Author Archives: Emma Radmore
JMLSG has published proposed revisions to the chapters on credit unions and brokerage services to funds, in part 2 of its guidance. The updates aim to describe in more current terms what risks the sectors face and how to identify who customers are. The changes to the credit union chapter explains the lower risk nature […]
The Treasury Committee has written to Treasury and FCA asking for an investigation into the events at London Capital and Finance. FCA had told the firm to withdraw its promotional materials for its mini-bonds in December 2018 as it found them to be misleading, not fair and unclear. But the Treasury Committee feels there is […]
The European Parliament has called for urgent resolution of the debate between the EU Council and Commission on the new proposed AML blacklist. The EP had previously rejected 2 submissions by the Commission on the grounds they were not sufficiently autonomous and had supported the Commission in the development of its new methodology. It “regrets” the […]
OFSI has updated its website to reflect the latest legislation and guidance on how the UK will implement on the one hand EU and on the other UN and domestic sanctions in the event of a no-deal Brexit. Legislation has been made under SAMLA to take effect on a no-deal Brexit in relation to Burma, […]
The Select Committee on the Bribery Act has published its post-legislative scrutiny report, which concludes the Act is “exemplary”. Enquiries and evidence have shown it to be a piece of law that works well and that other countries should follow. The only real criticism was to highlight that the Government should give better guidance to […]
FCA has published the final report in its Investment Platforms Market Study. It has concluded that the market is working well for most consumers, but it is proposing changes that will make it less expensive and time-consuming for investors to shop around. The changes aim both to reduce the time and complexity of switching, and […]
In the Chancellor’s Spring Statement, the Chancellor referred to the need to ensure financial regulation can adapt to a no-deal Brexit and then, longer term, to the UK’s new constitutional position.
The Treasury Committee has published a report looking at AML supervision and sanctions implementation, as a response to the inquiry into Economic Crime. The report covers the elements of the inquiry that addressed AML and the sanctions regime. It looked both at the scale of crime and how regulation addresses the risks. The report makes several interesting […]
FCA has fined the Carphone Warehouse over £29 million for misselling its “Geek Squad” mobile phone insurance and technical support product, and acting in breach of its Principles 3,6 and 9. Following whistleblowing reports, FCA investigated and found the firm did not give its sales staff the right training to enable them to assess customers’ […]
FCA has published its finalised guidance to help firms prepare their statements of responsibility and responsibilities maps under the SMCR. The guidance addresses the rules as they apply to each category of SMCR firm, in each case suggesting questions firms should ask themselves to ensure they complete the forms correctly and gives examples of good […]
FCA has issued a policy statement confirming the increase in the FOS award limit. From 1 April, the limit that FOS can award against firms will be £350,000. This amount will apply in relation to complaints about actions on or after that date. For claims about actions before 1 April that are referred to FOS […]
FCA has made its final rules on its “Directory“. The new public register will enable searches on all directors and senior managers, certification staff and other individuals who require qualifications to undertake business with clients. FCA has made rules that will require all firms to report timely and accurate information about their Directory persons. FCA […]
The EU Council has unanimously rejected the Commission’s updated list of high risk third countries. It said the proposal was not established in a “transparent and resilient process that actively incentivises affected countries to take decisive action while also respecting their right to be heard”. The Commission will now have to start again.
FCA has written a Dear CEO letter to loan-based P2P crowdfunding platforms asking them to review their wind-down arrangements. It has recently carried out a sampling exercise which it says strongly suggests that some firms are falling short of the standard it expects. It is particularly concerned about: systems and controls around wind-down, including the […]
FCA has written a “portfolio strategy letter” to firms that provide high-cost lending products such as guarantor loans, high cost short-term credit and unsecured loans for sub-prime customers, home-collected credit, income smoothing products, logbook loans, pawnbroking and RTO. Its strategy also applies to community development finance institutions. FCA notes there are significant variations in size and […]
FCA is likely to propose changes to how commission works in the motor finance sector. It has carried out a review and has found that commonly used models allow brokers discretion to set the interest rate customers pay. This means the broker can potentially earn a higher commission and this can lead to conflicts which […]
FCA has made a number of amendments to various parts of its rulebook, including: amendments to COBS on information relating to pensions savings, taking effect from November 2019 and April 2020; introducing a Devolved Authorities’ debt advice levy; and exempting unauthorised mutual societies from paying fees.
FCA is running behind schedule on some expected publications. Its latest Policy Development Update highlights the following: consultation and discussion on the Investment Platforms Market Study remedies due in March alongside the final Market Study report; feedback on policy proposals on fees and levies, also due in March, with consultation on rates proposals in April; […]
FCA has issued a set of papers on costs and charges disclosures. its feedback statement on firms’ experiences of the PRIIPs requirements concludes that firms find certain issues, in particular relating to summary risk indicators and performance scenarios, hard to deal with, and that some KIDs display transaction costs that are unlikely to be a […]
Following FATF’s meeting last week, Treasury has issued an update on the list of NCCTs to reflect the FATF conclusions.
SFO has announced that, having considered all the evidence, there is either an insufficient likelihood of success, or it is not in the public interest, for it to bring any further prosecutions relating to the Rolls Royce or Glaxo Smith Kline investigations.
SFO has announced its appointment of Sara Lawson as its new General Counsel. She will take up the post in May, replacing Alun Milford.
At the most recent plenary meeting, FATF as usual reviewed its list of jurisdictions with AML deficiencies. Although still disappointed with Iran’s lack of progress, it has continued the suspension of countermeasures, so that countermeasures apply in relation to North Korea, and EDD on a risk-based approach in relation to Iran. Otherwise, the countries with strategic […]
Andrew Bailey has spoken to the European Independent Research Providers Association on the subject of MiFID 2. He noted one guiding principle of MiFID 2 is to ensure that portfolio managers act in the best interests of their clients and are not unduly influenced by third parties. Additionally, both MiFID 2 and FCA have a […]
OFSI has imposed its first publicised financial penalty for breach of sanctions restrictions. It fined Raphaels Bank £5,000 for dealing with £200 of a person designated under the Egyptian asset freezing legislation. The bank notified OFSI as soon as it became aware of what it had done and, as a result, what would have been […]
The House of Commons Foreign Affairs Committee has published a report calling for beneficial ownership registers to be introduced in all British Overseas Territories by the end of 2020. The powers to do this were introduced in SAMLA and have caused controversy, with some territories saying the introduction of registers would adversely impact their financial services sectors […]
HMRC has published guidance for firms on self-reporting a breach of the CFA provisions on failure to prevent facilitation of tax evasion. HMRC stresses that: reporting must be done only by an authorised representative of the firm reporting is not a requirement, and is not a defence however, it may be viewed as part of […]
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 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 […]
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 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 […]
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 […]
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 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.
FCA has published data relating to personal and business customers of banks, showing how long it takes each firm to open a current account for new customers and how long it takes to replace debit cards. The information for each institution comprises both the compulsory information and voluntary information on additional services.
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 […]
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 […]
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 […]
Thank you to all of you who attended our first quarterly breakfast briefing. The next briefing will be on 19 June 2019. To book, please visit the MLROs.com site.
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 […]
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 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 […]
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 […]
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 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 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 […]
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 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 […]
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 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 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 […]
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 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 […]
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 […]
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 […]
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 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 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 […]
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 […]
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 […]
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 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 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 […]
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 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 […]
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 […]
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 […]
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 […]
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 […]
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 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 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, […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
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 […]
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: […]
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 […]
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 […]
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 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.
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.
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 has published its final framework setting out how it will measure the impact of its past interventions.
ESMA is to renew the current restrictions on the marketing, distribution or sale of CFDs to retail clients for a further three months from February 2019.
BoE has made a statement on the equivalence of the future UK legal and supervisory framework for CCPs and CSDs, following a decision by the European Commission to make implementing acts that will allow UK CCPs and CSDs to be recognised by ESMA. The measures would take effect from 30 March 2019 in the event of a […]
Following complaints by banks that AML rules are not effectively and consistently supervised, the Council has agreed to give EBA greater powers over supervision, including allowing it to perform risk assessments on competent authorities and addressing decisions directly to individual banks as a last resort. The proposals must now be agreed with the EP.
FCA has fined Santander £32,817,000 for failing effectively to process the accounts and investments of deceased customers. FCA found the bank did not transfer funds totally over £183m to customers when it should have done and did not disclose problems in its probate and bereavement process to FCA once it became aware of them. The […]
Treasury has published a draft statutory instrument setting out the Financial Services Contracts Regime (FSCR) which will provide run-off mechanisms to the various temporary regimes the government and regulators are preparing to put in place for Brexit. The regime will cover firms that currently passport into the UK under FSMA, the PSRs or the EMRs, and […]
The latest edition of Market Watch outlines FCA’s views on industry implementation of MAR. FCA stresses the importance of industry participants properly calibrating their risk assessments to the markets and asset classes they operate in and showing it is responsive to changes. It notes the importance of strong judgment in market abuse compliance and emphasises […]
The Home Office has updated on the first year’s progress against the UK’s anti–corruption strategy. The update concludes that the commitments made have largely been met, and that the UK is on track to deliver its remaining commitments. including those due in 2019, notwithstanding Brexit. The report highlights a number of points of interest to […]
FCA has finally issued its final notice banning Angela Burns from acting as a NED and has fined her £20,000. Ms Burns acted as NED for two mutual societies and was chair of their investment committees. She provided advice on appointing Vanguard Asset Management Limited as investment manager, and the societies believed this advice was […]
FCA has added a page to its website updating firms on what they could and should be doing to prepare for Brexit. The page is for use by UK and EEA firms and takes them through each various practicality they should consider.
We have written an article for Financial Regulation International on financial crime prevention developments in 2018.
EIOPA has published its report on its evaluation of the structure of insurance intermediaries markets in Europe in accordance with IDD requirements. The report notes a very wide diversity of local distribution channels and differences between nationally adopted definitions. It also found divergence in registration and reporting requirements. Generally, the lack of homogeneity makes it […]
FCA has now finalised its guidance on insider dealing and market manipulation within the Financial Crime Guide. It received 8 responses to its consultation, generally positive. However, some respondents raised concerns about: mandating a duty to prevent these crimes; the risk of firms tipping off by taking some of the actions the guidance proposed; where […]