for commodity derivatives; and systems and controls requirements for firms that provide […]

Many MiFID 2 measures in OJEU

A swathe of delegated legislation and adopted technical standards relating to MiFID 2 has been published in the OJEU. Key measures now published (many of which had been finalised some time ago) include: the MiFID 2 level 2 Regulation on organisational requirements and operating requirements for investment firms, and defined terms; the MiFIR level 2 […]

FCA makes new rules

FCA made several changes to its rulebook at its Board Meeting on 30 March. Key changes include: changes to fees relating to the FOS and periodic fees for exchanges and benchmark administrators; changes to the FSCS management expenses levy limit; implementing the policy proposal for PSR fees; allowing FCA to set fees relating to MiFID […]

PSR publishes terms of reference for its role in preventing and responding to push-payment scams

Today, the payment systems regulator published its final terms of reference PSR will consider whether it would be effective and proportionate for operators of push payment systems to play a greater role in preventing and responding to APP scams (and possibly wider fraud). The expanded role might be in the form of actions that the […]

FCA to tackle contactless card fraud

John Griffith-Jones, Chairman of FCA and Payment Systems Regulator, has written to Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, about contactless card fraud. In 2015 there was £2.5m of reported contactless fraud, out of £7.75bn of contactless transactions. In his letter, Griffith-Jones highlights the key risk as merchants who process payments ‘offline’ (ie batch […]

Keeping up with the credit sector: the FCA’s view on the market today

In a speech by Jonathan Davidson (Director of Supervision – retail and authorisations at the FCA), delivered at the Credit Summit in London today, Davidson highlighted the FCA’s current view on the consumer credit market. Amongst other topics, his speech covers the FCA’s thinking in relation to: current and projected levels of borrowing authorisations of consumer […]

Treasury makes investment advice change

Treasury has published the statutory instrument amending article 53 of the RAO to make the change to the definition of “investment advice” on which Treasury had consulted. As promised, it does not amend the definition for the purposes of the regulatory perimeter, but provides that investment advice, when given by a person appropriately authorised under […]

Government publishes Great Repeal Bill White Paper

As promised, the Department for Exiting the EU has set out the Government’s proposals for making sure the UK statute book will continue to function once Brexit has taken place. As has been well documented, the plan is to convert the “acquis” into UK law at the moment the UK repeals the European Communities Act. […]

Payment systems regulator unveils 2017/18 plan and budget

In the plan the PSR sets out its aims and a summary of its anticipated activities and expected costs for the next twelve months. The PSR said its budget costs would consist of: Staff costs: £7.9m Professional fees: £2.5m Accommodation and office services: £0.8m Training, recruitment and travel: £0.4m Information systems: £0.4m The PSR said that during […]

Sanctions fining regime effective from 1 April

A new commencement order under the Policing and Crime Act 2017 brings into force the new powers on financial penalties for breach of financial sanctions, from 1 April.  Part 8 of the Act: sets the maximum imprisonment term for breach of sanctions at 7 years, and confirms the maximum imprisonment term for related offences;  allows Treasury […]

UK opts in to MLD4 data sharing

The UK has decided to exercise its right to opt-in to the proposed changes to MLD4 that would facilitate data sharing between financial intelligence units and enforcement authorities.

UK triggers article 50

On 29 March, as promised, Theresa May wrote to Donald Tusk triggering Article 50 of the Treaty on European Union. The letter stresses the vote to leave the EU does not mean the UK is leaving Europe, nor did it attempt to harm the EU or the remaining Member States. As the European Union (Notification […]

MiFID 2 RAO amendments made

The FSMA (Regulated Activities) (Amendment) Order 2017 has been made.  It makes several amendments to FSMA and secondary legislation, primarily the RAO, as part of the UK’s implementation of MiFID 2. Key provisions: enable applications for authorisations or variations of permission that relate to MiFID 2 changes to be made and determined from 1 April. […]

LSB publishes new business lending standards

LSB has published an updated version of the Standards of Lending Practice. The update follows the Lending Code review, and replaces it from 1 July. The new Standards also extend business customer protection to small businesses with a turnover of up to £6.5m, provided they do not have complex ownership structures.  The Standards cover overdraft, loan, credit card […]

Investment Association consults on disclosure

The Investment Association is consulting on an industry code for standardising disclosure for charges and transaction costs. The Code is designed to help trustees and governance committees of pension funds to access and scrutinise costs, give distributors the information needed to make disclosures compatible with MiFID 2 and PRIIPs requirements, and also help make the […]

Super trade body gets a name

The new trade body, which will be formed from the merger of the BBA, CML, Payments UK, the UK Cards Association, the Asset Based Finance Association and Financial Fraud Action UK, is to be called UK Finance. Bog Wigley has now commenced his role as chair, and the new body will launch in the summer.

“Same business, same risks, same rules” – ECB comments on regulation of Fintech

In a statement made at an ECB Fintech Workshop, Sabine Lautenschläger (Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB) told the audience how the ECB sees some of the following as risks: New players make the market more competitive. And that could squeeze profits and force […]


ESMA’s recent report on trends, risks and vulnerabilities (TRV) reveals that the total number of complaints reported across the EU was 7,026 in 1H16 compared to 5,152 in 2H15. The three most common causes among complaints reported directly to national regulators in 1H16 were on: execution of orders (31%); quality/lack of information (19%); and unauthorised […]

PRA consults on fees

PRA has published its proposals for regulated fees and levies for 2017/18. Key proposals include: an estimate of a 2% increase in PRA’s budgeted cost for ongoing regulatory activities and a new estimate costs associated with EU withdrawal of £5.4m; PRA will continue to incur costs on implementing the ring-fencing regime, with related fees payable by […]

ECB reflects on supervisory priorities for 2017

Danièle Nouy, Chair of the Supervisory Board of the ECB, made the introductory statement in Brussels yesterday. Current supervisory priorities comprise three high-level areas: business models and profitability drivers; credit risk with a focus on NPLs and concentrations; risk management. These priorities reflect the ECB’s view that the key risks identified in 2016 remain, for the most part, […]

European Commission publishes FS action plan

The Commission has published its Financial Services Action Plan for a “deeper and fairer Single Market”. As ever, the priority is to enhance competition and improve consumer choice, regardless of where and how consumers shop for financial services and products. The plan notes that only 7% of consumers buy financial services from other Member States […]

Bond Dickinson named Insurance Team of the Year 2017

At the Legal Business Awards on 23 March, we were delighted to win Insurance Team of the Year 2017. Click here to read more about our team’s achievement.

Treasury Committee concerned about cyber strategy accountability

Andrew Tyrie  (Chairman of the Treasury Committee) and Philip Hammond have been exchanging correspondence about cyber security in the financial services sector. Mr Hammond also chairs the National Security Council Subcommittee on Cyber (NSC Cyber) said that protecting against cyber attacks is top priority for the government. He noted the launch of the National Cyber […]

European Commission releases public consultation on FinTech as part of Consumer Financial Services Action Plan

In a statement released today, the European Commission has presented an Action Plan that sets out ways to provide European consumers with greater choice and better access to financial services across the EU. At its heart is a focus on technology, given that innovative online services will drive progress towards a more integrated market for financial services. This […]

ECB makes statement on standards for Eurozone bank licences after a ‘hard Brexit’

In a statement by Sabine Lautenschläger, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, Lautenschläger considered that any bank that moves to the euro area will have to meet the ECB’s standards – regardless of whether it comes from the UK or any other place. Most […]

Cheque & Credit Clearing Company announce details of image-based cheque clearing system to go live for some banks on 30 October 2017

The C&CCC – the organisation that manages the cheque clearing system – has announced the details of the launch of an industry-wide image-based cheque clearing system that will speed up cheque processing significantly for customers across the UK. Although cheque usage is in decline, 477 million were written in 2016. For customers, the new system […]

Parliament seeks clarity on ML allegations

An urgent question asked in the House of Commons on 21 March asked the Chancellor to comment on allegations of money laundering against British banks. Simon Kirby, Economic Secretary to the Treasury, took the question, and said FCA and the NCA would be investigating closely whether recent media reports of money laundering from Russia would require […]

BOE’s Independent Evaluation Office reviews PRA’s approach to its insurance objective

The Bank of England’s Independent Evaluation Office (IEO) has published its evaluation of the PRA’s approach to its insurance objective. The PRA’s insurance objective is to contribute to the securing of an appropriate degree of protection for policyholders. While the IEO did not find any evidence to suggest that the PRA is not meeting its policyholder […]

PRA Chief Executive Officer delivers speech on insurance supervision

On 20 March 2017, Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA delivered a speech on insurance supervision at the PRA. Mr Woods commented that a precondition to the success of the UK’s world leading insurance sector is world-class insurance supervision, which is what the PRA aims to deliver. […]

PSD2 and Open Banking

We have written an article for Compliance Monitor on PSD2 and Open Banking, looking specifically at the role and future regulation of third party payment service providers.

BoE speaks on ethics and culture in banking

Mark Carney has spoken on the work to improve the culture of the banking industry. He commented that the banking industry has suffered twin crises of solvency and legitimacy. The solvency problems are being addressed by significant regulatory reforms to make banks more liquid, more focused and stronger. Meanwhile, multiple examples of misconduct have led many […]

JMLSG consults on new guidance

JMLSG is consulting on revisions to its guidance, in light of the proposed new legislation implementing MLD4. The consultation covers changes to part 1, and includes a marked up version of each chapter. JMLSG says it has taken the opportunity not just to align the guidance with the draft MLR 2017 but also to make […]

Government responds on Brexit report

Treasury has responded to the EU Financial Affairs Sub-Committee’s report on Brexit: Financial Services. The report, published in December, highlighted among other things the importance of agreeing a transitional period for financial services within the Brexit negotiations, so there was no cliff edge. The Government response confirms the plan to establish a relationship with the […]

Consultation on cheque imaging

The Cheque and Credit Clearing Company is consulting on the technical design of the Image Clearing System (ICS) need to meet the introduction of new technology later this year that will enable faster processing of cheques and other paper payment instruments. CCCC is now seeking views on the contractual arrangements it proposes, comprising participant agreements, […]

FCA warns on debt permission limitations

FCA has warned full permission firms with debt adjusting or debt counselling permissions with “no debt management” limitations that they should review the limitations to check they are appropriate. It says the limitation is not appropriate for firms that, for example, settle and refinance customers’ existing debts, as this would be likely to be a […]

MiFID 2 essential checklist

We have written an article for setting out a MiFID 2 essential checklist for arrangers/advisers and wealth managers.

PRA’s Deputy Governor and CEO responds to Treasury committee call for further evidence on EU insurance regulation

Sam Woods, the PRA’s Deputy Governor and CEO, has published a letter addressed to the Treasury Committee on EU insurance regulation. The letter is a preliminary response to requests by the Committee for further evidence on the following: the PRA’s view in relation to the 23 areas recommended by the Association of British Insurers (ABI) […]

ICO fines credit broker for unsolicited texts

The ICO has fined a credit broker £20,000 for sending unsolicited communications in breach of regulation 22 of the Privacy and Electronic Communications (EC Directive) Regulations 2003. Munee Hut markets its services partly through affiliates that send marketing texts that direct recipients to Munee Hut’s website.  Between mid-2015 and spring 2016, 885 complaints were made about receipt […]

Treasury speaks on Fintech

Simon Kirby, Economic Secretary to the Treasury, spoke at the LSE Global Fintech Investor Forum where he emphasised UK dominance in Fintech innovation. Mr Kirby gave three examples of what others envy in the British system: FCA’s regulatory sandbox, the Bank of England’s Fintech Accelerator and the Fintech Delivery Panel. He also mentioned the Open […]

FCA speaks on culture

Andrew Bailey has given a speech at the Hong Kong Monetary Authority (HKMA) Annual Conference for Independent Non-Executive Directors in Hong Kong. He spoke about the culture in financial institutions, setting out what he meant by culture, what he sees as the respective roles of firms’ governing bodies and management and public authorities, and two […]

BoE Fintech Accelerator launches new community

BoE’s Fintech Accelerator has launched a new community for fintech-related organisations. It wants to help these organisations shares developments and insights, and for them to ensure BoE is engaging with firms from across the sector. It plans between two and four meetings per year with community members, with quarterly networking and knowledge-sharing events. BoE has […]

FCA consults on PEP treatment

FCA has published a guidance consultation on treatment of PEPs under the draft 2017 MLRs. FCA is obliged to issue the guidance, which it says it has prepared using information it has on when firms have not applied CDD measures that were proportionate with the risk a PEP posed. The draft guidance stresses that is […]

BEIS looks at cutting AML red tape

BEIS has published a summary of views and evidence submitted to the Cutting Red Tape review of the AML and CFT regime. Comments were mainly around: large, often confusing and sometimes duplicated amounts of supervisory guidance, which sometimes fail to make clear what is a legal requirement and what is good practice cause firms to incur […]

Treasury consults on MLR 2017

Treasury has published its feedback to its consultation on implementing MLD4 into UK law and the draft Money Laundering Regulations 2017. We will cover the consultation in more detail in a separate article. They key points, however, include: that the turnover threshold for those who engage in financial activity on a limited basis will increase […]

BSB report shows areas for improvement

The Banking Standards Board’s first annual review has found some good practices across the banking industry, but also several areas that need improvement. Firms generally still need to work on responsiveness, accountability, personal resilience and openness. BSB plans to work with firms over the next year to help them improve.

Treasury updates AML advisory

Treasury has updated its money laundering advisory notice, following the FATF plenary in late February. North Korea and Iran remain jurisdictions in relation to which firms should apply enhanced due diligence measures, with Afghanistan, Bosnia and Herzegovina, Ethiopia, Iraq, Lao PDR, Syria, Uganda, Vanuatu and Yemen also highlighted as jurisdictions in relation to which enhanced […]

IAIS highlights Fintech impact

The International Association of Insurance Supervisors (IAIS) has published a report looking at the possible impact of Fintech on key parts of the insurance industry. It says innovations could fundamentally change the way in which the sector serves policyholders, so regulators must be alert to changes and risks. IAIS is concerned Fintech may reduce competitiveness […]

EP Committees publish MLD5 report

The latest version of the report from ECON and the Committee on Civil Liberties, Justice and Home Affairs on MLD5 includes the following proposed amendments: a recommendation to consider setting a limit to cash transfers and a suggestion this should be reviewed 2 years after the Directive takes effect; highlighting the importance of compliance at […]

PSR looks forward to increased payment systems access

PSR’s annual report on access and governance of payment systems looks forward to new providers getting direct access to the interbank payment systems in the next year.  It hopes this will improve competition in payment services and high street banking and therefore be good for consumers. Hannah Nixon said PSR expects the new entrants to […]

UK and Japan to co-operate on innovator firms

In the latest co-operation agreement between UK and AsiaPac regulators, FCA has exchanged letters of co-operation with the Japanese Financial Services Agency, under which the regulators will provide a regulatory referral service for innovative firms wishing to enter the Japanese market from the UK and vice versa.

Commission adopts PRIIPs delegated act

The European Commission has finally adopted the delegated Regulation on RTS under the PRIIPs Regulation, specifying the presentation, content and format of the PRIIPs KID, the methodology for presenting risk and reward, the conditions for reviewing the KID and how to comply with the requirement to provide it to retail investors. The Commission originally adopted […]

Spring budget recommendations for regulators

Philip Hammond’s Spring Budget has not sprung any surprises on financial regulation. The Chancellor is required to write to FCA and PRA (to be operated by the Prudential Regulation Committee) each year with recommendations, and has accordingly done so. The letter to FCA applauds FCA’s work to date, and highlights that: the Government is particularly […]

SFO speaks on DPAs

Ben Morgan of the SFO has reflected on the use of DPAs in bribery and corruption cases. He stressed that it is not the UK’s stance merely to require corporates to give back illegal gains – there must be an additional element of punishment and deterrence. He spoke first of the Standard Bank DPA, which, […]

FCA heralds SMR 1 year on

FCA has noted the anniversary of the SMR taking effect, as the rules on regulatory references now come into force. Firms also had to have issued certificates for all staff who fall within the certification regime, and the Conduct Rules now apply to all staff except those in purely ancillary functions. FCA is in principle […]

IA updates authorised funds guidance

The Investment Association (IA) has published an updated version of its guidance for members on authorised funds. This is a document designed for use by investors who are considering investment in a UK authorised fund and for firms to use in answering their questions.

Dormant assets scheme to expand?

The Independent Dormant Assets Commission has published a report which looks at whether the current dormant asset scheme, which includes funds in banks and building societies, could be extended to other types of assets. These include insurance products, stocks and shares, and pensions that have been classed as dormant. The Commission’s review concludes that: there […]

FCA consults on IDD implementation

Following the publication of the Treasury’s consultation on 27 February 2017, the FCA has published the first of its two-part consultation on the transposition of the Insurance Distribution Directive (IDD) which must take place by 23 February 2018. The IDD will replace the Insurance Mediation Directive (IMD). The FCA’s first consultation paper covers its proposals […]

FCA publishes quarterly consultation

FCA’s latest quarterly consultation, quarterly consultation no.16 proposes changes to: DEPP and EG reflecting the FCA’s powers following the Bank Recovery and Resolution Order 2016:  these would set out the decision-making procedure to be followed for decisions made under the amended sections of FSMA by the BRR order around removal of directors, senior executives and managers;  MAR […]

FCA concerned on dealing commission use

FCA is concerned that firms  are failing to meet expectations on use of dealing commission. It carried out a review of 31 investment managers, to see how they had responded to its 2014 discussion paper on the use of dealing commission. Following the review, FCA is particularly concerned about poor practices for paying for research, research budgets, research […]

FCA concerned on best execution

FCA has warned investment managers it may take further action after finding that they have failed to meet expectations on securing best execution for their clients. FCA is concerned the majority of firms have not taken proper note of its thematic review on the topic in 2014. Many firms had not conducted a good gap analysis since […]

In the FCA pipeline

FCA has updated its policy development webpage for March 2017. Key publications due before the summer include: March/Q1 2017: IDD Implementation – CP1 MAR 1 changes: inside information relating to commodity derivatives CP on new rules for firms running crowdfunding platforms CP on redress methodology for pension transfers CP on creditworthiness and affordability in consumer credit […]

ICO and FCA hold big data use forum

The Information Commissioner’s Office (ICO) and FCA have published a summary of their forum on the use of Big Data in retail general insurance. The forum, held on 16 January 2017, was to engage with the insurance industry following stakeholder concerns raised as part of FCA’s call for input, on which it published a feedback statement […]

BoE makes “PRC” terms of reference

The Bank of England published terms of reference for the Prudential Regulation Committee (PRC). The PRC has responsibility within the Bank for exercising the Bank’s functions as the PRA under the amended Bank of England Act 1998. The terms of reference include: the membership of the PRC; details of the statutory responsibilities (PRC setting the […]

FCA makes final PPI complaint rules

FCA has published a policy statement on PPI complaints, setting out feedback on its consultation paper and final rules and guidance. Alongside this, FCA published an information sheet outlining the new basis for making a PPI complaint and updated its webpage on how to claim back money on the sale of PPI. The consultation, which […]

European Commission speaks on Fintech

European Commission Vice President Valdis Dombrovskis spoke at a Fintech and Digital Innovation Conference. He noted the need to keep up with change and for regulators to fully understand new technologies and regulate proportionately without creating market barriers. He said the Commission would shortly be publishing its action plan, which would address measures it would take […]

FCA writes to P2P CEOs

FCA has written a Dear CEO letter to firms that operate loan-based crowdfunding platforms that facilitate loans to lending businesses. It highlights that if a lending business borrows through a platform and then lends money to others, it may be accepting deposits for the purposes of the RAO, and thereby committing a criminal offence if […]

Treasury updates on financial advice

Treasury has published the outcome of its consultation on the definition of financial advice. It has decided to amend the definition so that: regulated firms will be giving advice only where they provide a personal recommendation; but the wider (current) RAO definition of “advising on investments” will remain to define the regulatory perimeter. Treasury believes […]

BSB publishes certification guidance

The Banking Standards Board (BSB) has published good practice guidance for banks and building societies putting in place procedures to assess the fitness and propriety of staff under the Certification Regime. This takes the form of a high-level set of principles on the assessment of fitness and propriety. The BSB has also issued supporting guidance on […]

ECON votes for consumer access to BO information

ECON and the Civil Liberties committee in the EP are pressing for further amendments to MLD4 to allow EU citizens to be able to access registers of company beneficial owners without having to show they have a “legitimate interest”. They also called for a public register showing the beneficial owners of trusts.  Other changes discussed included requiring virtual […]

PSR to look at push payment risks

The PSR has published draft Terms of Reference for a project looking at the potential for payment system operators (PSOs) to play a role in minimising consumer harm caused by authorised push payment (APP) scams in the UK. This follows the super-complaint submitted by Which? that made it clear the CHAPS and FPS operators do […]