Monthly Archives: October 2017
Following its December 2016 consultation for views on how FSCS funding could be reformed, FCA has published a further consultation paper seeking to ensure FSCS continues to provide the right protections, works effectively and is funded fairly. Proposals under consultation include: Merging the Life and Pensions and Investment Intermediation funding classes; Requiring product providers to […]
The European Payments Council (EPC) has launched a three month consultation on the Mobile Contactless Single Euro Payments Area Card Payments Implementation Interoperability Guidelines (MCP IIGs). EPC has updated the MCP IIGs with the help of stakeholders from the mobile contactless payment industry, with the aim of standardising a smooth and secure means of mobile contactless […]
The European Commission (Commission) has published an inception impact assessment on its legislative proposal for an EU framework on crowd and peer to peer finance. The initiative is part of the Commission’s priority of establishing a Capital Market Union, in particular broadening access to finance for SMEs such as innovative companies, start-ups, and scale-ups. The Commission […]
Following receipt of evidence from a range of stakeholders, the Treasury Committee has published its report on Solvency 2 and its impact on the UK insurance industry. The report covers a range of areas including the background to Solvency 2 and the way it has been implemented in the UK, concerns over Risk Margin, proportionality and […]
The European Parliament has published decisions, which raise no objections to the IDD delegated acts on: product oversight and governance requirements for insurance undertakings and insurance distributors; and information requirements and conduct of business rules applicable to the distribution of insurance-based investment products. The Parliament considers that the deadline for transposition of IDD should remain 23 February 2018, […]
The European Commission has published a final report of a study on consumers’ decision-making in insurance services: A behavioural economics perspective. The study sought to explore and understand consumers’ decision-making in the non-life insurance market when purchasing domestically and cross-border, to test remedies aimed at helping consumers make better decisions, and to collect complementary data on […]
The third commencement order made under the Criminal Finances Act 2017 brings into force from 31 October the provisions enabling certain entities within the regulated sector to share information relating to suspicions, and provide a joint SAR to the NCA under POCA or the Terrorism Act.
The European Banking Authority (EBA) has published a consultation on the draft regulatory technical standards (RTS), specifying the framework for the co-operation between competent authorities under the revised Payment Services Directive (PSD2). The proposed framework aims to ensure co-operation between supervision of payment institutions operating across borders by: specifying the procedure for the requests and replies for […]
HM Treasury publishes national risk assessment of Money Laundering and Terrorist Financing Regulations 2017
HM Treasury has published the 2017 national risk assessment (NRA) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) (MLRs). In 2015, the government published its first NRA of money laundering and terrorist finance, followed by an action plan in 2016 where the government set out […]
The FCA has published a new webpage setting out what consumer credit firms need to report in relation to their consumer credit income. The FCA charges consumer credit firms annual fees based on the data in forms CCR002 or CCR007. The webpage outlines what firms need to report to ensure that they are charged the […]
FCA has published a paper on the purpose and scope of its review of the business models used in the retail banking sector. It is now considering what evidence it can best gather to understand: the state of competition and conduct in the markets; how free-if-in-credit banking is paid for and its effects on different […]
The Solicitors Regulation Authority (SRA) has published a consultation paper on changes to its regulatory arrangements to comply with the Insurance Distribution Directive (IDD). SRA is a designated professional body under Part 20 of FSMA, which means SRA-authorised firms can carry out financial services activities which includes insurance distribution activities. Firms carrying on this work […]
The Basel Committee on Banking Supervision has released its Guidelines on identification and management of step-in risk . The guidelines build upon two consultations carried out by the Committee in December 2015 and March 2017. Step-in risk refers to the risk that a bank provides financial support to an entity beyond, or in the absence […]
PRA publishes the first in a series of consultation papers on reform to the implementation of Solvency 2
Following the introduction of Solvency 2 in January 2016, PRA has launched the first of a series of consultation papers on reform to the implementation of Solvency 2. The series begins with a paper on the Matching Adjustment (MA) and sets out PRA’s proposed expectations of firms in this area. PRA has worked closely with […]
The International Association of Insurance Supervisors (IAIS) has published tables showing the status of: the 26 insurance core principles (ICPs), including any ongoing or planned revisions; and the development of the ComFrame material. The tables are designed to keep its members and the public up-to-date on IAIS activities. IAIS plans to update the tables every quarter.
BrightHouse, a rent-to-own company providing household goods to customers on hire purchase agreements, has committed to pay over £14.8 million to 249,000 customers following engagement with FCA. In 2014, FCA had identified BrightHouse’s processes relating to lending application affordability assessment and collections did not always produce good outcomes for customers. In response, the firm has worked to […]
PRA issues policy statement and supervisory statement on Solvency 2: Data collection of market risk sensitivities
PRA has published a policy statement and supervisory statement relevant to PRA-regulated insurance or reinsurance firms that are most exposed to market risks. These are primarily Category 1 and 2 firms in the life sector, and any other category life firm or general insurance firm, or composite insurance firm that demonstrates material market risk exposures. The supervisory […]
On 24 October 2017, HM Treasury published a Call for Evidence to implement a breathing space scheme so that someone in serious problem debt may apply for legal protection from further interest, charges and enforcement action for a period of up to six weeks. The Call of Evidence follows the government’s commitment to encourage consumers to […]
The latest edition of Ombudsman News highlights: FCA’s PPI complaints deadline awareness campaign, and the common questions FOS gets from people looking to complain about PPI. FOS has seen a significant increase in people contacting it about PPI in the last quarter. From here on, it says its workload will depend on how fairly firms […]
The firm is sponsoring the Bristol TechFin 2017 event. Members of our Financial Institutions team will be attending this event, which takes place on 7 November. We hope to see some of you there!
The European Commission (Commission) has announced that it will vote on a proposal to amend the existing Capital Requirements Regulation (CRR) during the October II plenary session. The Commission said that the new framework for ‘simple, transparent, and standardised’ (STS) securitisations has implications for the overall prudential framework for credit institutions and investment firms. The proposal to […]
On 23 October 2017, the FCA published the final notice issued to Merrill Lynch International (Merrill Lynch). Merrill Lynch was fined £34,524,000 for failing to report exchange traded derivative transactions between February 2014 and February 2016. This relates to a breach of Principle 3 (Management and control) of the FCA’s Principles for Businesses and Article […]
The new Sanctions and Anti-Money Laundering Bill (the Bill) was introduced in Parliament on 18 October, following the announcement of the Bill in August. This Bill seeks to enable the UK to continue to comply with the current UN sanctions regime after Brexit, by covering matters currently deal with through the European Communities Act 1972 (which will be […]
The European Security and Markets Authority (ESMA) has published the responses received to the Consultation on Guidelines on certain aspects of the MiFID II suitability requirements. The draft Guidelines are intended to implement enhanced provisions to ensure investor protection. The consultation was therefore of particular relevance to investment firms and credit institutions providing investment advice or discretionary portfolio management services. […]
The Treasury Committee has launched a new inquiry into the UK’s economic relationship with the EU, which amongst other things will consider: Transitional arrangements; Preparedness for ‘no deal’; and The long-term economic relationship. The inquiry is now open, and is accepting written submissions. The first evidence session (to be held 25 October) will focus on the progress […]
On 20 October 2017, the FCA published a report on lessons learned from its regulatory sandbox. As a reminder, the regulatory sandbox allows firms to test innovative products, services and business models in a live market environment, while ensuring that appropriate safeguards are in place. The report contains the FCA’s reflections on how the sandbox […]
In line with its 2017/18 Business Plan, FCA has begun its thematic review of the debt management sector. FCA has taken a particular interest in this sector, owing to the increased risks faced by (particularly vulnerable) consumers where firms fail to meet their needs. In 2014, FCA declared that debt management firms needed to “raise their game” if they […]
In its latest multi-firm review, FCA has reviewed the manner in which general insurance firms have implemented transparency rules in insurance renewals. The rules apply when a firm sends a general insurance renewal notice to a consumer, and came into effect in April 2017. FCA noted ‘a range of concerns’ and identified four key areas […]
After collecting responses from over 13,000 UK consumers, FCA has revealed the results of its largest tracking survey of consumer behaviour and use of retail financial products and services. Aiming to tell the financial story for six age demographics (and key themes of each life stage), the survey found that 50% of the adult population shows one […]
The European Commission has opened a public consultation on broadening law enforcement access to centralised bank account registries, with a view to increasing the speed and effectiveness with which authorities can trace criminal assets and investigate corruption. Targeted at consumers, law enforcement agencies and almost all within the banking sector, the consultation seeks to collect opinions […]
The EBA recently published a table which includes key questions around the Payment Services Directive 2 (PSD2) transposition activities and dates of the different EEA countries. In addition, the EBA has announced the release of two new publications in its ongoing series of working group papers, dealing with PSD2 and distributed ledger technology (DLT) driven opportunities for new […]
The Department for Business, Energy & Industrial Strategy has published a report by the Consumer Protection Partnership (CPP), identifying and prioritising areas where there is greatest harm caused to consumers and setting out the actions taken by the members of the CPP. In 2016 the CPP identified scam calls, digital and online markets, secondary ticketing, and consumer […]
ECON’s call to the Commission to delay the application of the Insurance Distribution Directive (IDD) has been welcomed by Michaela Koller, director general of Insurance Europe. The EU Parliament’s ECON committee recommended the delays to the European Commission, and Insurance Europe hopes a delay would give insurers sufficient time to implement IDD with legal certainty (which, by extension, […]
Further to the July 2017 versions, HM Treasury has published updated October 2017 versions of The Risk Transformation Regulations 2017 and The Risk Transformation (Tax) Regulations 2017, which will provide a new regulatory, supervisory and tax framework in relation to insurance linked securities in the UK.
Further to a public consultation, EIOPA has published a final report on its guidelines for insurance based investment products (IBIPs) under IDD that incorporate a structure which makes it difficult to understand the risks involved. These guidelines apply to execution-only sales under Article 30(3) of IDD. One of the conditions specified in Article 30(3) of […]
The Commission’s consultation on cross border distribution of investment funds closed on 9 October, and the Commission has now published the 62 responses it received.
The Commission has published its formal request to the ESAs to report to it on the cost and past performance of the main categories of retail investment, insurance and pension products. It notes the reporting should be based on what is required under key EU legislation, and appreciates the amount of work is such that […]
The European Commission has invited feedback on whether supervisory reporting requirements in financial services legislation are fit for purpose. It has published a roadmap on which it asks for views by 14 November. The roadmap looks at the work the Commission has done to date and comments it has received, but it says does not prejudge […]
Following the controversy of FCA’s refusal to publish the skilled persons’ report into the treatment of customers in the RBS Global Restructuring Group and its correspondence with the Treasury Committee on the issue, Andrew Bailey has now agreed to the Treasury Committee’s proposal to scrutinise the report. Under the proposal, the Treasury Committee will appoint a […]
ESMA has announced the launch of the second phase of its Financial Instrument Reference Database (FIRDS). It provides access to reference data that will eventually allow market participants to identify instruments subject to the MAR and MiFID 2/MiFIR reference data reporting requirements.
Steven Maijoor has spoken on the state of European financial markets. He spoke not only about Brexit, focussing on the need for a strong supervisory culture, but also on the importance of building the CMU and improving understanding of trends, risks and vulnerabilities in the financial markets. He spoke about the continuing lack of trust […]
The second commencement order for the Criminal Finances Act 2017 brings into force several new provisions, including those on the potential extension of the moratorium period following a SAR and the new procedure for allowing regulated sector entities to share information on suspicions. These parts of the Act take effect from 31 October 2017.
BoE has updated its MoU on resolution planning and crisis management between it, the PRA and Treasury. The MoU clearly sets out the duties of each entity and was last updated in April.
TheCityUK has called on the government to progress the Brexit transitional arrangements as quickly as possible, before firms have to implement their contingency plans because they cannot wait any longer. The paper stresses what is at stake for both the UK and the EU, and calls for an early agreement on transitional arrangements which should be […]
The Government has published a response to the Treasury Committee letter on Brexit and insurance contracts. The letter acknowledges the risk that the UK’s withdrawal could create legal uncertainties as to the status of existing cross-border insurance. The Government has been working with the insurance industry and others in the financial services sector to understand […]
Linda Woodall has spoken at an event to launch FCA’s Occasional Paper on the ageing population. FCA has for some years been aware that the financial services needs of older consumers are generally not being met. Not all older consumers are disadvantaged and not all have the same needs. But, while there is no “one-size-fits-all” […]
The Wolfsberg Group has updated: its Correspondent Banking Due Diligence Questionnaire. The Questionnaire has been around for some years, but this is its first significant and substantial overhaul; and its Payment Transparency Standards. Additional standards have been added to those originally recommended.
The Bank of England (BoE) has confirmed an implementation date of 23 April 2018 for reforms to the Sterling Overnight Index Average (SONIA) interest rate benchmark. The March 2017 reforms will result in the following changes: BoE taking on the end-to-end administration, including calculation and publication of SONIA; the coverage of SONIA being broadened to […]
On 12 October 2017, the Association of British Insurers (ABI) published a blog on the impact of the GDPR on innovation in insurance. The ABI discusses a recent study on “Harnessing Innovation in European Insurance” undertaken by an independent research company, PAC, and BAE Systems. The study reports that “only one third of European insurers believe themselves to […]
FCA has published several new and updated pages on its website with new application forms for firms making applications under PSD2. The updates cover payment institutions, e-money institutions and account information service providers.
The European Banking Authority (EBA) has published final guidelines on the procedure for payment service users and other interested parties to submit complaints against PSPs in respect of alleged infringements of PSD2. The guidelines specify the information competent authorities (CAs) must request from complainants and the information CAs should use in their response to complaints. CAs are now […]
On 12 October 2017, the European Banking Authority (EBA) published an Opinion on issues relating to the UK’s departure from the European Union (EU). The Opinion is focused on the period prior to the departure of the UK. The purpose of the Opinion is to provide guidance on supervisory expectations and to address regulatory and supervisory […]
Dr. Manuela Zweimüller, Head of Policy Department at EIOPA, has delivered a speech on what will the future hold? The European insurance industry in times of major disruption. The speech highlights challenges in respect of InsurTech, Brexit and Regulatory stability. EIOPA considers that the insurance industry needs to reinvent itself in respect of InsurTech and […]
The Bond Dickinson financial services team is delighted to have achieved a Legal 500 ranking. The new directory described the team as providing ‘responsive, practical, commercial and cost-effective’ advice to a wide variety of clients within the retail sector of the financial services industry. It says that “‘Very knowledgeable’ team head Andrew Barber has ‘in-depth […]
The ECON in the EP has voted to harmonise the bail-in hierarchy by supporting the Commission proposal for a new category of “non-preferred” senior class of debt instruments in line with the TLAC standard. The instruments cannot be a derivative or have any derivative component, and will sit between senior liabilities and own funds instruments […]
ESMA has published a set of Q&As on post-trading issues under MiFID 2 and MiFIR. There is currently only one question, on rules for straight-through processing.
The Financial Crime Compliance Professionals Certificate course, hosted by us, will now be on 14 March 2018. For details, please see the Compliance Register’s website.
In a bid to bolster the capital’s reputation for financial and legal services post-Brexit, the City of London Corporation (CLC) has announced its backing for the development of a new court complex on Fleet Street to replace all of the City’s current court services except the Old Bailey. The space will provide for 18 courtrooms and focus […]
Steven Maijoor spoke to ECON as part of the annual hearing of the chairs of the ESAs. He focussed on 3 main priorities for ESMA: MiFID 2 implementation and ESMA’s efforts to ensure regulatory convergence. He highlighted the Q&As and Opinions ESMA has issued with this in mind. He expressed some optimism over ESMA’s readiness to […]
ESMA has published a briefing highlighting the importance of the LEI in an attempt to ensure market participants have done what they need to to comply with the LEI requirements under MiFID 2 by 3 January 2018. Its EMIR experience suggests reporting entities are likely to leave it to the last minute, which would cause […]
On 6 October 2017, the Financial Stability Board (FSB) published its workplan, setting out the following areas of work for the remainder of 2017 and 2018: evaluating the effects of reform – the plenary agreed that the FSB, in coordination with the relevant standard-setting bodies, will undertake an evaluation of the effects of reforms on financial […]
Insurance Europe has published a webpage on cyber insurance and a template for breach notifications under GDPR.
Matt Cullen of the ABI has delivered a speech on the future of the insurance industry. The speech starts by outlining the current climate of political, economic, environmental, social and environmental change as a backdrop against the major challenges and opportunities that the insurance industry may be confronting in the coming years. The speech focuses on […]
Andrew Hauser, Executive Director for Banking, Payments and Financial Resilience, has commented on the work of BoE’s FinTech Accelerator programme since its launch in June 2016. The programme sought to improve BoE’s understanding of FinTech products and firms, and also to give these firms an insight into the questions and needs central banks might have, […]
ESMA’s 2018 work plan continues its focus on supervisory convergence and risk assessment. Unsurprisingly, it will place particular emphasis on consistent application of MiFID 2 and MiFIR by firms and regulators. Its other key work will be around its mandate for the ESA and CCP reviews.
FCA’s latest Policy Developments Update lists several key publications due before the end of the year: policy proposals for next year’s fees and levies policy statement on FSCS funding policy statement on the second part of FAMR implementation policy statement on the second IDD implementation consultation (in December, with the policy statement on the third […]
PRA is consulting on changes to its large exposures rules to provide: enhanced guidance on application of criteria for core UK group and non-core LE group permissions; changing the non-core LE group calibration basis for firms that have both permissions; and changing how the non-core permission applies at UK consolidated group level. Consultation closes on […]
The PRA has outlined proposals on groups policy and double leverage in its latest consultation paper. Groups policy speaks to the distinction between individual legal entities (and the particular jurisdiction they are in) and the broader multi-jurisdictional banking groups of which they form a part, and the difficulties inherent in the PRA regulating both. Groups policy is […]
The European Banking Authority (EBA) has today published its annual work programme in which it announced its strategic priorities for next year and beyond. EBA comments on the Commission’s legislative programme for the year, involving a review of the CRR and BRRD developments and the consequences of the BCBS’ revision of the trading book; the implementation […]
Sam Woods, speaking at Mansion House, commented on what he predicts to be an increasingly prevailing dynamic in financial institutions and financial regulation. Geofinance is the impact of geography on how banks, insurers and regulators operate, and Woods remarks that it “is likely to be the defining challenge of the next few years.” Woods stated “stability begins at home” […]
Andrew Bailey, speaking at Mansion house, looked at some of the challenges FCA faces as financial conduct regulator. He focussed particularly on: consumer credit – particularly on its rapid growth and the role of high-cost credit. He explained what FCA is doing to help those with persistent credit card debt and how it is trying […]
ESMA has updated its FAQs on the AIFMD and UCITS. The AIFMD additions look are remuneration issues, and updates to both sets of guidance look at periodic reporting under the SFTR.
FOS has published feedback to its consultation on changes to the time limits for PPI complaints. It merely confirms the amendment to the Voluntary Jurisdiction in line with FCA’s changes to the Compulsory Jurisdiction. The relevant instrument took effect at the end of August.
FCA has published an undertaking from PPRO Financial Limited to make changes to its prepaid card terms and conditions. The Dutch AFM had referred the matter to FCA after it received complaints from customers under the “Consumer Protection Cooperation Directive). As a result, FCA carried out an investigation and found several problems, as a result […]
ESMA has updated the MiFID 2 FAQs in respect of: investor protection and intermediaries. It has added 12 new questions, focusing on client categorisation, post-sale reporting, recording of calls and communications, best execution, and information on costs and charges. transparency and market structures. On transparency, there are several new questions, particularly on non-equity transparency, the […]
PRA’s latest Occasional Consultation paper proposes minor changes to several modules of its Rulebook. Proposed changes include changes to whistleblowing requirements for UK branches of non-EEA deposit takers, MiFID 2, IDD and BMR forms and CRR and CRD amendments in application requirements. Consultation closes on various dates from 17 October to 9 January.
PRA has published an update on its expectations on firms when they use the IRB approach.
PRA has refined its Pillar 2A capital framework from 1 January 2018 as part of its SREP reviews. It has published a new policy statement and update to its supervisory statement with instructions for reporting.
PRA has published changes to its reporting requirements relating to the leverage ratio, to apply to firms’ reporting and disclosure requirements from end of December 2017 onwards. The changes require banks to exclude from the calculation of total exposure measure those assets which are claims on central banks which are matched by deposits in the […]
FCA has updated on its work looking at how firms are advising customers on defined benefit pension transfers. It had noted the risks that many firms refer their customers to specialist transfer firms. FCA is concerned these transfer firms sometimes give advice without considering the receiving scheme or investments, or knowing the intentions of the […]
We have written an article summarising the key elements of the proposed SMCR extension.
EIOPA has published its Single Programming Document for 2018, highlighting and specifying the activities and tasks for the coming year, within the framework of a multi-annual work programme 2017-2019. EIOPA comments that outcomes of the Brexit negotiations and of the review into the ESAs is still uncertain and has not factored them into its SPD. […]
PRA has published a statement of policy on its approach to setting its minimum requirements for eligible liabilities and own funds (MREL). The statement explains PRA’s approach in relation to going- and gone-concern resources, and its expectations on different size of firms.
BoE has published an update to its “approach to resolution“, originally published in 2014.
FCA has published a draft checklist for firms applying for registration as a benchmark administrator under the BMR.
PRA has updated its forms firms must submit under the SMR. From 12 November, firms must use the following new forms: Long and Short Form As Form E Statement of Responsibilities Third Country Statement of Responsibilities
FCA has updated its website to provide a set of new pages on PSD2. The pages aim to help firms that are: currently regulated as payment service providers currently excluded from regulation under the Payment Services Regulations 2009 or providing services that will fall under regulation for the first time as a result of PSD2.
Stephen Barclay, City Minister, announced the creation of an Asset Management Taskforce to preserve the UK’s leading position as an asset management hub. Among his comments, he said: the Government sees delegation as key going forwards, and is using the Brexit challenge as a spur to spearhead this; it is critical to maintain gold standard […]
ESMA has published its final draft RTS implementing the trading obligation under MiFIR. The standards, part of the move to make OTC trading in liquid derivatives take place on organised venues, covers interest rate swaps and credit default swaps. ESMA has decided to make the following products subject to the trading obligation: Fixed-to-float interest rate […]