Monthly Archives: May 2017

Commission to amend PSD2 RTS

The Commission has written to the EBA explaining why it plans to amend the draft RTS under PSD2 on customer authentication and standards of communication. The key areas of change are: to ensure statutory audit of the risk analysis methodology; a new exemption to the application of strong customer authentication for certain corporate payments which […]

ESMA updates MiFID 2 FAQs

ESMA has updated its set of FAQs on MiFID 2 to address issues relating to market structures, commodity derivatives and transparency. It has also published its opinion on transparency and position limit regimes for instruments traded on non-EU trading venues.

ABI speaks on UK insurance industry

The ABI has spoken on the opportunities regulation can offer for the industry, which are getting wider – for example, willingness of the industry to see the competition regulator becoming involved in their markets.  A key transformational project has been Flood Re and it has helped insurers to work with the Government. Key current points, in […]

ESAs consult on group wide AML standards

The ESAs are consulting on RTS for firms in groups straddling the EU and third-countries, where the law of a third country prevents the implementation of group-wide AML/CTF policies in branches or majority-owned subsidiaries.  Consultation closes on 11 July. The ESAs propose that firms must: at least assess the ML/TF risk to their groups and […]

Presidency publishes money laundering crimes general approach

The Presidency has confirmed to the Council the general approach to the Directive on countering money laundering by criminal law.  It has also published the consolidated compromise text of the proposed Directive.  The Presidency now asks the Council to reach a general approach, as the basis for discussions with the European Parliament. The Directive sets out […]

ESMA sets out principles for regulating migrating UK firms

ESMA has published a set of principles that the regulators in the “EU27” should follow when assessing applications from UK institutions seeking an EU authorisation post-Brexit.  Key principles include: that no authorisation will be automatically “grandfathered”; that no institutions should be able to operate as a “letter-box” – so all outsourcing and delegation must be […]

ESMA updates MAR Q&A

On 30 May 2017, ESMA published an updated version of its Q&A on the Market Abuse Regulation.

FATF FinTech and RegTech forum 2017

On 30 May 2017, the Financial Action Task Force (FATF) published a summary of its FinTech and RegTech forum, which was held on 25 and 26 May 2017. The forum discussed developments in FinTech and RegTech, including peer-to-peer transfers, crowdfunding, distributed ledger-technology or blockchain-based services, analytical tools, KYC utilities and digital identity.

The European parliament’s committee on economic and monetary affairs (econ) calls on commission to present legislation to protect whistle-blowers

In a draft opinion published on the 23 May, ECON  says there is a need to ensure whistle-blowers are able to report not only illegal activities but also wrongdoing and any information in the public interest. The draft opinion says whistle-blowers should be free to report both internally within the workplace, and externally, and should […]

eiopa to publish guidance on sound principles for authorisation and supervision in light of brexit

EIOPA’s (European Insurance and Occupational Pensions Authority) head of policy, Manuela Zweimuller, has announced at a conference that EIOPA will publish the guidance with a view to arming national regulators against the risk of regulatory arbitrage that may be on the radar of member state politicians.        

ESMA updates funds FAQs

ESMA has updated its FAQs on the AIFMD and the UCITS Directive. Both address the exemption for intra-group transactions for the purposes of EMIR. The AIFMD set also addresses notifications of AIFs domiciled in another Member State and on reporting to supervisors on the breakdown between retail and professional investors.

New Prospectus Regulation

We have written a summary of the Prospectus Regulation as adopted by the EU Council on 16 May.

Why banks are partnering with fintechs

Bond Dickinson’s new economic study looks at the volume of investment by financial institutions in UK SMEs. It found financial services is far ahead of any other UK industry. The report looks at volumes of investment and considers why financial services is ahead of the field.

ASA says fx ad breaches Code

The ASA has found a TV advertisement for online CFD trading breached the BCAP Code in respect of social responsibility. The advert showed a young adult waking up and looking at his tablet which showed a falling exchange rate and a voice-over stating the young man was a risk seeker. It then showed him checking […]

Wolfsberg Group updates PEP FAQs

The Wolfsberg Group has updated its 2008 FAQs on PEPs. The new guidance clearly positions the PEP control framework within the risk based approach, and suggests an appropriate tailored manner of dealing with PEPs. It notes  that although the definition of PEP is becoming wider, it is still appropriate for financial institutions to focus their […]

FSB and CGFS publish joint report on the functioning of FinTech credit markets

On 22 May 2017, the Financial Stability Board (FSB) and the Committee on the Global Financial System (CGFS) published a report on FinTech credit. FinTech credit – that is, credit activity facilitated by electronic platforms such as peer-to-peer lenders – has generated significant interest in financial markets, among policymakers and from the broader public. Yet […]

ESMA reports on fair, clear and not misleading information supervision

ESMA has published a report following up on its criticisms of how certain national regulators were supervising compliance with the MiFID rules on fair, clear and not misleading information. ESMA had identified 10 national supervisors whose practices were deficient. It has found that 6 regulators have now addressed the deficiencies, but it still has concerns […]

MLD5 update

We have written an article on the current state of play of the MLD5 proposals.

EBA consults on outsourcing to the cloud

EBA is consulting on regulatory expectations when firms outsource to the cloud. It wants to identify a set of key principles that all credit institutions and investment firms should follow, and which all regulators should apply. The paper focuses on five key areas for recommendation:  the security of data and systems the location of data […]

BoE updates Fintech accelerator

BoE has updated its Fintech accelerator page, to reflect that its latest call for applications is now closed. The page also outlines the current proofs of concept that currently form part of the accelerator programme.

ESMA speaks on Regtech

ESMA has spoken on how the financial services industry has adopted Regtech. Patrick Armstrong looked at the changes in how we work that have been subject to almost constant change in the past 10 years. Yet, he said, many institutions that survived the financial crisis still have in place antiquated IT systems that are ineffective, […]

FCA publishes assessing suitability review

FCA has published the findings of its review into the suitability of advice given by firms on pensions and investments.  The review started a year ago, and assessed over 1,000 pieces of advice given by 650 firms for compliance with the COBS suitability and disclosure rules. FCA was pleased with the results on suitability, that showed […]

EP adopts Fintech resolution

The EP has adopted a resolution on the influence of technology on the financial sector. The provisional version of the resolution focuses on the rapid development of applications of fintech technologies and notes that some may become of systemic importance. It looks at the benefits and risks of the developments and notes that some applications […]

EP rejects AML high risk list again

Unsurprisingly, the European Parliament has again rejected the Commission’s proposed list of high risk third countries under MLD4.

FCA proposes guidance on insurance Part VII transfers

FCA has issued guidance on its approach to reviewing insurance business transfers schemes under Part VII of the Financial Services and Markets Act 2000. While the PRA leads the Part VII process, the FCA also has a role.  Chapter 2 – Sets out some initial considerations for firms before contacting the FCA and what firms […]

FCA updates on PRIIPs

FCA has updated its website with examples of products it considers will, and will not, be PRIIPs, and explaining the duties of manufacturers, distributors and advisers in relation to them.

Article on the implementation of IDD

We have written an article for Compliance Monitor on the implementation of IDD, looking specifically at consultations by HM Treasury and the FCA on the proposed changes to UK law and regulation.

PRA updates policy statements on accountability regimes

Following feedback received on Consultation Paper 34/16, PRA has published its policy statement on strengthening individual accountability in banking and insurance: amendments and optimisations. The updates in the policy statement include: the final rules amending the Senior Managers and Certification and Senior Insurance Managers Regime; updates to Supervisory Statement 28/15 Strengthening individual accountability in banking and […]

PSR publishes contactless mobile payments page

The PSR has published a new webpage explaining the work it is doing on contactless mobile payments. It says it has noted how the growth in this type of payment could affect its statutory objectives and will publish an update in the autumn to outline the work it has done better to understand the issues […]

FCA and SFC to co-operate on Fintech

FCA and the Hong Kong Securities and Futures Commission have signed a MoU to co-operate with each other on information sharing and referrals of innovative firms wanting to enter each other’s markets. This is the latest in a series of Fintech MoUs FCA has signed with AsiaPac regulators, including the recent MoU with the Hong […]

FCA to undertake retail banking review

FCA has announced it is to undertake a review of the retail banking market, in order to enhance its understanding of the state of competition and conduct in that market. It has identified the need better to understand the business models banks use, focussing on competition issues, understanding the costs incurred in the free-if-in-credit banking […]

Compliance Register Summit 21 June

Emma Radmore will be presenting the opening address on a MiFID 2 update at the Compliance Register’s Regulatory Summit on 21 June.

JMLSG consults on updated guidance parts 2 and 3

JMLSG is consulting, until 26 May, on updates to parts of its guidance within parts 2 and 3.  It has already published a mark up of part 1 of the guidance for comment.  Certain parts of part 2 have not been changed (yet, although the entire part will be updated with new references in due […]

FCA updates on qualifications

FCA has published a Policy Statement setting out its final updated appropriate exam standards for qualifications listed in TC. It has now published the updated list with guidance and more easily navigable tables.

EBA publishes PAD standards

EBA has published its final draft technical standards under the Payment Accounts Directive on standard terminology for services linked to a payment account, and standardised formats and common symbol of the Fee Information Document and Statement of Fees. There are 8 standardised terms with consumer-friendly definitions, and payment service providers will have to use the […]

The European Data Protection Supervisor publishes 2016 Annual Report

Giovanni Buttarelli, the European Data Protection Supervisor (EDPS) presented the EDPS Annual Report 2016 to the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs on 4 May 2017. By way of reminder, the EDPS is the EU’s independent data protection authority, tasked with ensuring that the institutions and bodies of the EU respect […]

Up next from FCA

FCA’s latest Policy Development Newsletter promises only a policy statement on enhancing COB rules for firms providing CFDs to retail clients following before the end of June. Many other papers are due later in the year, or with a publication date to be confirmed.  Strangely (in the version published on 5 May), there is no […]

ECB warns that relocating banks need to act fast

Ms Lautenschläger (Vice-Chair of the Supervisory Board of the ECB) made the remarks whilst a technical workshop hosted by the ECB for banks considering relocating as a result of Brexit. Lautenschläger stressed that relocating will require significant and highly efficient planning efforts as well as resources. Lautenschläger made it clear that the European regulators would not […]

EP may reject MLD4 high risk list – again

The Economic and Monetary Affairs Committee and the Civil Liberties, Justice and Home Affairs Committee have again rejected the Commission’s list of high-risk jurisdictions under MLD4. This is maybe not surprising, given the Commission had made only one change from the previous version, and the Committees’ opinion is that the Commission should not just follow […]

Commission recommends Brexit negotiations

The College of Commissioners has sent a recommendation to the Council to open Article 50 negotiations, following on from the political guidelines adopted a few days ago. The negotiating directives focus on: safeguarding the rights and status of citizens and their families; agreement on the principles of the financial settlement (before anything else); not undermining […]

ASA holds against Santander card ad

The ASA has ordered Santander not to show a credit card advertisement again in its current form. The TV advert, aired last November, showed various scenarios including people looking at holiday photos, choosing games and discussing finances. A voiceover stated benefits the All in One card would give, including cashback on all purchases, no fee […]

Council does not object to MLD4 high-risk list

The Council has decided not to object to the Commission’s revised list of high-risk jurisdictions for the purposes of MLD4. This means the Regulation can enter into force unless the European Parliament objects. The list is as originally suggested by the Commission except that Guyana is deleted and Ethiopia takes its place.

FCA updates on duty of responsibility

FCA has published guidance in DEPP on how it will enforce the duty of responsibility.  The guidance is already in force, applying from 3 May. It applies to UK banks, building societies, credit unions, PRA-designated investment firms, and incoming branches of overseas firms, and their Senior Managers. A new rule explains when FCA can take […]

FCA makes whistleblowing rules for foreign bank branches

FCA has made its final rules on whistleblowing requirements for UK branches of foreign banks.  The rules cover UK branches of both EEA and third-country banks and require them to implement whistleblowing rules by 7 September. FCA made only minor changes from its consultation version. Under the new rules, firms must tell their employees of […]

FCA makes CRD IV remuneration guidance

FCA has made its final rules and guidance on remuneration in CRD IV firms, which it has aligned to EBA guidelines. The changes take effect immediately, since the EBA guidelines came into force at the beginning of 2017. Firms should ensure they comply with the new standards for the 2017 performance year onwards.

FCA makes conduct rules for NEDs

FCA has made its new rules applying individual conduct rules to NEDs in the banking and insurance sectors. The new rules, which take effect on 3 July, apply the provisions of COCON to “standard” NEDs in the banking and insurance sectors. It has not made any changes to its proposals, but noted respondents’ requests to […]

PPI: the final countdown

We have written an article on the new timescale for handling PPI complaints, the FCA’s customer communications campaign and its new rules on writing to customers whose complaints have previously been rejected and the consequences of the Plevin decision.

EU Council publishes Brexit negotiation guidelines

The European Council has published its guidelines following the UK’s Article 50 notification. It notes the uncertainty that Brexit will mean for individuals and businesses in the UK and the rest of the EU and says the Union will maintain its unity throughout the exit negotiations and will “act as one” with the aim of […]

FCA makes PRIIPs disclosure rules

FCA has made the rules that will change disclosure requirements on application of the PRIIPs Regulation, which should be from 1 January 2018.  FCA has provided as much clarity and certainty as it can, to help firms prepare for the changes. The paper includes feedback on FCA’s consultation, and guidance on whether certain products will […]