Monthly Archives: April 2017
PRA has published its policy statement with relevant supervisory statements and rule changes in relation to MiFID 2 implementation. The changes: introduce new PRA rules to implement the MiFID 2 requirements on the management body and organisational requirements; delete several rules that are now superseded by the directly applicable Level 2 Regulation on organisational issues […]
The Criminal Finances Act got Royal Assent on 27 April, following its Parliamentary “ping pong”. We await official publication of the Act.
EIOPA publishes thematic review on monetary incentives and remuneration between insurers and providers of asset management services
EIOPA has published its thematic review on consumer protection issues in the unit-linked market emerging from the business relations between providers of asset management services and insurance undertakings. The review collected evidence from a sample of 1,800 underlying investment vehicles used by insurance undertakings in the structuring of unit-linked funds across 28 Member States. The […]
EIOPA calls for evidence following European Commission’s 2nd request for technical advice on Solvency 2 Delegated Regulation
EIOPA is seeking responses on the treatment of unlisted equity and debt without an External Credit Assessment Institution rating in the standard formula. This request is further to the European Commission’s request for advice on the same. EIOPA will prepare draft advice to the Commission following any feedback received and plans to start a consultation in November 2017 […]
Economic and monetary affairs committee MEPs want the EU to accelerate the development of financial services enabled by new technologies (FinTech). Their key priorities are: Cybersecurity and data protection: the need for end-to-end security across the whole financial services value chain and to create more awareness among the consumers regarding the value of their personal […]
It looks like the Criminal Finances Bill will get Royal Assent before the snap general election. On 25 April, the House of Commons debated the House of Lords’ suggested changes in “ping pong” and approved them. All that remains is now formal Royal Assent.
PRA has made policy statements and rules requiring UK branches of non-EEA banks and insurers to tell their staff about the PRA and FCA’s whistleblowing services. Any non-EEA bank that has both a branch and a subsidiary in the UK must also tell its branch staff about the whistleblowing procedures the subsidiary has in place. […]
FCA has published the first set of complaints data (covering the second half of 2016) that firms have reported since last year’s rule changes that give firms 3 days to address a complaint to a consumer’s satisfaction but the data reflects all complaints. Because of the change in complaints captured, the figure (3.04m) is higher […]
We have written an article on how the FOS interpreted a complaint on a claim on a life insurance policy in relation to an individual later found to have been in the early stages of dementia when he bought the policy. The case looked at the distinction between where (as was the case here) the insurer […]
Valdis Dombrobskis has spoken on the challenges for EU financial services policy. He noted that the positivity of the European economic recovery is tempered by uneven progress across Member States, even before the “defining and challenging” moment of a Member State leaving the EU. He said Brexit had the potential to cause disruption of all […]
FCA has finalised its guidance on the treatment of customers with mortgage payment shortfalls. The guidance addresses how firms should remediate for customer who may have suffered because of the way some firms calculate monthly payments. FCA made few changes following its consultation on the guidance, which effectively stops firms from using “automatic capitalisation” of […]
The Government has published a White Paper looking at what legislative changes the UK will need to make to preserve and continue the sanctions regime after Brexit. Currently, the UK implements most sanctions-related powers through the European Communities Act, and most sanctions apply directly to UK persons through EU Regulations. The paper explains that the Great […]
The Lloyd’s Market Association has published an update to its jointly prepared guidance on consumer wordings for managing agents. The guidance has been updated in the following areas: Claims handling – clarification added regarding insured’s duty to mitigate the loss; Data Protection (GDPR) – placeholder added; Rights of Third Parties – further clarified Third Parties (Rights […]
The Lloyd’s Market Association has published a model clause as guidance for its Members. The clause is designed to enhance contract certainty on the occurrence of an event associated with membership of the European Union or economic or monetary union in the European Union, such as Brexit.
The ICO has fined Monevo Limited, a finance brokerage firm, £40,000 for sending unsolicited marketing texts without proper consent. Between April 2016 and June 2016, the company sent 44,172 texts encouraging people to apply for loans and 130 complaints were made, prompting the ICO investigation. Under the Privacy and Electronic Communications (EC Directive) Regulations 2003, […]
The UK Government has launched a Call for Views on the derogations (exemptions) from the EU General Data Protection Regulation (GDPR), which comes into force on 25 May 2018. Although there is limited scope for flexibility, the GDPR does allow member states to exercise their discretion over how certain provisions of the GDPR will apply […]
We have prepared a commercial insurance timeline which highlights key legislation, regulation, cases and other developments that impact on the industry. This timeline covers developments from March 2017 onwards.
FCA’s latest Mission and Business Plan contain few surprises, but indicate a lot of work in diverse areas. The Mission, which takes into account stakeholder views, seeks to explain to firms how and why FCA prioritises its focus to meet its statutory objectives. It stresses that it regulates to promote the public interest and with […]
The RTS on the presentation, content, review and revision of the PRIIPs KID have been published in the OJEU and will take effect from 2 May.
FCA has published an occasional paper that looks at the behaviour of consumers and the consequences it has on their reaction to financial promotions. The paper considers: how consumers will look for and find promotions how ways of presenting information may play on consumers’ behavioural biases and have the potential to mislead how certain techniques […]
FCA has published a series of new webpages following its annual conduct meetings with the largest firms in the regulated community. It asks the largest wholesale banks the following 5 conduct questions: What proactive steps do you take as a firm to identify the conduct risks inherent within your business? How do you encourage the […]
The EP is to debate the Commission’s revised draft Delegated Regulation under MLD4 that identifies high-risk third countries. The Commission has removed Guyana from its list and added Ethiopia. EP has asked for more time to consider the amended draft (having rejected its predecessor).
Treasury has made the Regulations which will increase the maximum penalties for breach of EU financial sanctions to mirror the maximum for breaches of sanctions under UK domestic legislation. The higher limits will apply from 2 May.
FSCS has announced its levy for 2017/18. The £363m is less than forecast in the FSCS’ 2017/18 Plan and Budget in January, but more than the 2016/17 levy. The 2017/18 levy includes: no change to the £100m levy on life and pensions advisers; £5m more to be paid general insurance intermediaries than FSCS forecast in January; and […]
PRA has asked the UK’s largest general insurers to provide information about the impact of a range of stress tests on their projected Own Funds, as well as providing additional information on their sectoral exposures to the UK economy. The purpose of the exercise is to enable the PRA to assess the potential impact of severe […]
FCA has published the Progress Report reporting on the progress towards implementing the FAMR recommendations. The FAMR final report set out 28 recommendations which are addressed in the progress report. The Financial Advice Market Review (FAMR) was launched in August 2015 to explore ways in which government, industry and regulators can take individual and collective steps […]
On 10 April 2017, Christopher Woolard, the FCA’s Executive Director of Strategy and Competition delivered a speech at the Innovate Finance Global Summit in London. The speech considers the work of the FCA’s Project Innovate to date including the Regulatory Sandbox initiative. Mr Woolard explained the FCA’s commitment to supporting innovation and its desire for […]
The FCA has published a discussion paper on distributed ledger technology (DLT). The discussion paper describes DLT and acknowledges blockchain as a type of DLT. The FCA invites a discussion on two sets of issues: What new risks and opportunities does DLT present to the FCA’s statutory objectives of market integrity, consumer protection and competition? Can DLT […]
On 6 April 2017 the Riot Compensation Regulations 2017 and the remaining provisions of the Riot Compensation Act 2016 came into force, with the former required to implement the Act effectively. The new legislation repeals the Riot (Damages) Act 1886 and makes provision about types of claims, procedures, decision-making and a maximum limit of £1,000,000 on awards […]
The ESAs have published the official translations of the guidelines on the characteristics of a risk-based approach to AML and TF supervision under MLD4. It finalised the guidelines last November, but the translation triggers their national application. The deadline for compliance is 23 June.
ESMA has published a report on notification frameworks and home-host responsibilities under the UCITS and AIFMD regimes. It carried out a study looking at the cross-border management and marketing activities of UCITS and their managers. It found many examples of good practice by supervisors and firms. A similar study looking at the mirroring activities of […]
Sam Woods, the PRA’s CEO, has published a letter seeking contingency plans from firms in light of the UK’s impending withdrawal from the EU. The letter is relevant to banks, insurers and designated investment firms undertaking cross-border activities between the UK and the rest of the EU. PRA expects firms to prepare and execute in […]
FCA has restarted the investigation it originally commenced in 2013, into misconduct within the Impaired Assets team of HBOS based in Reading. It had stopped the investigation while the police were investigating corruption and fraud case involving, among others, HBOS employees. The criminal investigation resulted in convictions for fraud, money laundering and corruption of five individuals.
ESMA has updated its FAQs on AIFMD and UCITS. The additions focus on: clarifying that the AIFMD marketing passport under Article 32 AIFMD can be used only for marketing to professional investors as defined in AIFMD and cannot include any additional categories of investor that individual Member States have introduced (such as “qualifying” or “semi-professional”); and […]
The European Parliament has published its decision not to object to the draft revised RTS on presentation, content, review and revision of the KID for PRIIPs.
Read the full draft text of the principles and conditions here. An overwhelming majority of the house (516 votes in favour, 133 against, with 50 abstentions) adopted a resolution officially laying down the European Parliament’s key principles and conditions for its approval of the UK’s withdrawal agreement. The Parliament covered the following in relation to financial […]
We have written a detailed summary on the late payment of insurance claims provisions of the Enterprise Act 2016, which will come into effect on 4 May 2017. These provisions are likely to have a significant impact on insurers and claims handlers.
The government’s vision is for UK financial services to be the most competitive and innovative in the world, supplementing existing services with greater choice and value for consumers. The innovation plan covers how financial services regulators are adapting and encouraging new technologies and disruptive business models, and better utilising new technologies to reduce regulatory burdens […]
We have written a detailed summary of FCA’s “near final” rules and new MiFID 2 consultation.
FOS’ latest Ombudsman news highlights its plans for the year ahead and current statistics. Its case updates focus on complaints where mistakes or misunderstandings led to consumer loss, and where financial services providers have helped customers in difficulties when their products did not to what the customer expected.
OFSI has reminded firms that it now has power to impose penalties for breaches of financial sanctions, and says it will normally publish details of cases where it imposes them. It has also published guidance on its approach to compliance and enforcement, and on how it will assess whether to impose a monetary penalty, and the […]
Mark Steward, FCA Director of Enforcement and Market Oversight, has spoken on tackling conduct issues and individual and corporate accountability. He gave examples of where parties to investigations had strongly felt a fault within an institution had either been wrongly blamed on an individual when it was an institutional failing, or where an institution felt […]
ESMA has added 10 new questions to its Q&As on investor protection under MiFID 2 and MiFIR. The new questions cover: timing requirements for execution reports; how to report when orders are sent for execution to different entities within a group; inclusion of ECP transactions within data execution venues publish; how investment firms operating OTFs […]
The March Regulatory Digest has been published by the PRA. Top news covered this month: insurance supervision at the PRA – speech by Sam Woods and report by the Independent Evaluation Office (IEO) consultation on its regulated fees and levies rates proposals for 2017/18 reminds firms that requirements related to two aspects of the strengthening accountability regime […]
The former Jeffries International banker (managing director (CF30)) received a 30% reduction to his penalty, still amounting to a hefty £37,198 fine. On a number of occasions between 24 January 2016 and 16 May 2016, Mr Niehaus shared client confidential information which he had received during the course of his employment with both a personal […]
FCA has published the form firms that already hold certain investment-related permissions should use to notify it that they wish to sell or advise on structured deposits once MiFID 2 takes effect. Only firms with permission currently to deal, arrange, make arrangements, manage or advise in or on investments can use the notification. Other firms […]
The Legislative Reform (Private Fund Limited Partnerships) Order 2017 comes into force on 6 April and amends the Limited Partnerships Act to introduce the “private fund limited partnership”. Treasury has introduced the Order despite industry expectation that it would wait for the outcome of a BEIS consultation on how LPs could be used for criminal […]
Under FCA’s definition, credit card customers are in persistent debt if they have paid more in interest and charges than they have repaid of their borrowing, over an eighteen month period. FCA estimates that around 3.3 million people are in persistent debt, with over half (1.8 million) for two consecutive periods of eighteen months. Under […]