Monthly Archives: November 2017

FCA starts misleading pension statements proceedings

FCA has announced the start of civil proceedings against Avacade Limited, which traded as Avacade Investment Options, and Alexandra Associates (U.K.) Limited, trading as Avacade Future Solutions, and against Craig Lummis, Lee Lummis and Raymond Fox. FCA says the firms provided a “pension report service” which, among other things, promoted SIPPs and alternative investments such […]

Treasury Committee seeks LINK assurance

Nicky Morgan, chair of the Treasury Committee, has written to the Chairman of LINK seeking assurances on the continuity of provision of cash machines. There is a proposal to reduce the fee card issuers pay to ATM operators from 25p to 20p per withdrawal and the Committee is concerned this could make some machines not economically […]

ESMA publishes MiFID compliance function peer review

ESMA has published the results of its peer review on the guidelines on certain aspects of the compliance function under MiFID 1.  The review covered a 2 year period and assessed the approaches of 31 NCAs. It included some on-site visits. While ESMA found some divergences in practice, it assessed 27 NCAs positively on their […]

LMG proposal addresses issues of access, control and continuity of service in post-Brexit insurance sector

In light of Brexit-related concerns over continuity of service in the insurance sector, the London Market Group (LMG) has issued a proposal to the UK government detailing a mechanism whereby both the UK and EU are permitted mutual market access and mutual recognition of respective prudential regimes following Brexit. The proposal centres on a free trade agreement […]

FCA issues first statement of objection to asset managers

FCA has issued a statement of objections to 4 asset managers who it believes may have acted in breach of competition law. The statement (which has not been published) is the first time FCA has brought a case using its competition enforcement powers. It says that Artemis Investment Management LLP, Hargreave Hale Ltd, Newton Investment […]

Financial Stability Report, November 2017

The Bank of England (BoE) has published its financial stability report, issue number 42.  The report sets out the Financial Policy Committee’s (FPC), a sub-committee of the BoE’s Court of Directors, views of the outlook for UK financial stability, including the assessment of the resilience of the UK financial system and the main risks to […]

IAIS extends the deadline for comments on various insurance core principles

The International Association of Insurance Supervisors has extended the deadline for submitting comments on various insurance core principles (ICPs) and the ComFrame material integrated with ICPs to: 15 January 2018 in respect of Revised ICP 8 (Risk Management and Internal Controls) and additional ComFrame material integrated with ICP 8; and 31 January 2018 in relation to revised ICPs […]

FSB will not be updating list of global systemically important insurers for 2017

The Financial Stability Board (FSB), in consultation with the International Association of Insurance Supervisors and national authorities has published a statement which explains it has decided not to publish a new list of global systemically important insurers (G-SIIs) for 2017. The FSB comments that the work of IAS in the insurance sector to develop an activities-based approach may […]

EBA repeals its Guidelines on retail deposits subject to different outflows for the purpose of liquidity reporting

On the 27 November 2017, the European Banking Authority (EBA) announced that it has decided to formally repeal its guidelines on retail deposits subject to different outflows for the purposes of liquidity reporting under the Capital Requirements Regulation. The EBA has decided to repeal the Guidelines as they have been superseded by the Liquidity Coverage […]

Credit Unions Act 1979 (Locality Common Bond Conditions) Order 2017

The Credit Unions Act 1979 (Locality Common Bond Conditions) Order 2017 (SI 2017/1144) has been published, along with an explanatory memorandum. The Order makes a change to section 1B(3)(a) of the Credit Unions Act 1979, by increasing the number of potential members of a credit union for the locality common bond from 2 million to 3 […]

Commission adopts PSD2 authentication RTS

The European Commission has finally adopted the RTS under PSD2 on strong customer authentication (SCA) and common and secure open standards of communication. The key purpose of the RTS is to create stringent security procedures to reduce payment fraud levels and protect confidential data. The key requirement is for at least two independent elements in […]

Law Commission finalises Goods Mortgages Bill

The Law Commission has published its final report on the Goods Mortgages Bill. This marks the end of a project that started in 2014, aimed at addressing the problems the outdated Bills of Sale Acts cause for borrowers, purchasers and lenders engaging in logbook loans. The particular problems the new Bill seeks to address are: […]

Government to tax non-residents on UK commercial property disposals

The Chancellor announced in his Budget statement that he intends to bring gains made by non-UK residents from the disposal of UK commercial property within the UK tax net. Our briefing looks at the details of the proposed change, and its effects on managers of real estate funds.

FCA publishes a statement on LIBOR panels

The FCA has confirmed  that all 20 of the panel banks for LIBOR (the London Interbank Rate) have agreed to support the LIBOR benchmark, ensuring the sustainability of the rate until 2021. The confirmation follows Andrew Bailey’s, FCA Chief Executive, speech in July 2017, on the need for a transition period for LIBOR until the […]

Initial coin offerings: regulation and the risks

We’ve written a briefing on recent regulatory warnings about ICOs, and how they may fall within the UK’s regulatory perimeter.

FCA speaks on regulatory priorities for retail banking

At the Westminster Business Forum on retail banking and payments, Karina McTeague, Director of Retail Banking Supervision, delivered a speech on the regulatory priorities in the retail banking sector. She explained FCA’s priorities as articulated in its business plan, and said all have application to retail banking. FCA is looking closely at how retail banks […]

FCA updates on wholesale banks compliance review

FCA has published a note summarising the results of its review of the compliance function in wholesale banks. It had asked 22 wholesale banks (including global banks, medium-sized banks focusing on specific areas or geographies and firms with less significant UK footprints) 27 questions. Key themes included: the need for the compliance function to evolve in […]

Autumn Budget 2017: Key points for the financial services sector

Philip Hammond, Chancellor of the Exchequer, has delivered the Autumn Budget 2017. Key points for the financial services sector include: Asset management – the Government will publish a new long-term strategy to ensure that the UK asset management industry continues to thrive and deliver the best possible outcomes for investors and the UK economy. This will […]

FCA fines former BAML trader for market abuse

FCA has fined Paul Walter, a bond trader formerly with Bank of America Merrill Lynch International, £60,090 for market abuse.  It found Mr Walter created a false and misleading impression about the supply and demand in the market for Dutch State Loans, and did so 12 times in summer 2014.  Mr Walter had entered a […]

ESMA updates MAR FAQs

ESMA has updated the FAQs on MAR. New questions address the requirements around managers’ transactions.

UK based EU agencies agree relocation

The Council has decided on the new locations of various UK-based EU agencies.  In the financial services sector, the EBA will be relocating to Paris.


The draft Business Contract Terms (Assignment of Receivables) Regulations 2017, which had been laid before Parliament on 14 September 2017, have now been withdrawn The draft regulations had been the subject of criticism from the City of London Law Society and other commentators. It remains to be seen whether the government will seek to pass a revised form of […]

Lords put controls in Sanctions Bill

The House of Lords has tabled its list of desired amendments to the Sanctions and AML Bill in advance of its Committee hearing on 21 November.  The Lords is concerned at the amount of power given to Ministers to make secondary legislation and is seeking to impose controls on the ability and rationale for using the powers.

ESAs update PRIIPs FAQs

The ESAs have updated the FAQs on the PRIIPs KID to include a number of new questions, including guidance on: confirming that the categorisation of a retail investor should follow the MiFID 2 definition and not take account of any national categories of “semi-professional” investor or similar; how to categorise credit-linked notes in terms of their […]

Barnier speaks on EU future and Brexit

Michel Barnier, speaking at the Brussels office of the Centre for European Reform, spoke on the EU “standing up for itself”. He said Brexit could be a turning point in what he called the European project. He noted the UK’s voiced strong support for the Single Market in 2012 and said that the stronger EU […]

ABI publishes guide to help firms identify and support vulnerable customers in the long term savings market

ABI has published a guide to help firms operating in the long term savings market better understand, identify and support customers who may be vulnerable, to ensure all customers are supported through the whole customer journey. The guide sets out principles, good practice and case studies. ABI recommends that firms: implement a vulnerability policy or […]

OECD updates guidelines on insurer governance

The Organisation for Economic Co-operation and Development (OECD) has published revised guidelines on insurer governance. The guidelines are non-binding and serve as a reference point for insurers, governmental authorities, and other relevant stakeholders in OECD and non-OECD countries. Key updates relate to matters including: related party transactions at the group level; disclosure of policies relating to […]

Legislative proposals to set the application date of IDD at 1 October 2018

Following the European Parliament’s call to postpone the application of the IDD to 1 October 2018, ECON has written to the European Commission  asking it to take the Committee’s suggestion into account. ECON states in its letter that such a legislative proposal is needed swiftly in order to enhance legal certainty concerning the provisions applicable and to allow for […]

ENISA publishes recommendations on cyber insurance

The European Union Agency for Network and Information Security (ENISA) has published a report on the commonality of risk assessment language in cyber insurance. ENISA comments on the growth of the cyber insurance market and its anticipated further expansion as a result of the General Data Protection Regulation and the Directive on Network and Information […]

Treasury implements Venezuela sanctions regime

The Government has made legislation creating a financial sanctions regime in relation to Venezuela and OFSI has published a financial sanctions notice, although there are as yet no designated persons under the regime. The changes follow an EU decision.

ESMA updates MiFID 2 FAQs

ESMA has issued: a further update to its FAQs on market structure issues under MiFID 2, including on DEA and tick sizes an update to its transparency FAQs, including new questions on a range of pre- and post-trade transparency issues and on third countries; and an update to its FAQs on MiFIR data reporting.

MLD5 negotiations stalled

Reports from the European Parliament say that the last scheduled trilogue on MLD5 ended without agreement, because the Council did not have a mandate to negotiate and there was no text for discussion. ECON expressed its disappointment that the Council “is not ready to undertake serious negotiations”, and said it expected the Council to be […]

David Davis’ speech on the financial services sector post Brexit

On 14 November 2017, David Davis, Secretary of State for Exiting the European Union, gave a speech on the post-Brexit relationship between the UK and the EU relating to the financial services sector. In his speech, Mr Davis focussed on the Government’s approach to its negotiations to leave the EU and what it is doing […]

FCA advises providers of AIS and PIS to apply for authorisation under PSD2

On 14 November 2017, the FCA sent an email to businesses, including firms providing account information services (AIS) or payment initiation services (PIS) advising them to apply for authorisation or registration, under the revised Directive on payment services in the internal market (PSD2), before 27 November 2017. Although majority of the regime will apply from 13 January 2018, the […]

FCA speech on effective compliance with the Market Abuse Regulation

On 14 November 2017, the FCA published a speech delivered by Julia Hoggett, Director of Market Oversight at the FCA, at the ‘Recent Developments in the Market Abuse Regime’ conference. The speech focused on effective compliance with the Market Abuse Regulation. Ms Hoggett highlighted in her speech that: effective oversight and compliance cannot and should not stay still; […]

ESMA publishes MiFID II Q&A clarifying trading obligation for shares

ESMA has updated its MiFID II Q&As to clarify the application of the trading obligation for shares to trade certain instruments on-venue. ESMA confirms that all EU investment firms that are part of a chain of transmission should ensure that the ultimate execution of the order complies with the trading obligation requirements under article 23(1) […]

FCA warns consumers on risks of cryptocurrency CFDs

Following ESMA’s recent warnings to consumers and firms on the dangers of participation in initial coin offerings (ICOs), FCA has continued the regulatory focus on cryptocurrencies by issuing a consumer warning about contracts for differences (CFDs) with cryptocurrencies. CFDs are financial instruments that allow investors to speculate on the price of an asset, and CFDs are […]

FCA consults on fees

FCA has published its annual consultation paper on regulatory fees and levies. Key proposals include: the proposed tariff data FCA will use to calculate insurers’ FCA periodic fees and the FOS levies, building on PRA’s proposals; updating its financial penalty scheme; and how to treat consumer hire agreements in relation to credit-related income. FCA also […]

ESMA warns investors and firms on dangers of ICOs

ESMA has become the latest body to denounce initial coin offerings (ICOs), issuing statements directed at investors and firms highlighting the distinct risks involved. Echoing FCA’s previous warnings , ESMA has focused on the risks of investors to losing all their invested capital, and firms conducting ICOs potentially also carrying on regulated investment activities. Investors are […]

ICO launches new advice service to help small organisations with GDPR preparations

The Information Commissioner’s Office (ICO) has launched an advice line in order to help small organisations prepare for compliance with the EU General Data Protection Regulation (GDPR),  which is due to come into force in May 2018. The phone service is aimed at people running small businesses or charities and recognises the particular problems they face […]

Bank of England publishes a summary of the responses to its white paper on SONIA

The Bank of England (BoE) has published a summary of the responses it has received to its white paper (published in June 2017)  on sterling risk-free reference rates (RFRs). The white paper set out the working group’s thinking on adoption of the Sterling Overnight Index Average (SONIA) interest rate benchmark as an alternative to the London Interbank Offered […]

Capita faces public censure and £66m pay-out

FCA has issued a final notice against Capita Financial Managers Limited (CFM), publicly censuring the firm and ordering it to pay up to £66m in compensation to investors that suffered as a result of CFM’s investment in the Guaranteed Low Risk Income Fund, Series 1 (the Fund), an unregulated CIS of which CFM was the […]

ESMA updates MiFID 2 FAQs

ESMA has updated its set of FAQs on MiFID 2 investor protection. New questions cover: post sale reporting – to confirm that the duty to report on depreciation of portfolios applies to professional clients, and not just to retail; record keeping – to confirm securities financing transactions are within the scope of record keeping requirements; […]

FCA publishes MiFID 2 guide and updates IFPRU

At FCA’s latest board meeting, it made a new guide, the MiFID 2 Guide (to be known as M2G). The Guide takes the form of regulatory guidance under FSMA. FCA had consulted on the guide, which comprises two sections, each setting out how FCA has transposed MiFID 2 and signposting the derivations and context of […]

International Association of Insurance Supervisors publishes updated Insurance Core Principles document

The International Association of Insurance Supervisors has published the latest update to its Insurance Core Principles document, which provides a globally accepted framework for supervision of the insurance sector. Amendments have been made to: ICP 13 (reinsurance and other forms of risk transfer) ICP 18 (intermediaries), and ICP 19 (conduct of business).

Effective financial management and planning by insurance firms and groups: PRA consultation

The PRA has published a consultation paper which seeks the views on a draft supervisory statement on effective financial management and planning by insurance firms and groups.  The draft supervisory statement is of particular relevance to insurance entities in the scope of Solvency II, the Society of Lloyd’s and managing agents. The supervisory statement is […]

Request for extension of time denied as Upper Tribunal considers section 393 FSMA

The Upper Tribunal (Tax and Chancery Chamber) has a denied a request for an extension of time to a Mr Stephen Cooper, who had challenged his identification in an FCA decision notice against WH Ireland Limited, outside the 28 day statutory period, on the basis that the reasons contained in the notice were prejudicial to […]

Financial Exclusion: UK government publishes response to Lords Select Committee final report

Following the appointment in 2016 by the House of Lords of a Select Committee to investigate financial exclusion and access to mainstream financial services, the Committee published its final report, ‘Tackling Financial Exclusion: A Country that works for everyone‘ in March 2017 (Report).  This Report made 22 recommendations to address financial exclusion and access, including […]

CMA investigation in the investment consultancy services market

Following the referral of the investment consultancy services market by the FCA to the CMA earlier this year, the CMA is now entering the phase of further information gathering and has updated its investigations page with the responses to issues statement received from the industry. The referral by the FCA followed its Asset Management Market […]

Select committee calls for post-Brexit transactional deal

The Lords’ EU Financial Affairs Sub-Committee has written to the Chancellor calling for an urgent agreement on a post-Brexit “standstill” transition point for the financial services sector. Baroness Falkner said the industry has repeatedly warned it cannot continue to service cross-border clients after 2019 if a transition period is not agreed by the end of […]

Treasury Committee inquiry into household finances

On 8 November, the Treasury Committee announced the launch of a new inquiry that will examine problematic indebtedness, inter-generational issues, lifetime financial planning and the effectiveness of the market in financing solutions and products to low income households. The Chair of the Treasury Committee, Rt. Hon. Nicky Morgan, indicated that the scope will include: what […]

Insurance broker loses authorisation over non-compliance with FOS award

The Upper Tribunal (Tax and Chancery Chamber) has upheld FCA’s decision to cancel the permission of Larksway Investments (an insurance broker), following non-compliance with a FOS award. FOS had upheld a complaint against Larksway in relation to a claim on a specialist landlord’s insurance policy, which Larksway was required to comply with promptly under DISP.  […]

FCA publishes latest Market Watch

FCA’s latest Market Watch newsletter highlights: the fast approach of the deadline for ensuring all entities that need an LEI have one; ESMA’s reference data files that are available to download; the transitional arrangements FCA has put in place as it decommissions its MiFID transaction reporting system and moves to the new Market Data Processor […]

FCA publishes MLR Annex 1 individual form

FCA has published the form “Annex 1” institutions must complete in respect of the relevant senior individual and nominated officer within their firms. FCA says it now requires this form to be completed because of the importance of the role, which is stressed in the MLR 2017.

The Supreme Court grants Deutsche Bahn AG permission to appeal against a Court of Appeal judgment concerning interchange fees

The Supreme Court (SC) today announced that permission to appeal has been granted to Deutsche Bahn AG (and other retailers) against the Court of Appeal’s judgment upholding an appeal by MasterCard against a judgment of the High Court, relating to interchange fees. This follows an action in the High Court brought by Deutsche Bahn (and various retailers) […]

Wholesale insurance broker market: FCA launches Market Study

The FCA has today published terms of reference for a market study into the Wholesale insurance broker market.  It is proposed that the market study will focus on how effectively competition in the market is working, in particular: whether  brokers are competing for customers by offering good deals, and how easy it is for new […]


The City of London Law Society has written to the Department for Business, Energy and Industrial Strategy outlining a number of concerns with the draft Contract Terms (Assignment of Receivables) Regulations 2017. The draft regulations will invalidate contract terms which prohibit the assignment of receivables. However, CLLS comment that the regulations “will create substantial uncertainty in a […]

PSR update on authorised push payment scams and reimbursement model consultation

The Payment Systems Regulator (PSR) has provided an update on progress in relation to authorised push payment (APP) scams, where fraudsters trick customers into instructing their banks to make a payment to what the customer believes is a legitimate account. Following a Which? super-complaint in September 2016, PSR, FCA and the payments industry developed a work […]

UN and EU sanction Mali with no designated persons

OFSI has published a financial sanctions notice confirming that the UN Security Council has imposed restrictive measures because of the threat to international peace and security posed by Mail, and this was followed by an EU Regulation imposing an asset freeze on individuals and entities identified by the UN. However, no-one has yet been identified […]

Cheque imaging: consultation on supporting legislation

HM Treasury has published a consultation on secondary legislation to support the Image Clearing System (ICS) for cheques. The legislative proposals follow the amendments to the Bills of Exchange Act 1882 introduced by the Small Business, Enterprise and Employment Act 2015, which allowed the introduction of cheque imaging.  This aims to cut down cheque clearing times […]

FCA’s future approach to consumers

The FCA has today published its Approach to Consumers paper, which is intended to explore the FCA’s approach to regulating retail consumers. The paper follows the publication of the FCA’s Mission Statement in April 2017, which explained how and why the FCA prioritise, protect and intervene in financial markets. It is the first of a number […]

FATF updates on NCCTs and developments

FATF has held its plenary meeting in Buenos Aires. Outcomes from the meeting include: an update on the list of NCCTs. FATF’s stance remains unchanged on North Korea and Iran. Countries with Strategic Deficiencies are now listed as Bosnia and Herzegovina, Ethiopia, Iraq, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Vanuatu and Yemen. Uganda, however, […]

Sanctions and AML bill

We have written a summary of the Sanctions and Anti-Money Laundering Bill as it starts its Parliamentary process.

FCA publishes near-final rules for new ILS regulatory framework

FCA has issued a policy statement setting out near-final rule changes required to FCA’s Handbook to incorporate the new regulated activity of insurance risk transformation. The policy statement includes feedback on the previous two consultation papers and will be of interest to: insurance special purpose vehicles (ISPVs) and firms considering becoming involved in setting up […]

Up next from FCA

FCA’s latest Policy Development Update promises, before the end of the year: policy proposals for regulatory fees and levies policy statement on the second consultation on FAMR implementation policy statement on IDD consultation CP17/33 feedback on certain parts of occasional consultation and quarterly consultations  

FCA reminds principals of AR risks

FCA has issued a further warning to firms that act as principal to appointed representatives or IARs. The warning follows an alert it published last year because of concerns over introducers having an inappropriate influence on principals’ business. FCA says introducers can, for example, refer customers with documentation including investment choice already completed. Principals must ensure they properly […]

FCA speaks on robo advice

Bob Ferguson has spoken on FCA’s take on robo advice. FCA supports automated advice, as it sees its use to consumers who are “unserved” or “underserved” by traditional models. FCA is keen to help firms who are developing automated models, with a view to reducing compliance risk, and testing suitability of recommendations to customers. He […]

FCA consults on market conduct codes

FCA has published a consultation paper setting out its approach to supervising and enforcing the SMCR, and a wider discussion on extending Principle 5 (standards of market conduct) to the unregulated activities of authorised firms. The consultation paper explains how FCA expects firms and their senior management to consider market codes when they are determining […]

BSB consults on good outcomes

The Banking Standards Board is consulting on what good banking outcomes look like to customers.  It is particularly interested in responses from consumer and civil society organisations. The consultation sets out how BSB is creating a “Consumer Framework” – it has set some principles which it is looking to embellish with outcomes and illustrative “real […]

Interest Rate rises for the first time in 10 years

For the first time in more than 10 years the Bank of England (BoE) has raised interest rates. At its meeting on 1 November, the BoE’s Monetary Policy Committee (MPC) voted by a majority of 7-2 to increase the official bank rate from 0.25% to 0.5%. Although households will face higher mortgage interest payments after the […]

EBA publishes final guidelines on the supervision of significant branches

On 1 November 2017, the European Banking Authority (EBA) published a final report on the guidelines on the supervision of significant branches (EBA/GL/2017/14). The final report follows a consultation, which took place in December 2016 and sets out a summary of the feedback received and the EBA’s response to it. The guidelines, which will apply from […]

New date for financial crime compliance course

We have agreed with the Compliance Register a new date for our popular Financial Crime Compliance Professionals Certificate Course. We will host this on 14 March 2018. Bookings are already open.  Please contact the Compliance Register for details and to book.

Commission adds Ethiopia to high risk list

The Commission has made a delegated regulation under MLD4 to add Ethiopia to the list of high risk third countries. It notes that its work to find the most appropriate way of assessing which jurisdictions should be on the list is still underway, but that in the interim it is appropriate to add Ethiopia to […]

FCA bans firm for failure to comply with FOS award

FCA has cancelled the permission of Foreman Financial Services Limited for failure to remain fit and proper and specifically for breach of DISP rules and Principles 6 and 11. The firm had advised a customer to transfer his pension into a SIPP to fund a property investment. The customer complained to FOS that the firm […]

EIOPA delivers first set of advice to the European Commission on Solvency 2 Delegated Regulation

The European Commission requested EIOPA to provide technical advice as part of its review of the Solvency Capital Requirement. Following a public consultation, EIOPA has provided advice on the following areas: Simplified calculations; Reducing reliance on external credit ratings; Exposures guaranteed and exposures to regional governments and local authorities; Risk-mitigation techniques; Undertaking specific parameters; Look-through […]

PRA publishes framework for authorisation and supervision of insurance special purpose vehicles

Following a period of consultation, PRA has published a policy statement and supervisory statement that are relevant to all parties who wish to apply to PRA for, or have obtained authorisation as, an insurance special purpose vehicle (ISPV). It is also relevant to insurers and reinsurers seeking to use UK insurance special purpose vehicles (ISPVs) as […]