Monthly Archives: June 2018

Greater scrutiny of corporate transactions and punitive measures for wrong-doings

The Government has released a consultation document as part of its programme of change for defined benefit pension schemes. Protecting Defined Benefit Pension Schemes – A Stronger Pensions Regulator contains proposals to give the Pensions Regulator (tPR) increased ability to monitor corporate transactions and sets out “a robust framework for punitive measures to deter and […]

EU unhappy at MLD4 implementation

The European Commission is unhappy with Member State transposition of MLD4. It currently has open infringement procedures against 20 Member States but says most have adopted and notified missing transposition measures. The Commission is now scrutinising those measures, while noting Member States have only until January 2020 to implement MLD5. The Commission is also looking […]

PRA updates on large exposures

PRA has published a policy statement together with updated supervisory statements on changes to its large exposures framework. PRA received 5 responses to its consultation paper, which supported the additional guidance. Most also supported the proposals relating to the non-core large exposures group limit and the exemption of certain exposures at UK consolidated level, although […]

Customer authentication under PSD2

We recently wrote an article for Compliance Monitor on strong customer authentication under PSD2 and EBA Guidelines.

PRA writes to CEOs on crypto-risks

Sam Woods has written a “Dear CEO” letter to CEOs of all dual-authorised firms on exposures to crypto-assets. PRA understands firms may already have limited exposure to such assets, and is writing to clarify its expectations of how firms behave, particularly in view of Fundamental Rules 3, 5 and 7. The letter sets out what […]

EIOPA opens InsurTech Insight survey

EIOPA is inviting the insurance industry as well as those not directly active in the insurance value chain to provide views on InsurTech, which they define as ‘technology-enabled innovation in insurance that could result in new business models, applications, processes or products with an associated material effect on the provision of insurance products and services’. The […]

FCA publishes update on Strategic Review of Retail Banking Business Models

The FCA has published a progress report on its ongoing Strategic Review of Retail Banking Business Models. The purpose of the Review is to consider the sources of competitive advantage that may have helped the major banks retain their market share, and from that analysis consider the potential for change and the impact of that […]

HMT, Bank of England and FCA set out approach to onshoring financial services legislation

The Treasury, the Bank of England and the FCA have published information about how financial services legislation will be on-shored under the EU (Withdrawal) Act, in particular to ensure the (hopefully unlikely) ‘hard Brexit’ scenario is addressed, if the negotiated implementation period is not able to take effect from March 2019. The Treasury intends to lay […]

Industry publishes MiFID 2 distributor templates

PIMFA and TISA have published a MiFID 2 Feedback Template and a guide on distributor reporting. It hopes the documents will help firms to meet their responsibilities under MiFID 2 and particularly that the Q&A will help distributors to make compliant returns to asset managers. Comments are welcome on the proposed template until 12 July. […]

FCA consults on push payment fraud complaints

FCA is consulting on changes to complaints handling rules to help victims of authorised push payment fraud. Currently, victims cannot complain to the PSP that receives their payment when their own PSP is not at fault. FCA now proposes rule changes to require firms to handle this type of complaint, and also to allow eligible […]

Serbia to be added to MLD4 high risk list?

The Commission has confirmed it will assess, at the end of June,  Serbia’s progress and commitments towards meeting its AML obligations and the FATF recommendations. It may then decide to add the country to the list of high-risk jurisdictions under MLD4.

FCA concerned about travel insurance access

FCA has published feedback on its Call for Input on Access to Insurance.  Its main concern is that people with pre-existing medical conditions find it hard to get travel insurance.  Common themes were: lack of good information about options for consumers who had received a high quote or been refused cover; lack of consumer understanding […]

EBA urges Brexit “no deal” preparation

EBA has published an Opinion in which it asks national regulators to ensure financial institutions are taking practical steps to prepare for a “no deal” Brexit with no transition period. It does not think institutions have been moving quickly enough in their planning and is concerned they are delaying triggering necessary actions. EBA notes that […]

Law Commission to look at SARs consent regime

The Law Commission is to review and suggest improvements to the consent regime under POCA and the Terrorism Act. It will specifically look at: defensive reporting the burdens on businesses caused by the consent and disclosure provisions and the impact of suspending transactions under the consent requirements. The matter is currently in the pre-consultation stage, with […]

PSR reports on initiatives to protect public from APP scams

The Payment Systems Regulator has published a summary of measures it is currently working on with other bodies to protect customers from authorised push payment scams – where fraudsters trick people into sending them money.  These ongoing or imminent measures include the enhancement of sanctions data quality confirmation of payee guidelines for identity, verification, authentication […]

House of Lords Committee issues call for evidence on Bribery Act 2010

The House of Lords’ Select Committee on the Bribery Act 2010, which was recently set up to conduct a post-legislative scrutiny of the Act,  has issued a call for evidence.  The Committee’s mandate includes to review the Act’s operation and its enforcement, and to make recommendations to the Government. While the Committee invites submissions on […]

Mansion House 2018: Speech by the Chancellor of the Exchequer

HM Treasury has published a speech by Philip Hammond, Chancellor of the Exchequer, which was delivered at the annual Mansion House dinner. In his speech, Mr Hammond focused on Brexit and financial services. He said that the UK needs to ensure that it remains a world leader in innovation, and extend London’s position as the […]

Mansion House 2018: BoE Governor gives speech – ‘New Economy, New Finance, New Bank’

Mark Carney, Governor of the BoE, delivered a speech at the annual Mansion House dinner on how the UK financial system can continue to serve the UK and the world, in the face of major structural changes. In his speech, Mr Carney outlined how the BoE is changing to support the development of the UK […]

FCA statement on EBA’s draft PSD2 Guidelines and Opinion for banks and others involved in open banking

The FCA has published a statement on the European Banking Authority’s (EBA) draft PSD2 Guidelines and Opinion on the Regulatory Technical Standards (RTS) on Strong Customer Authentication and Common and Secure Communication. The FCA said that it was supportive of the views contained in the EBA Opinion and encourage firms and API initiatives to consider these […]

FCA Financial Lives Survey

The FCA have published a report on its Financial Lives Survey 2018. The survey is the FCA’s largest tracking survey of adults and their finances, covering  13,000 face-to-face and online interviews. Key findings include: compared with the UK average of 50%, 55% of adults in the North West and 54% of adults in rural areas […]

Law Commission opens consultation on expanded definition of ‘insurable interest’

The Law Commission and the Scottish Law Commission have published an updated bill that proposes an expansion to the concept of insurable interest for life-related insurance. By using the term ‘life-related insurance’, the bill intends to create a wider category of insurance than just traditional life insurance, thereby also covering other forms of insurance which […]

AG Opinion on ‘payment accounts’ for the purposes of PSD

In the ongoing case of Bundeskammer für Arbeiter und Angestellte v ING-DiBa Direktbank Austria Niederlassung der ING-DiBa AG (Case C-191/17), the European Court of Justice has been asked for the first time to interpret the term ‘payment account’ for the purposes of the Payment Services Directive (PSD). The Advocate General’s Opinion has now been handed down, […]

ESMA confirms end of LEI grace period

ESMA has issued a statement confirming that the six month grace period granted to those required by MiFIR to have a Legal Entity Identifier (LEI), will end on 2 July 2017. ESMA will now work with national competent authorities to develop a supervision action plan which focuses on compliance with LEI reporting requirements.

Treasury Committee calls for abolition of “alpha male” culture in finance

The Treasury Committee has published its report following its Women in Finance inquiry, which sought to identify the barriers to women entering and progressing in the financial services industry.  It also examined the value to financial firms of having greater gender balance across all job grades and functions. The average gender pay gap in UK […]

MLD5 published in OJ

MLD5 has now been published in the OJEU. It is dated 30 May and was published on 19 June.  Member States are required to implement it by 10 January 2020.

Treasury’s response to call for evidence on breathing space scheme

HM Treasury has published a summary of the submissions received to the call for evidence on problem debt. The call for evidence was issued in October 2017 to gain further insight from the debt advice sector and creditors about how best to design, implement, administer and monitor a six-week breathing space scheme and statutory debt management […]

EBA publishes Annual Report 2017

The European Banking Authority (EBA) has published its annual report 2017, in which it describes the work undertaken and its achievements in 2017. The report also includes the EBA’s key areas of focus for 2018. The work undertaken by the EBA and its achievements in 2017 include: finalising  important components of the Single Rulebook and […]

EU fund marketing proposals progress

The Council of the EU has agreed a negotiating mandate for progressing the Commission’s proposals on cross-border marketing of funds. It has also published compromise texts based on the Commission’s originals to form the basis for negotiations with the European Parliament.

PRA publishes Policy Statement and Supervisory Statement on Algorithmic Trading

The PRA has issued PS12/18 and SS5/18, which sets out the PRA’s expectations of a firm’s risk management and governance of algorithmic trading.  The SS applies to all algorithmic trading activities of a firm, including in respect of unregulated financial instruments such as spot foreign exchange.  It should be read in conjunction with other applicable requirements, including […]

EBA consults on PSD2 RTS Guidelines for ASPSPs

The EBA has published a consultation on draft Guidelines supplementing the Regulatory Technical Standards on strong customer authentication published in the OJ in March 2018, and applicable from September 2019. Article 33(6) of the RTS set out the conditions that must be met when an Account Servicing Payment Service Provider (ASPSP) wishes to provide access […]

Book now: SMCR seminar

We are delighted to speak at and host a half day seminar on 2 October with the Compliance Register on the extension to the SMCR.  For details and to book, please contact the Compliance Register.

PSR DISCUSSION PAPER ON DATA IN THE PAYMENT INDUSTRY

The Payment Services Regulator (PSR) has published a Discussion Paper (DP18/1) on the use of data in the payments industry. The aim of the discussion paper is to better understand the actions the PSR may need to take in the future around the use of data in payment services. The PSR acknowledges that the UK’s payment sector is growing […]

EP adopts “EMIR Refit” proposal

The European Parliament has voted in plenary session to adopt the so called “EMIR Refit” Regulation. The European Commission has proposed that small financial counterparties (SFCs) should not be subject to the current EMIR clearing obligation where they deal with OTC derivatives at a low volume which would not present a systemic risk to the financial […]

FCA writes Dear CEO letter on crypto and financial crime

FCA has written a “Dear CEO” letter on the financial crime risks of crypto-assets.  The letter notes the scope for cryptoassets to be used for both criminal purposes and non-criminal purposes that nonetheless present the risk for abuse. The letter sets out what FCA regards as good practice for how banks handle these risks. The letter suggests: that […]

EU agrees money laundering criminal sanctions

The Council of the EU has agreed measures on criminal sanctions for money laundering offences.  A new Directive will set minimum rules for defining money laundering offences and the criminal sanctions for them. The maximum imprisonment will be only 4 years, with additional civil sanctions possible. The directive also caters for exclusion of legal entities […]

ESMA speaks on a genuine single market

Verena Ross has spoken on progress towards a “genuine” single European financial market, focusing on the role of regulation and supervision. She commented that the EU now has a robust and integrated regulatory framework but stressed the importance of supervision. She discussed the importance of taking the time and effort required for proper implementation and […]

BoE consults on the modernisation of UK payments

The Bank of England (BoE) has, together with the New Payments System Operator (NSPO) and the Payment System Regulator (PSR), launched a 6 week consultation on the adoption of a common global standard, known as “ISO 20022”, for payments in the UK. The standard will be adopted across the UK’s main interbank payment systems – […]

Treasury Committee engages with FCA over TSB IT migration

Nicky Morgan and Andrew Bailey have exchanged letters of the problems customers faced following TSB’s IT migration. The Treasury Committee had asked about the work FCA had done in advance of the planned migration, its assessment of the problems and its views on TSB’s evidence to the Committee and its communications with customers as well […]

FCA fines Canara Bank for AML failings

FCA has fined Canara Bank £896,100 for failings in its AML systems, and has restricted it from accepting deposits from new customers for 147 days. FCA found that, for a period of over 3 years, the banks failed to maintain adequate systems and did not take sufficient steps to remedy weaknesses that it had been […]

FCA consults on CMC regulation

FCA is consulting on draft rules for regulating claims management companies (CMCs) when it acquires regulatory responsibility for them on 1 April 2019. FCA is focussing on 3 key aspects: empowering customers to be confident they have chosen a value-for-money service that is appropriate for their needs; ensuring CMCs get redress for their customers in […]

SFO names new chief

Lisa Osofsky, former US federal prosecutor, more recently a Managing Director and Head of Investigations for EMEA at Exiger, will become the next Director of SFO. She will take up the post on 3 September.

BoE responds to the Treasury’s call for evidence on cash and digital payments

The Bank of England (BoE) has published its response to the Treasury’s Call for Evidence on cash and digital payments in the new economy. The BoE welcomes Treasury’s Call for Evidence. Key points include: the usage of cash is evolving, but there is, and is likely to remain for the foreseeable future, a significant public demand […]

New Chair of the Court of the Bank of England appointed

HM Treasury and the Bank of England have announced that Bradley Fried has been appointed as Chair of the Court of the Bank of England, with effect from 1 July 2018. He will replace Sir Anthony Habgood who has been Chair since 2014.

FCA publishes quarterly consultation

FCA’s latest quarterly consultation proposes the usual minor miscellaneous changes to its Handbook, including; changes to the appointed representatives appointment firm: the changes are spurred on by IDD changes but generally require firms to make a statement that they have complied with their regulatory obligations as principal; the COBS rules for insurance distribution to ensure […]

Up next from FCA

FCA’s latest Policy Development Update heralds a policy statement on fees and levies rates in July. Otherwise its timetable is quiet, with a policy statement on the MMF Regulation due at some point together with feedback on an increasing number of proposals from quarterly consultations going back 2 years.

ESMA exercises product intervention powers

ESMA has exercised its product intervention powers under MiFIR to: ban the marketing, distribution or sale or binary options to retail investors from 2 July; and restrict the marketing of CFDs to retail investors from 1 August. The restrictions consist of leverage limits on opening positions, a margin close-out rule and a negative balance protection […]