Monthly Archives: February 2019

FCA takes first competition action

In its first decision under its competition powers, FCA has found that 3 asset management firms have breached competition law by sharing of strategic information, the effect of which was that the firms knew each others plans during one IPO and one placing process, when they should have been competing for shares. The firms in […]

EBA investigates regulators over Danske Bank

EBA has opened a formal investigation into possible breaches by the Estonian and Danish financial services regulators of EU law in connection with the links of Danske Bank and, in particular, its Estonian branch, with money laundering. The investigation follows a request from the European Commission, pointing out the duties of home and host state […]

Final report on wholesale insurance broker market study published by FCA

Following the initiation of its market study into the wholesale insurance brokers market in November 2017, the FCA has now published its final report. The focus of the market study was on the following five areas: the possibility of some brokers being able to exercise market power to earn high commission and erect barriers to […]

Court rules that Brexit is not frustrating event for a lease

The High Court has ruled that a European agency cannot terminate the lease of their premises at Canary Wharf on the basis of Brexit being a ‘frustrating event’.  Our article provides more detail on this case and its implications.

EIOPA set out conduct risk framework for product lifecycle

EIOPA has published a framework that sets out what drives conduct risk and how to assess it throughout a product life cycle. It looks at: business model and management risks manufacturing risks delivery risks and product management risks EIOPA hopes the framework will support national supervisors in identifying conduct and consumer protection risks early and […]

The IA helps fund managers speak investors’ language

The Investment Association has published guidance that it hopes will help find managers explain technical terms to investors in a way they understand. The guidance both explains key terms and suggests areas where fund managers could usefully provide better detailed explanations.  It gives examples of where customers frequently misunderstand, and suggests practical steps to help […]

Commission prepares to review Solvency II

Under the Solvency II Directive, the Commission is required to review certain areas covered by the Directive by 2020. Accordingly, the Commission has sent EIOPA a formal request for technical advice on the review of the Directive.  EIOPA is asked to review a number of areas, including: the function of the matching adjustment and volatility […]

ESMA confirms three UK CCPs can be recognised to provide services to the EU

ESMA has announced that, in the event of a no-deal Brexit, LCH Limited, ICE Clear Europe Limited and LME Clear Limited will be recognised as equivalent. The confirmation of equivalence for the purposes of EMIR follows an assessment will ensure the continued clearing of derivatives trades through these clearing houses.

EU Customers to get currency conversion transparency and cheaper transfer costs

The Commission has published a fact sheet on legislative changes that will give customers from non-Euro Member States access to cheaper intra-EU euro payments.  The new Cross-Border Payments Regulation, that will take effect from 15 December 2019, will significantly reduce the price of these transactions and will also bring greater transparency on currency conversion charges […]

Keep UCITS KIID for MOPs for longer, says industry

Insurance Europe and EFAMA are calling for an extension to the date on which PRIIPs KIDS must be produced for multi-option products. Currently, where a UCITS KIID has been produced for underlying funds, insurers and asset managers can produce a generic PRIIPs KID for the overall product, backed up with the specific KIIDs.  But they are allowed […]

FCA announces London and Edinburgh Brexit briefings

FCA has announced briefings in the second week of March in both London and Edinburgh to help regulated firms prepare for Brexit. Firms can register to attend or view the live webcast.

FSB asks if BigTech will shake up FinTech

FSB has published a report looking at FinTech market developments in the financial system and what that might mean for financial stability.  It is generally excited by the possibilities that FinTech offers and says that: so far, incumbent financial institutions and FinTech firms have a relationship that is largely co-operative and complementary; but there is […]

European Parliament votes to abolish high costs for cross border payments within EU

The European Parliament has approved new rules to prohibit high charges on cross-currency payments within the EU. The new rules will mean that charges for cross-border payments in the single euro payments area (SEPA) will be aligned with charges for corresponding national payments in the national currency of the Member State in which the payment […]

Bank of England publishes Financial Markets Infrastructures Annual Report and supporting video

In its capacity as supervisor of financial market infrastructure (FMI) firms, the Bank of England has published its Annual Report, providing an overview  this sector in 2018 and future developments and priorities for 2019. Accompanying the Report, the Bank has also produced a short video describing what FMI firms are, and why they are important […]

Treasury makes Brexit MLR changes

Treasury has made a statutory instrument making necessary changes to the MLRs consequent on a hard Brexit. The instrument took effect on 13 February and will take effect on exit day.  Among other things, the changes: remove references to any EU authority; amend references to EU legislation to state either that the reference is to […]

Pan-European pension product moves a step closer

On 13 February 2019, a new ‘pan-European pension product’ (PEPP) moved a step closer as EU ambassadors endorsed the agreement on a proposed PEPP reached between EU institutions late last year. As a new class of personal pension scheme, it is intended to provide greater choice for consumers saving for retirement and to boost the […]

FCA calls for prevention over cure in market abuse

Julia Hoggett has spoken on FCA’s views on compliance with market abuse prevention laws. She stressed the importance of a regulatory system (both regulators and firms) working to prevent abuses from happening, as this will always be more effective than a system that merely detects when an event has happened. She noted that firms will […]

MLROs.com financial crime update

We are delighted to host our first quarterly breakfast briefing on financial crime prevention laws and regulatory requirements and developments for MLROs.com on 26th February. The event is currently at capacity, but to join the waiting list, please visit the MLROs.com site.

Sign up to our repeat SMCR workshop

We are delighted to be hosting a re-run of our sell-out half day workshop on the SMCR for solo-regulated firms. This Compliance Register seminar, at which Emma Radmore, Roseyna Jahangir and Michelle Chance will speak takes place at our London offices on 1 May. To book, please visit the Compliance Register website. We will also […]

Government announces new powers to protect pension schemes

The Government has announced new powers to protect pension schemes. Read our article on recent developments.

Treasury Committee publishes FOS economic crime evidence

The Treasury Committee’s hearing on economic crime continues, and it has recently heard evidence from FOS. FOS received 8,500 complaints about fraud and scams in 2017/18 and has received over 10,000 this financial year to date. Around a quarter of fraud and scam cases are about APP fraud and another quarter about unauthorised payments.  FOS […]

PRA updates fees position

PRA has issued its feedback statement, new rules and a new supervisory statement on certain aspects of its periodic and transaction fees. Its update covers: a revised approach to periodic fees for Designated Investment Firms; amending the approach to periodic fees for life insurers; updating the Part VII regulatory transaction fees for insurers; updating the […]

Commission updates advice on high-risk countries

The Commission has published a fact sheet on its new list of high-risk third countries for the purposes of MLD4.  The new list contains 12 jurisdictions from the FATF list: the Bahamas, Botswana, North Korea, Ethiopia, Ghana, Iran, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and the Yemen, and 11 additional jurisdictions: Afghanistan, American […]

Financial Stability Board 2019 work programme published

The Financial Stability Board has published its work programme for the forthcoming year. The areas upon which it intends to focus are: addressing emerging vulnerabilities in the financial system; working with standard-setting bodies to finalise and opererationalise post-crisis reforms; monitor the completion of reforms implementation; and evaluate the effect of the post-crisis reforms.  

Government consultation on investment by DC pension scheme

The DWP is consulting on proposals to encourage defined contribution (DC) pension schemes to consider investing in less liquid assets such as smaller and medium-sized unlisted firms, housing, green energy projects and other infrastructure. The proposals include: requiring larger DC pension schemes to document and publish their policy in relation to investment in illiquid assets, and […]

Government provides £329 million funding to NEST to meet master trust requirements

The Government has agreed to provide a contingent liability of £329 million to fund the National Employment Savings Trust (NEST) Corporation so that it can continue to operate in the pensions market as a master trust. The Pension Schemes Act 2017 introduced a new authorisation and supervision regime for master trusts being used for automatic enrolment […]

EBA sets up PSD2 working group

EBA has set up a working group on APIs under PSD2.  It has published details of its meetings and the group on a new website page.

FCA posts video for SMCR help

FCA has arranged for a video to be made by firms that have already implemented the SMCR, sharing their experiences of adopting it.  Contributors share the stories from Virgin Monday, HSBC, State Street and JP Morgan.

ESMA briefs on non-EU branches

ESMA has published a supervisory briefing aimed at helping supervisors dealing with non-EU branches of EU firms. It highlights how the supervisors should ensure that the non-EU branch can comply with the requirements of EU legislation, and understand how the EU firm can manage the branch.  While not overtly aimed at UK firms, the briefing links […]

EU reaches political agreement on EMIR Refit

After nearly 2 years of negotiation, the European Parliament and Member States have agreed a targeted reform of EMIR. The Commission wanted to provide simpler and more proportionate rules, and the changes will exempt the smallest financial counterparties from the clearing obligation, and will create streamlined reporting requirements. It also maintains the current extension period […]

ESMA creates Brexit page

ESMA has created a new web-page on Brexit, setting out how it is preparing for it.  Its latest agreement is a MoU with BoE for recognition of CCPs and the Central Securities Depository.  It aims to recognise all UK CCPs as third-country CCPs in a timely manner now the Commission has made equivalence decisions on […]

FOS focuses on debt

The most recent edition of Ombudsman News focuses on enquiries FOS has received about debt collection – on credit cards, loans and mortgages. It took on over 1,000 complaints in the area during 2018. As a result, it wants debt collection firms to improve how they support vulnerable customers. Nearly half the complaints related to […]

FCA fines fund manager

FCA has fined Paul Stephany, formerly a fund manager at Newton Investment Management Limited. It imposed the £32,200 fine after it found Mr Stephany twice submitted orders as part of a book build for shares that were to be quoted, but then tried to get other fund managers to cap their orders at the same […]

Treasury lays Brexit FS SI before Parliament

Treasury has laid before Parliament the Financial Services (Miscellaneous)(Amendment)(EU Exit) Regulations 2019. The wide-ranging instrument amends several pieces of UK and retained EU law relating to financial services, to address Brexit-related consequences. The instrument will address deficiencies in UK law that would not work after Brexit, revokes various laws that it would not be appropriate […]

ESMA issues statement on derivatives reporting upon ‘no deal’ Brexit

ESMA has published information on how derivatives data that must be reported under EMIR should be handled in the event of a ‘no deal’ Brexit. ESMA’s statement sets out expectations in relation to: reporting by CCPs and counterparties; reconciliation and recordkeeping by trade repositories; portability and aggregation by trade repositories; and timeline for completion of […]

FCA publishes rules and guidance for payment services and e-money sectors

Following its consultation on general standards and communication rules for payment services and e-money sectors, the FCA has now published final rules and guidance on, among other matters, the extension of the Principles for Business and rules on communication in BCOBS to certain payment service providers and e-money issuers. The new rules and guidance will […]

‘Global sandbox’ pilot invites applications

A group of 29 international regulators and bodies, including the FCA, has opened a cross-border pilot sandbox. Applicants that want to test innovative products and services across international markets are invited to submit applications to the UK part of the Global Financial Innovation Network (GFIN). The deadline for applications is 28 February 2019.

FCA publishes call to action for firms to prepare for no-deal Brexit

Under draft legislation published by the Treasury, the FCA and the PRA are to be given temporary powers to make transitional provisions, in order to ensure that most firms and other regulated entities’ day to day UK regulatory obligations will be as unaffected by Brexit as possible. However, the FCA has published a statement setting […]

FCA agrees Brexit MoUs with European securities regulators

As part of the preparation for a ‘no-deal’ Brexit, the FCA has agreed MoUs with ESMA and with EU and NCAs, covering supervision, enforcement and information exchange, including in relation to credit rating agencies and trade repositories.

BoE and ESMA agree MoU

As part of the Brexit preparations, the BoE and ESMA have published an MoU setting out cooperation and information-sharing arrangements in relation to CCPs and CSDs. This agreement, and the adoption by the EC of temporary equivalence decisions for UK CCPs and CSDs, will facilitate continued recognition of UK CCPs and CSDs and their continued […]

ESMA publishes 2019 Regulatory Work Programme

ESMA has published its Regulatory Work Programme for 2019, setting out ESMA’s Single Rulebook work. The matters it is working on for the forthcoming year include: Post-trading RTS under EMIR; RTS relating to registration requirements under the European Social Entrepreneurship Funds Regulation and the European Venture Capital Funds Regulation; and A report to the Commission on […]

FCA publishes updated rules and guidance for fund managers

As part of its follow up work to its asset management market study, the FCA has published new rules and guidance to help asset managers and customers understand more about how funds are being managed. The new provisions include: guidance on how fund managers should describe fund objectives and investment policies; requirements for how benchmarks, where […]

European venture capital funds & social entrepreneurship funds delegated regulations published

The European Commission has adopted delegated regulations under the EuSEF Regulation (346/2013) and the EuVECA Regulation (345/2013). These Regulations respectively introduced measures to allow venture capital funds to market their funds across the EU using a single set of rules. They also made provision for delegated regulations to be developed to specify requirements such as […]

TI publishes latest CPI

The latest Corruption Perceptions Index contains few shocks, but a few pithy observations from Transparency International.  The top 10 includes 4 Nordic nations, and comprises Denmark, New Zealand, Finland, Singapore, Sweden, Switzerland, Norway, the Netherlands, Canada and Luxembourg. The UK is joint 11th, with Germany. All these countries scored 80 or more. At the bottom, […]

FCA updates MiFID expectations

FCA has set out how it proposes to use its temporary powers under the draft legislation Treasury has put forward. It plans in principle to make transitional measures that will ensure that firms do not need to prepare now to make Brexit-related changes to their business. Wherever possible, these transitional arrangements would apply. But in […]