Monthly Archives: May 2018
FCA’s high-cost credit review published
The FCA has concluded its review into high-cost credit, and based on issues it found has published two consultations: CP18/12 on rent-to-own, home-collected credit, catalogue credit and store cards, and alternatives to high-cost credit, and CP18/13 on arranged and unarranged overdrafts. In the rent-to-own category, which covers hire-purchase and condition sale agreements, it found that […]
Pensions Regulator CEO to step down
The Chief Executive of the Pensions Regulator (TPR), Lesley Titcomb, is stepping down at the end of her four year term in February 2019. Since she became Chief Executive in 2015, TPR has focused on becoming a more visible and proactively engaged regulator with the aim of ensuring that pension scheme members receive the benefits […]
FOS Annual Review published
The FOS has published its Annual Review for 2017/2018. Many of the complaints statistics highlight products that are the subject of ongoing regulatory scrutiny and activity: the FOS notes significant increases in complaints in home credit, hiring, leasing and renting, and payday loans: putting to one side PPI, one in four new complaints related to […]
ESMA publishes MiFID 2 suitability guidelines
ESMA has published its final guidelines on certain aspects of the MiFID 2 suitability requirements. The guidelines build on their MiFID 1 predecessor, and broaden them to address technological developments such as a the development of robo-advice and take into account supervisory experience and the results of reviews and surveys. The guidelines also include a […]
FCA publishes Final Guidance relating to Part VII insurance business transfers
The FCA has published FG18/4: The FCA’s approach to the review of Part VII insurance business transfers, which sets out the FCA’s key considerations and general expectations when reviewing a Part VII transfer application. The areas covered by the guidance include: factors and information requirements firms should consider before contacting the FCA documents that firms […]
FCA develops its focus on improving culture in financial services
The FCA has published an event summary describing output from a conference it held in March on Transforming Culture. Following the conference, and the publication of its Discussion Paper on Transforming Culture in Financial Services, the FCA has identified four key thematic lines of enquiry around which to focus ongoing engagement with the financial services […]
ESMA updates MiFID 2 FAQs
ESMA has updated its FAQs on investor protection and intermediaries under MiFID 2. New questions added in May focus on: best execution: a new question addresses what is meant by “other liquidity provider”; client categorisation: new questions look at when and how a firm can assess whether it can treat an individual private investor as a professional client, […]
ESMA updates UCITS FAQ
ESMA has updated its FAQs on the application of the UCITS Directive. The additions look at how to apply remuneration disclosure requirements to staff or the delegate of a UCITS management company who have been delegated investment management functions.
FCA publishes Handbook updates including IDD instrument
The FCA has published Handbook Notice No. 55, setting out: the Financial Services Compensation Scheme (Funding Review) Instrument 2018, the Handbook Administration (Data Protection) Instrument 2018, the Insurance Distribution Directive Instrument 2018, and the Supervision Manual (Reporting No 8) Instrument 2018. The Data Protection Instrument sets out administrative changes arising from the implementation of GDPR, […]
BoE publishes FEMR update
BoE, FCA and Treasury have published the progress report on the Fair and Effective Markets Review. It says significant progress has been made towards the recommendations. Key conclusions are that: the work on extending the SMCR will achieve the policy intent of the accountability framework already in place for PRA regulated credit and investment institutions; […]
Parliament announces Bribery Act Committee
Parliament has set up a new Committee to consider the Bribery Act. It plans to publish a call for evidence in due course.
Carillion inquiry criticises regulator
Carillion’s rise and spectacular fall was a story of “recklessness, hubris and greed”. Last week, the Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee published the final report of their joint inquiry into the collapse of Carillion – a “giant and unsustainable corporate time bomb”. If, as the report states, Carillion […]
OFSI updates on reporting
OFSI has updated its guidance on reporting to it. There is a legal obligation to report to OFSI: known or suspected breaches of financial sanctions; knowing or suspecting that a person is a designated person; or knowing or suspecting that an entity holds frozen assets where that knowledge or suspicion arises in the course of business. OFSI’s […]
Data Protection Bill receives Royal Assent
On 23 May, the Data Protection Act 2018 was finally passed into law. The new Act repeals the Data Protection Act 1998, and facilitates the implementation into UK law of the General Data Protection Regulation (EU) 2016/679, which comes into effect on 25 May. We will be publishing an article in due course that will […]
Lloyd’s gives IDD guidance to non-UK coverholders
Lloyd’s has published guidance for non-UK EEA coverholders on the actions they must take to ensure IDD compliance. The guidance focuses on agreement between all parties in the distribution chain on who the product manufacturer is, and the need to document this in the binding authority agreement. Coverholders that are manufacturers should prepare appropriate IPIDs, […]
Lloyd’s Brussels obtains licence
Lloyd’s has announced that it has received licence approval from the National Bank of Belgium for Lloyd’s Insurance Company S.A. Post-Brexit, this subsidiary of Lloyd’s will be able to write non-life risks from the EEA, and will be ready to start writing business from 1 January 2019.
FCA discusses mortgage enforcement and competition issues in Building Societies speech
The FCA’s Director of Supervision, Jonathan Davidson, has delivered a talk on Building Societies and the Future of Retail Banking at the Building Societies annual conference. In his speech, Jonathan raised the issue of whether the historically low repossession rates was actually a concerning indication: whether forbearance should be offered in cases where the borrower […]
Treasury Committee’s digital currencies inquiry
The Treasury Committee has updated its webpage with the written evidence it has received to its digital currencies inquiry, which was launched in February 2018. The Committee received written evidence from a number of interested parties including the FCA and Bank of England.
Tribunal agrees Box Clever support
The Upper Tribunal has decided that it is reasonable for the Pensions Regulator to require companies from the corporate group of ITV to provide support for the Box Clever Group Pension Scheme. The scheme has 2,800 members and a funding deficit of around £115 million. Box Clever was formed in 2000 as a joint venture […]
FCA speaks on technology in combating crime
Megan Butler has spoken at the AML TechSprint event. She focused on how data and technology can help to detect and disrupt criminal activity and how financial institutions staff can help in the fight against financial crime. She spoke of the insights into criminal behaviour FCA has gained since it introduced the financial crime return. It […]
Sanctions and AML Bill gets Royal Assent
The ping pong stage of negotiations of the Sanctions and AML Bill took place as scheduled on 21 May, and the two houses of Parliament agreed the text which received Royal Assent on 23 May.
HM Treasury: Cryptoassets Taskforce meets for the first time
The first meeting of the UK’s new Cryptoassets Taskforce took place on 21 May 2018. The Taskforce was first announced in April by the Chancellor of the Exchequer as part of the Government’s Fintech Sector Strategy. Senior leaders from the Government and the financial regulators met to agree the Taskforce’s objectives, which include exploring the impact of cryptoassets, […]
Memorandum of understanding between FCA and Insolvency Service
The FCA has published a memorandum of understanding (MoU) it has entered with the Insolvency Service (IS). The MoU sets out the agreement between the IS and the FCA that governs the exchange of information to better deliver the objectives of both organisations, in particular, in respect of information relating to misconduct, investigations and enforcement. […]
FCA bans director for misappropriation of client money
The FCA has today published a decision notice in which it has banned a director, Darren Newton, from working in any regulated activity in the financial services sector. The FCA found that Mr Newton had used customers’ money to purchase a debt management firm, First Step Finance Limited. The FCA commented that this “showed a […]
JMLSG updates sectoral guidance
JMLSG has published updates to its guidance in respect of asset finance and syndicated lending. The guidance: in respect of asset finance, describes the main types of asset finance and discussed when its provision involves regulated activities for the purposes of FSMA. It then sets out key features that can decrease or increase money laundering […]
Summary of responses to the ECB’s second public consultation on developing a euro unsecured overnight interest rate
The European Central Bank (ECB) has published a summary of the responses it received to its second consultation on developing a euro unsecured overnight interest rate. The consultation follows the ECB’s decision to develop a daily euro unsecured overnight interest rate based on data already available to the Eurosystem. The rate is due to be finalised before 2020 and will complement […]
FCA consults on consumer contract variations
FCA is consulting on guidance for firms setting out what factors under the Consumer Rights Act they should take into account when they are drafting and reviewing variation terms. The draft guidance sets out a list of things FCA says firms should take into account, which would include: how valid the reason for variation is […]
PRA publishes policy statement on financial management for insurers
Following its consultation on effective financial management and planning for insurance firms and groups, the PRA has now published its final policy statement PS10/18, and Supervisory Statement SS4/18, ‘Financial management and planning by insurers’. The Supervisory Statement (which has been modified in the light of responses to the consultation) includes a framework for the: development […]
Blockchain: Game changer or game over?
Following our successful seminar on 10th May, read our blog updates.
NCA and TI warn of Brexit ML risks
The NCA and Transparency International have warned of the risks Brexit presents of the UK being used as a vehicle for money launderers and corruption. Responding to the NCA’s identification of the risks, TI said: the UK should speed up plans to introduce a public register of the real owners of overseas companies that buy […]
OFSI updates sanctions FAQs
OFSI has published a list of FAQs for importers and exporters focussing on the application of financial sanctions. It notes the separate regimes and potentially the need for separate licences that may be required from OFSI in relation to financial sanctions and the Export Control Joint Unit for trade sanctions. It notes some key risks […]
SRA fines law firm MLRO for breach of MLRs
The Solicitors’ Regulation Authority has fined Anthony Gale, partner at Maurice Smiths solicitors who was also its compliance officer and MLRO, £10,000 for various conduct failings in relation to a number of mortgages. Mr Gale acted on a number of conveyances at the instruction of third parties without confirming the instructions with the client. The […]
ASA Ruling on Intelligent Lending Ltd t/a Ocean Finance
The Advertising Standards Authority (ASA) upheld a complaint about a credit card advertisement broadcast by Intelligent Lending Limited t/a Ocean Finance. The complainant challenged whether the advertisement should have included a representative APR. The radio advertisement, broadcasted in January 2018, stated “Apparently there are still some people who say they don’t want to apply for an Ocean credit […]
GOVERNMENT SCRAPS NEW GOODS MORTGAGES BILL
HM Treasury has published the response to its September 2017 consultation on the proposed Goods Mortgages Bill and has announced that it is no longer planning to introduce new legislation on this subject at this time. This follows a review of the existing legislation governing creation of security over goods by individuals which began in 2014. In a 2016 report, the Law […]
EU adopts MLD5
The Council has formally adopted MLD5 in its meeting of 14 May. The changes to MLD4, already agreed between the Council and Parliament, include: greater transparency of beneficial ownership of companies and trusts; addressing the risks of prepaid cards and virtual currencies; greater cooperation between FIUs; and enhanced checks on transactions involving high-risk countries. The […]
FinTech industry associations publish PSD2 voluntary guidelines
UK Finance, the Financial Data and Technology Association, the Electronic Money Association and techUK have jointly published voluntary guidelines. The guidelines are directed at account servicing payment service providers, account information and payment initiation services and technical service providers. The guidelines seek to increase customer protection in relation to ‘screen scraping’, including by promoting the […]
Financial Guidance and Claims Act gets Royal Assent
The Financial Guidance and Claims Act has received Royal Assent. The Act: establishes a single financial guidance body, and sets out its objectives, functions and funding details. It also sets out requirements on regulators to make guidance and permits the making of regulations that ban unsolicited direct marketing relating to pensions and other financial products […]
FCA retires retail advice guidance
FCA has confirmed that it will “retire” with immediate effect FG12/15: RDR: independent and restricted advice, and FG14/1: Supervising retail investment advice: inducements and conflicts of interest. It consulted last December on the proposal to do so, as it considers their content has been largely superseded by rule changes, including those implementing MiFID 2.
Regulators fine Barclays CEO for breach of SMR requirements
PRA and FCA have published the first final notice for breach of an Individual Conduct Rule. They have jointly fined James (Jes) Staley £642,430 for breach of Individual Conduct Rule 2 (failure to act with due skill, care and diligence), after he tried to find out who had sent an anonymous letter. The letter claimed […]
High Court sanctions Lloyd’s ring-fencing scheme
The High Court has sanctioned an application by Lloyds Bank PLC, Bank of Scotland PLC and Lloyds Bank Corporate Markets PLC for a ring-fencing scheme. This is the second scheme to come before the courts and be approved, after Barclays Bank plc and Woolwich Plan Managers’ was approved in March. RBS’ scheme has been sanctioned by […]
Government responds on Brexit
The Government has published its response to the House of Lords EU Committee Report on financial regulation and supervision after Brexit. It offers assurances that: the UK will continue to lead global standards; the Government is already taking action under the EU Withdrawal Bill to incorporate the acquis. It is working on how to address […]
Sanctions Bill Ping-Pong date set
The “Ping-Pong” stage of the Sanctions and AML Bill will take place on 21 May.
ABI and BIBA launch principles for premiums
ABI and BIBA have published a set of guiding principles and action points that insurers and brokers should follow, which the associations intend will address some of the issues that currently lead to excessive differences between new and renewal premiums. The principles apply to home, motor and travel insurance, but exclude policies such as pet […]
ESMA sets up central register portal
ESMA has created a new portal for checking the authorisation status of investment firms, trading venues and DRSPs authorised under MiFID 2, UCITS management companies and AIFMs and also funds managed or marketed in the EU.
Up next from FCA
FCA’s latest Policy Development Update promises over the next couple of months the overdue feedback on fees and levies policy proposals with consultation on rates proposals. No dates are set for any other key papers.
FCA publishes mortgage market interim report
FCA has published its interim report into the mortgage market. Although it is pleased with how competition is working to the benefit of many people, it has made some suggestions for improvement. It found that there are generally high levels of choice for consumers and that consumers engage with their options, with evidence of switching […]
TI welcomes Sanctions Bill amendment
Transparency International has welcomed a cross-party amendment to the Sanctions and AML Bill that will require all British Overseas Territories to introduce public registered to reveal the individuals behind companies formed in their jurisdictions. If they do not do so, a draft Order in Council should be prepared no later than the end of 2020 […]
NCA announces HBOS investigation
NCA is to conduct a pre-investigative evidential review into allegations of fraud, money laundering and corruption in relation to the business of the then HBOS Impaired Assets Division in London and the South East, that went wider than the investigation which resulted in prosecutions last year.
Treasury makes IDD perimeter law changes
Treasury has made the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018 and laid it before Parliament on 1 May. The Order makes changes, mainly to the RAO, to reflect the changes to the regulatory perimeter consequent on IDD implementation and will fully come into force on 1 October. The main changes generally update […]
Government publishes Sanctions and AML Bill: exceptions and licenses Policy Note
In support of the Sanctions and Anti-Money Laundering Bill, the FCO has published out a Policy Note which describes the government’s intended approach to: licensing applications in relation to asset freezes, including how it intends to deal with applications it can foresee, general licenses and common grounds for application; maintaining a similar framework to the current one […]
Bank of England announces consolidation of three UK Payment System Operators
The Bank of England has announced that the New Payment System Operator Limited (NPSO) has taken over responsibility for the Bacs and Faster Payment retail payment systems. This consolidation is the result of work by both the Bank of England and the Payment Systems Regulator. The objective is to develop the capability and capacity of […]
FCA publishes second 5 Conduct Questions report
The FCA has published its second annual report setting out responses from wholesale banking firms to the FCA’s conduct question set. The FCA notes that the second report indicates progress has been made from the time when 5 Conduct Questions were first introduced, in 2015. The FCA indicates that they intend to extend the 5 […]
FCA publishes new FSCS funding rules
Following its consultation in 2017, the FCA has now published its final rules on reformed FSCS funding. These rules will take effect from April 2019. Additionally the FCA has opened a consultation on draft rules relating to Professional Indemnity Insurance requirements for Personal Investment Firms, CP 18/11. The proposed rules will require that policies do […]