Monthly Archives: January 2018

Illegal scheme operator imprisoned

In the latest sentence to be handed down following FCA’s successful prosecutions of individuals involved in the Symbiosis Healthcare scheme, Samrat Bhandari has been imprisoned for 3.5 years and disqualified from being a director for 12 years. He was found to be the controlling mind behind a scheme that cold-called, used pressure sales and produced […]

Ombudsman News looks at travel insurance

The latest edition of Ombudsman News features problems and complaints relating to travel insurance. It notes that most disputes are around what is covered and what is not, and FOS says it is encouraged that it is upholding fewer complaints than previously – which it says indicates insurers are increasingly treating their customers reasonably. The […]

FCA updates on high-cost credit sector

Following a Feedback Statement in which FCA identified key areas of concern in the high-cost credit sector, it has published an update on the work undertaken since the July 2017 publication. This presents an emerging picture for intervention in some markets, but equally a limitation on what can be achieved through traditional regulatory intervention. The […]

FCA sends “Dear CEO” letter on APP fraud

FCA has published a “Dear CEO” letter emphasising the work required to combat authorised push payment (APP) fraud. This follows the Which? super-complaint in September 2017, and the Payment Systems Regulator’s response in November. FCA explains combating APP fraud and financial crime in general is a priority articulated in its 2017/2018 Business Plan. FCA hopes […]

MEPs divided on ML high risk list

The Economics and Home Affairs Committees in the EP have voted through additions to the Commission’s MLD4 blacklist of high risk jurisdictions by the narrowest of margins.  The proposal was to include Tunisia, Sri Lanka and Trinidad and Tobago in the list. The debate was over the inclusion of Tunisia. Many MEPs expressed incomprehension that […]

EIOPA revises work programme for 2018

The European Insurance and Occupational Pensions Authority (EIOPA) has published a revised version of its 2018 work programme, which was first published in September 2017. The revised version incorporates resources information for the years 2019 an 2020 relating to the European Commission’s legislative proposals relating to the review of the European Supervisory Authorities and the […]

FCA’s thematic review on the fair treatment of existing interest-only mortgage customers

The FCA has published a thematic review (TR18/1) on the fair treatment of existing interest-only mortgage customers. The FCA has been examining the fair treatment of customers with interest-only mortgages and has been looking at how lenders are working to help customers avoid the potential harm of non-repayment at maturity. In summary, the FCA found that: […]

FCA publishes decision notices on client money

FCA has published decision notices in respect of One Call Insurance Services Limited and its majority shareholder John Radford.  FCA plans to fine the firm £684,000 and restrict it from charging renewal fees to customers for 121 days (which would cost it around £4.6 million). FCA took action for perceived breaches of client money requirements […]

EBA writes to Commission on authentication RTS

The EBA has written to the European Commission following the Commission’s adoption of the RTS on strong customer authentication under PSD2. The EBA welcomes the adoption, appreciates the note the Commission took of some of EBA’s concerns and says it appreciates the Commission’s decision not to take note of some others.  However, it questions why […]

Chancellor writes to businesses on Brexit

Philip Hammond, together with David Davies and Greg Clarke, has written an open letter to businesses setting out what the UK wants to see in the post-Brexit implementation period. The letter says the Government is clear that the UK and EU access to each other’s markets must continue on the current terms during the period […]

European Commission publishes report on implementation and impact of EMD2

The European Commission has published a report on the implementation and impact of the second Electronic Money Directive (EMD2). The report focuses on the application of prudential requirements for electronic money institutions and discusses the relationship between EMD2 and the Fourth Money Laundering Directive. The European Commission concluded that: the overall assessment of the EMD2 […]

FCA fines online broker £1,049,412 for poor market abuse controls and failure to report suspicious client transactions

The FCA has fined online broker, Interactive Brokers (UK) Limited (IBUK), £1,049,412 for failings in its post-trade systems and controls for identifying and reporting potential market abuse between 6 February 2014 and 28 February 2015. The FCA said that IBUK breached Principle 3 (management and control) of its Principles for Businesses,  by failing to take […]

Unexplained Wealth Orders provisions take effect

The provisions of the Criminal Finances Act introducing unexplained wealth orders as a new investigatory tool take effect from 31 January.

Commission finalises own funds adjustment RTS

The European Commission has finalised the RTS for procedures excluding transactions with NFCs established in third countries for the purposes of the own funds requirement for credit valuation adjustment risk.  The RTS require institutions to verify the status of the counterparty at trade inception and thereafter annually, unless there is any reason to believe the […]

Sanctions and AML Bill progresses

The Sanctions and AML Bill is due to finish its Lords stages this week with a “tidy up” reading in the Lords on 24 January.  It will then pass to the Commons.

FCA publishes views on PRIIPs performance scenario concerns

FCA has published a statement following concerns raised about the performance scenarios in the PRIIPs KID. Some firms have noted that occasionally this information may appear to optimistic and risk misleading consumers. FCA says that where a manufacturer is worried the scenarios in their KID are too optimistic, it may provide explanatory materials to put […]

MLD4 high risk jurisdiction list in OJ

The Commission’s Delegated Regulation adding Ethiopia to its list of high risk countries under MLD4 has been published in the OJEU.

ESAs publish CDD opinion

The joint committee of the ESAs has published an opinion on the use of innovative solutions towards CDD. The opinion forms part of wider work on the “responsible and effective” use of innovation to enhance AML/CFT controls. The opinion looks at the balance between making controls more efficient against potentially weakening AML/CFT safeguards. The ESAs’ […]

GDPR compliance: the final countdown

We have written an article on the final countdown to GDPR compliance.

MLD 5 – virtually there?

We have written an article on the current status of MLD5.

EIOPA translates official IBIPs Guidelines

The European Insurance and Occupational Pensions Authority (EIOPA) has published official translations of guidelines under the IDD relating to insurance-based investment products (IBIPs) which incorporate a structure that makes it difficult for the customer to understand the risks involved. In so doing, the guidelines seek to minimise risks of consumer detriment arising from mis-sold IBIPs. […]

FCA consults on widening FOS access for small businesses

FCA has opened a consultation on plans to provide more small businesses with access to FOS. The changes proposed would allow FOS complaints redress to approximately 16,000 SMEs, charities and trusts, by changing the eligibility criteria to access FOS. Under the proposals, eligible businesses would be those that satisfy the following criteria: Under 50 employees; […]

FCA publishes policy statement on client money and unbreakable deposits

FCA has published a policy statement in response to feedback received from a consultation on depositing client money in unbreakable deposits. The consultation responded to difficulties faced by investment firms in depositing client money at banks. This was deemed to be partly due to the combined effects of the liquidity rules applicable to banks and […]

The new Office for Professional Body Anti-Money Laundering Supervision established

The new regulator for anti-money laundering, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), was launched on 18 January 2018 thereby strengthening the UK’s anti-money laundering (AML) supervisory regime. OPBAS is housed within the FCA and will facilitate collaboration and information sharing between the professional body AML supervisors, statutory supervisors, and law enforcement agencies. In addition, the […]

FCA publishes third policy statement on IDD implementation

FCA has published its third policy statement on IDD implementation, responding to feedback received on various consultations and providing near-final rules. In relation to life insurance distribution business, it covers requirements relating to: Inducements; Suitability and appropriateness; and Information and product disclosure. In relation to all insurance distribution business, it covers requirements relating to: Conflicts […]

ESMA updates transparency calculations for MiFID II/MiFIR

The European Securities and Markets Authority (ESMA) has published an extended version of MiFID II/MiFIR transitional transparency calculations (TTC) for equity and bond instruments. ESMA has added the applicable TTC for: equity instruments, traded for the first time on a trading venue between 13 September 2017 and 2 January 2018 (included); and bond instruments (except ETCs […]

FSCS PUBLISHES PLAN AND BUDGET FOR 2018/2019

The Financial Services Compensation Scheme (FSCS) has published its Plan and Budget for 2018/2019. The Plan and Budget outlines the FSCS’s expected management costs and initial levy forecasts financial services firms will pay next year. The FSCS expects to levy the industry £336m, for the nine months to 31 March 2019, up from £320m in […]

Payment Systems Regulator explains focus on UK’s ATM network

The Payment Systems Regulator (PSR) has published a letter sent by it to the Chair of the Treasury Select Committee regarding the UK’s ATM network. The letter sets out the PSR’s continued commitment to ensuring access to ‘free to use’ ATMs, and describes its ongoing program of work on the ATMs network. The letter also […]

The PRA postpones the introduction of its reporting proposals set out Pillar 2 liquidity consultation paper

The PRA has updates its webpage relating to its consultation paper on Pillar 2 liquidity (CP13/17). In its consultation paper, the PRA set out its proposals on a cash flow mismatch risk  framework and other methodologies for assessing firms’ liquidity risk under the Pillar 2 liquidity framework. It also proposes drafting reporting rule changes and the […]

The PRA’s “Dear Chair” letter on consumer credit

On 17 January 2018, the PRA published a “Dear Chair letter” following a review on consumer credit lending (covering credit cards, personal loans and motor finance) and the publication of its statement on consumer credit in July 2017. The letter communicates the PRA’s key findings from the review and sets out points for firms to […]

Joint Committee of ESA’s final guidelines under revised Wire Transfer Regulation

The Joint Committee of the European Supervisory Authorities (ESA) has published its final guidelines under the Wire Transfer Regulation (Regulation (EU) 2015/847) in each of the official languages of the EU. The guidelines were first published in September 2017 and include measures that payment service providers should take to detect missing or incomplete information on the […]

ECA’S REPORT ON THE OPERATIONAL EFFICIENCY OF THE ECB’S CRISIS MANAGEMENT FOR BANKS

On 16 January 2018, the European Court of Auditors (ECA) published a report on the operational efficiency of the European Central Bank’s (ECB) crisis management for banks. The report states that although the ECB has established a substantial framework for crisis management and resources for the assessment of bank recovery plans and the supervision of […]

Responses to the Treasury Committee’s report on Solvency II

The House of Commons Treasury Committee has published HM Treasury’s response and the PRA’s interim response to its report on the Solvency II Directive and its impact on the UK insurance industry. HM Treasury responded to the recommendations set out in the report relating to the PRA’s competitive objective and Brexit. In its interim response, the […]

Treasury publishes response to IDD consultation

In February 2017, the Treasury opened its consultation on the UK transposition of the IDD. The Treasury has now published the results of that consultation, and also the draft statutory instrument. The consultation response document indicates that the draft statutory instrument will be laid before Parliament ‘in due course’. It also notes that the proposal […]

Immigration status checks on account holders begin

The Home Office has confirmed that banks and building societies have started carrying out checks against their personal current account holders to establish whether any account holder is an illegal immigrant.  They are doing so using a Cifas database. If there is a match, the Home Office will instruct the institution what steps to take.

How UK law is changing under PSD2

We have written an article for Compliance Monitor summarising the key changes PSD2 brings to UK law.

PM meets FIs to talk Brexit

Theresa May has chaired a meeting of senior executives from a number of financial institutions to discuss the opportunities and challenges Brexit presents. She noted the UK’s aim of agreeing an implementation period by the end of March, while Philip Hammond said the Government is prioritising the needs of consumers and tax payers.  For their […]

IFRS 9 transitional arrangements – EBA Final Guidelines and the PRA’s “Dear CFO” letter

The EBA’s final Guidelines on disclosure requirements of IFRS 9 Following its consultation in July 2017, the European Banking Authority (EBA) has today published its final Guidelines on disclosure requirements of International Financial Reporting Standard 9 (IFRS 9) or expected credit losses (ECLs) transitional arrangements, specifying a uniform disclosure template institutions should use when disclosing […]

EP updates on MLD5 and IDD votes

The EP’s Legislative Observatory has been updated to indicate: a date of 16 April for a hearing on MLD5; and a date of 28 February for a hearing on the IDD extension.

Up next from FCA

FCA’s latest Policy Development Update promises, among other things: policy statement on regulatory fees and levies by the end of March; the delayed policy statement on further implementation of the FAMR; consultation on the Money Market Funds Regulation in January; the final policy statement and near final IDD rules, also in January; and consultation in […]

ICO fines 4 firms for nuisance calls and spam texts

The ICO has fined four firms a total of £600,000: Barrington Claims Limited had made over 15 million automated calls about PPI; Newday Limited used other firms to send 44.7 million spam emails to promote its financial products to people who had subscribed to websites the other firms operated; Goody Market UK Limited, operator of […]

PRA proposes changes to insurers’ reporting requirements

As part of its review into the implementation of Solvency 2, PRA has published a consultation paper on changes to insurance reporting requirements. The changes are designed to reduce the burden for Solvency 2 firms and mutuals while maintaining PRA’s ability to meet its statutory objectives and to supervise firms. The consultation paper is relevant to […]

FCA sends ‘Dear CEO’ letter following CFD market review

Following its review of the contracts for difference (CFD) market, the FCA has written to the CEOs of providers and distributors of CFDs to highlight specific concerns. The letter warns that there are areas of serious concern regarding the following areas: target market identification, and alignment to the characteristics of the product; communication, oversight and […]

FCA updates Enforcement Guide as PRIIPs Regulation comes into force

The FCA has published a legislative instrument that amends its Enforcement Guide to reflect the implementation of the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs Regulation). The changes to the Enforcement Guide outline the FCA’s approach to enforcement of the PRIIPs Regulation, and came into force on 4 January 2018.

EP creates IDD delay file

The EP’s legislative observatory has opened a file for the debate on delay of the implementation date for the IDD, but as at 9 January no date had been set for debate.

AFME publishes post trade DDQ

AFME has published a revised post-trade due diligence questionnaire to help global custodians. The new version harmonises and simplifies the DD process and now includes 20 additional questions to the original 2016 questionnaire.

ESMA uploads MiFID 2 lists

ESMA has published several lists of documents and information relating to MiFID 2.  It has published: a public register of derivative contracts subject to the MiFIR trading obligation a list of trading venues temporarily exempted from open access under MiFIR and a first set of position management controls for commodity derivatives. It has also decided […]

EU updates North Korea sanctions

The EU has added to its list of designated persons in relation to North Korea to align its list with UN measures. The EU has already autonomously listed several others.  The Council now intends to ensure swift transposition of the changes.

TI criticises UK role in laundering

Transparency International has highlighted and criticised the role London plays in international money laundering. It comments on a new investigation focusing on structures used to help sell frozen assets of the former Ukrainian President. TI notes the key role that UK based professionals helped structure the web of companies that allowed the sale to take place. […]

PRA consults on MREL reporting

PRA is consulting on changes to its Supervisory Statement 9/13 to reflect its expectations for reporting in the minimum requirement for own funds and eligible liabilities. It seeks comments by 9 April.

FCA INSIGHT ARTICLE: Who is driving consumer credit growth?

The FCA has published an Insight article that considers who is driving consumer credit growth. Although regulators have relied upon aggregate data from larger lenders to monitor which lenders are driving credit growth, there are important gaps. For example, they do not include less-mainstream products that people with low incomes often rely on; and do not […]

FCA fines and bans former RBS trader, Neil Danziger

The FCA has fined former Royal Bank of Scotland (RBS) interest rate derivatives trader, Neil Danziger, £250,000 and has prohibited him from performing any function in relation to any regulated financial activity. The FCA found that Mr Danziger, who formerly worked at RBS trading products referenced to Japanese Yen LIBOR,  was knowingly concerned in RBS’s failure to […]

Charles Randell becomes new FCA and PSR chair

Charles Randell CBE has been appointed the new chair of FCA and the PSR with effect from 1 April.

FCA consultation paper on aligning FSCS levy time period

The FCA has published a consultation paper on aligning the Financial Services Compensation Scheme (FSCS) levy time period (CP18/1). The FCA recently made changes to the FSCS funding arrangements as part of a broader review of FSCS funding, including to align the FSCS compensation levy year with the financial year. The FCA has since become […]

Memorandum of Understanding between the FRC and FCA

The Financial Reporting Council (FRC) and Financial Conduct Authority (FCA) have published a Memorandum of Understanding (MOU) setting out: the respective statutory regulatory responsibilities of the FRC and FCA;  the arrangement for co-operation between the two bodies; and the exchange of relevant information. In addition, the MoU aims to aid, through clarity and transparency, understanding of the above […]

MiFID 2 implementation day

MiFID 2 implementation date has finally arrived.  We have written an article to remind firms of the key changes and action points. FCA has also published a series of updates covering: transitional arrangements for trading venues, which confirms FCA has agreed a transitional arrangement for ICE Futures Europe and LME, such that the open access […]

Commission publishes Swiss exchange MiFID 2 equivalence

The Commission has ruled the Swiss Exchange AG and BX Swiss AG as equivalent to regulated markets under MiFID 2.

Court dismisses Angela Burns appeal

The Court of Appeal has handed down judgement following an appeal by Angela Burns, former NED of 2 mutual societies. In 2012, the then FSA had fined and banned her after it found she had recklessly, and in breach of her fiduciary position as a NED, failed to disclose conflicts and had used her positions […]

Wolfsberg Group updates on correspondent banking DDQ

The Wolfsberg Group has updated on its work on the correspondent banking due diligence questionnaire, which it updated in October 2017. Following a review and feedback, it has decided only to publish the DDQ more widely when there is an additional set of materials. This will provide better and more focused guidance and set out […]

JMLSG updates guidance

JMLSG has published further amendments to its Guidance, most recently updated in June 2017, and submitted the entire revised Guidance to Treasury for approval. Atlhough the amended Guidance will have legal status only when approved, firms can now use the amended provisions if they wish.

FMLC publishes WTO Brexit views

FMLC has published a paper exploring the basis of UK trade with the EU following Brexit, and the interplay this will have with World Trade Organization (WTO) principles. As many commentators have noted, the basis of UK-EU trade could take the form of the UK’s continued EEA membership, a transitional arrangement, a new bespoke treaty, […]