Monthly Archives: January 2019

Commission makes MLD4 RTS on third country risks

The Commission has published the final form of RTS under MLD4 aimed at better and more consistent measures in approaching ML/TF risk where credit or financial institutions have a presence in a third country whose laws do not permit group-wide policies. The RTS set the ideal minimum standards groups should attain, and how they should […]

Regulators consult on FSCS MELL

FCA and PRA are consulting on the management expenses levy limit (MELL) for FSCS for the 2019/2020 year. They propose an increase of 2.4% over the current year with a levy for FSCS management expenses of £74.6m and an unlevied contingency reserve of £5m.  The consultation includes a breakdown of costs between fee blocks. Responses […]

BSB consults on regulatory references good practice

The Banking Standards Board is consulting on draft good practice guidance on regulatory references. The guidance will be all the more important later this year when the SMCR extends the regulatory references requirements to virtually all firms. Bearing in mind the purpose of the guidance is essentially to stop “rolling bad apples” making their way […]

FCA feeds back on RND and Plevin issues

FCA has published a detailed policy statement to back up the new rules on regular premium PPI complaints and recurring non-disclosure of commission. FCA stresses that one of the main purposes of its consultation and now the new rules is to ensure that customers who may have made complaints about mis-selling of PPI that were […]

FCA and FRC focus on encouraging effective stewardship

The FCA is working with the the FRC to set out proposals and a discussion paper encouraging asset managers and others managing investments to take a closer interest in the operation of the businesses in which they invest. The FCA consultation is on measures implementing the second Shareholders Rights Directive which mainly affects FCA regulated […]

FCA consults on reporting requirements for General Insurance firms

The FCA is inviting views on proposals to require firms to report certain value measures data on a wide range of GI products. This consultation follows the identification of issues of poor value in the GI market, and a pilot trialed in 2016 involving reporting requirements and publication of the resultant data sets. Under the […]

FCA gives NPPR guidance

FCA has provided some further guidance to help firms filling in the NPPR forms.

FCA consults on retirement outcome improvements

FCA is consulting on measures to improve retirement outcomes for consumers. Its concern is that consumers are using the pensions freedoms to move into drawdown and hold funds in investments that will not meet their needs. It feels consumers focus only on taking their tax-free cash and take the easiest method available to drawdown. To […]

Tribunal rules on Burns costs

The Upper Tribunal has ruled on whether any part of costs claimed by Alistair Burns (on his unsuccessful application) should be awarded. The Tribunal has discretion over the award of costs, but can only make the award if it considered that FCA had acted unreasonably in bringing, defending or conducting the proceedings, or that the […]

UK / Switzerland deal reached on insurance

At the World Economic Forum in Davos, the Swiss and UK governments signed a deal to allow both countries to trade freely within the insurance sector post-Brexit. The agreement will come into force when the current EU-Swiss insurance agreement ceases to apply to the UK. The agreement will replicate the effects of the existing EU-Swiss […]

EIOPA calls for improvements to the assessment of the propriety of AMSB members

On 25 January 2019 EIOPA published findings of its peer review, which examined how national competent authorities (NCAs) assess the propriety of administrative, management or supervisory body (AMSB) members and qualifying shareholders.  The review was initiated following a number of cross-border cases indicating a lack of harmonisation with regards to the propriety assessment across the […]

Solicitor fined for AML breaches

The Solicitors Disciplinary Tribunal has fined Khalid Sharif, a director and solicitor at Child & Child, who was also the firm’s MLRO £45,000 for failings under the (then) 2007 MLRs, which were also breaches of SRA Principles and rules. It found that, for just over a year, Mr Sharif: failed to take any or any adequate […]

Ireland and Luxembourg allay Brexit funds concerns

Ireland and Luxembourg have both made announcements designed to give comfort to their funds that use UK based portfolio managers: The Deputy Governor of the Bank of Ireland said in a speech that it was making good progress in its preparations for a hard Brexit.  These will include ensuring that consumers can continue to be […]

FCA makes new rules

FCA’s latest Handbook Update lists rules made in December and January.  The key changes: amend the rules on PCAs and Overdrafts from 18 December 2019: these changes amend BCOBS and CONC to tackle low levels of consumer awareness of and engagement with overdrafts; amend DISP to require lenders and sellers to write to certain Plevin complainants […]

CMA updates investment consultancy implementation timetable

CMA has published its administrative timetable for implementation of the investment consultancy and fiduciary management market remedies.  There will be: Consultation on the draft Order in February; Notification to the EU of any proposals that would be super-equivalent to MiFID 2 in April; and the statutory deadline for implementing the remedial action in June.

FMLC writes to Treasury on Brexit regulations

FMLC has written to Treasury with its key observations on the FSMA (EU Exit) Regulations.  The Committee is concerned at some wording proposed in relation to the financial promotion rules. Specifically, FCA has power to make rules that apply to authorised persons in relation to communications they make or approve if rules are necessary to […]

Treasury Committee launches post-Brexit FS inquiry

The Treasury Committee has started a new inquiry looking at financial services in the UK after Brexit. Its focus is to look at: what the UK’s financial services priorities should be when negotiating the UK’s future trading relationships with the EU and third countries; how the sector can take advantage of the new environment, including […]

SFO announces Tesco DPA

SFO has published the terms of a DPA it has entered into with Tesco Stores Ltd following events in 2014 which resulted in the company creating a false account of its financial position by overstating its profits. As part of the DPA, which was agreed in 2017 but in relation to which reporting restrictions have […]

PSR publishes TOR for card-acquiring services review

The PSR has published its final terms of reference for its market review into the supply of card-acquiring services. the review will look at a variety of issues including how merchants buy the services, whether there are alternatives to them and what the market is delivering for both merchants and consumers. The PSR aims to […]

Treasury writes to Treasury Committee on no-deal planning law

The Treasury has written to the Treasury Committee enclosing a draft of secondary legislation that would give temporary transitional powers to the UK financial regulators in the event of a no-deal Brexit that would enable firms and the financial markets to function properly while requirements stemming from EU laws are embedded into UK laws. The […]

ISDA updates Brexit FAQs

ISDA has published an updated webpage with FAQs on the impact of Brexit on ISDA documentation.

SMCR optimisation consultation

As the FCA prepares for the extension of SMCR to most solo-regulated firms next December, it is consulting on a few areas regarding the existing regime for banks and large insurers previously  identified as wanting attention. The proposals set out in CP19/4 include: excluding the legal function from the scope of SMCR; amend the scope of […]

FCA Cryptoassets consultation published

The FCA is consulting on draft guidance on activities that the FCA regulates in this area. Noting that this is an area in which investor activity is on the increase, and where there is still uncertainty about where the regulatory perimeter falls, the guidance will provider greater clarity, and also assist consumers in knowing what […]

Wolfsberg Group publishes sanctions screening guidance

The Wolfsberg Group has published new guidance on how financial institutions should carry out their sanctions screening. It says its guidance is intended to help institutions see how screening can form an effective part of a wider sanctions compliance programme. The guidance looks at: what screening is – and the fundamentals of transaction and customer […]

FCA to look at product governance and research unbundling

A set of oral evidence given to the Treasury Committee includes statements from FCA that: it is now content on how to interpret the mortgage affordability test compliantly with the MCD and now plans to consult on changing it from an absolute test to a relative test; it will be carrying out perimeter work on SME lending […]

New Financial Services head at Womble Bond Dickinson

We are delighted that Jonny Williams has joined the financial services regulatory team at Womble Bond Dickinson UK. More information on Jonny and his appointment can be found here.

FCA confirms Keydata individual fines

FCA has published its final notices banning Stewart Ford and Mark Owen from performing any function in relation to any regulated activity and fining them £76 million and £3,240,787 respectively. Mr Ford held the CF1, 3 and for some time 8 positions in respect of Keydata Investment Services Limited  Mr Owen held the CF1, CF16 […]

New FCA portal for mutual societies

The FCA has launched a new portal to enable mutual societies complete tasks and submit information to the FCA that was previously done online or by post, such as the submission of annual rules and accounts and applications for rule amendments. Mutuals societies can start to register as users of this portal; the FCA will […]

SAR numbers increase but TI unimpressed

The NCA has reported a rise in SARs from the private sector in the past year.  It reports nearly 464,000 SARs received and processed in the year covered by its report.  However, Transparency International says this should not mask the failings in the system. TI is critical of the scarce resources and out of date system […]

HMRC updates MLR help pages

HMRC has updated its website in respect of money laundering supervision. The updates include the addition of webinars on firms’ obligations and how HMRC applies its supervisory duties.

JMLSG updates guidance for MLR changes

JMLSG has updated its guidance to take account of changes to the MLR 2017 that came into force on 10 January. The changes ban firms from setting up anonymous accounts and passbooks or providing anonymous safe-deposit boxes, and direct that CDD take place on all anonymous accounts, passbooks and safe-deposit boxes in existence on that date, […]

Economic Task Force meets and pledges SARs reform

The first meeting of the Government’s task force on economic crime has been chaired by the Home Secretary and the Chancellor. The Government plans that the Economic Crime Strategy Board will meet twice a year and will include senior representatives from Barclays, Lloyds and Santander as well as from UK Finance, the NCA, SRA, Accountants […]

Evaluation of Consumer Credit Directive

The European Commission has opened a consultation to invite views from a range of stakeholders on the functioning of the Consumer Credit Directive (CCD). The purpose of the evaluation is to consider whether the CCD is still fit for purpose given  market developments in the ten years since its adoption in 2008. Responses are invited […]

Treasury Committee publishes SME reports

In October, the Treasury Committee reported on SME finance, making several recommendations including setting out its views on the availability of FOS and the Tribunal for SME disputes, and the suggestion that commercial lending be regulated to protect SMEs. The Government and FCA have now responded to the report. The Government has refused to bring […]

FCA publishes sector views

FCA has published its “Sector Views” setting out its observations from monitoring its 7 selected sectors of: retail banking retail lending general insurance and protection pensions and retirement income retail investments investment management and wholesale financial markets It produces this review to inform its overall approach and ultimately its business plan. The studies identify where […]

Commission reports on AIFMD

The European Commission has published a report showing how the AIFMD has significantly contributed to creating an internal market for AIFs. It says most of its provisions have achieved their intended objectives, although there are some areas that require further analysis. The Commission is due to present a report on the functioning of the legislation […]

Treasury Committee welcomes new move for mortgage prisoners

The Treasury Committee has welcomed FCA’s new commitment to consulting on rule changes which will allow the estimated 120,000 “mortgage prisoners” who are with unregulated firms and 20,000 with firms that are inactive, to switch to active lenders. FCA has already acted to help the lesser number of mortgage prisoners who were with active firms. The […]

UK Finance wants to stay in SEPA

UK Finance has applied on behalf of the UK to stay in SEPA. SEPA is operated by the EPC outside the EU institutional framework.  UK Finance says the SEPA community would support it staying, and its own members want to do so. The final decision will be made on 7 March, but UK Finance anticipate […]

PRA plans CRM eligibility clarification

PRA is proposing changes to its Supervisory Statement on credit risk mitigation, to clarify how financial collateral is eligible as funded credit protection under the CRR. The CRR sets criteria for recognising collateral as eligible for CRM, which include that “the credit quality of the obligor and the value of the [financial] collateral shall not […]

FCA ‘Dear CEO’ letter on misleading financial promotions

The FCA has published a ‘Dear CEO’ letter in which it provides clarity about the communication and approval of financial promotions by regulated and unregulated businesses. The FCA has published the letter after it has recently become aware that firms have been issuing financial promotions which suggest or imply that all the activities they undertake are […]

ESAs advise on crypto approach

ESMA and EBA have published papers on ICOs and crypto-assets. The ESMA paper clarifies which crypto-assets currently qualify as financial instruments and provides its views on gaps and risks. The paper identifies several of these: where assets do not fall within the scope of MiFID financial instruments, there are substantial investor risks.  ESMA says that […]

Council agrees investment firms prudential standards change

The EU Council has confirmed its position on the compromise proposals on a package of changes to the CRR/CRD4 , comprising a Regulation and a Directive, to allow prudential and supervisory requirements to be proportionate to the risk and business profile of regulated firms while ensuring financial stability. The new measures would divide investment firms into: […]

FCA consults on Brexit contractual continuity provision

At the end of last year, the the Treasury published draft regulations making provision for contractual certainty for firms currently passporting into the UK in the event of a ‘hard’ Brexit. Following this, the FCA has published CP19/02 on Brexit and contractual continuity.  This consultation paper is aimed at such incoming firms.  It consults on […]

ESAs report on sandboxes

The ESAs have published a joint report on regulatory sandboxes and innovation hubs. The report shows that 24 EEA Member States have developed hubs but only 5 have regulatory sandboxes. As a result of the study the ESAs have recommended some statements of best practice for national authorities to follow in designing and operating their […]

Brexit and Immigration Law seminar series

One of the most fundamental ways in which Brexit is likely to affect many businesses, is the impact on immigration law.  This is particularly the case for the financial services and insurance sectors, which have long drawn on talent from across the world. Womble Bond Dickinson (UK) LLP is putting on a series of seminars […]

FCA opens temporary permissions notification window

FCA has opened the notification window for passporting-in firms. Firms will need to have notified FCA of their intention to seek full UK authorisation to carry on services in the UK before exit day in the event of a hard Brexit.  FCA has opened the window from 7 January to 28 March, Its website includes a guide […]

Single Financial Guidance Body launched

The Single Financial Guidance Body (SFGB) was launched on 3 January 2019. It brings together three existing providers of financial guidance – the Money Advice Service, the Pensions Advisory Service and Pension Wise – to form a “one-stop shop”. The SFGB’s core functions will be: pensions guidance on workplace and personal pensions money guidance to […]

Up next from FCA

FCA’s latest Policy Development Update highlights a number of publications due before the end of Q1 2019: a policy statement on general standards and communication rules for payment services and emoney providers; consultation and discussion on the investment platforms market study remedies; policy statement on 2019/20 fees and levies; consultation on recovering the costs of […]

ESMA updates MiFID 2 FAQs

ESMA has updated its FAQs on MiFID 2 and MiFIR in respect of: transparency; and commodity derivatives. The updated questions cover, among other things, publication of request for market data transactions and the application of the “price multiplier” field in electricity contract reporting.

Swiss equivalence decision published in OJ

The Commission Implementing Regulation on the equivalence of the Swiss regulatory framework for stock exchanges for the purposes of MiFID 2 has been published in the OJEU and applies from 1 January 2019. The SIX Swiss Exchange AG and BX Swiss AG are considered equivalent to regulated markets.

Government updates Blocking Order regulations

The Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) Protection of Trading Interests)(Amendment) Order 2018 will take effect on 1 February 2019. It updates a 1996 order to reflect updates to the EU Blocking Regulation – which makes it an offence for EU companies and individuals to comply with US sanctions imposed on Cuba, Iran […]

FCA opens window for CMCs to register for temporary permission

In December 2018, the FCA confirmed that as part of its take over of the regulation of CMCs from April 2019, it would require CMCs to register for temporary permission in order to continue to operate from April, and pending submission and approval by the FCA of  a ‘full’ application to continue to do business. […]