Author Archives: Emma Radmore
FATF has updated on recent discussions with the FinTech and RegTech sectors. It has recently focused on: using digital IDs for CDD. Institutions increasingly use this, and discussions focused on whether there is any need for change or clarification in the FATF recommendations to support the practice; and the regulatory landscape for crypto-assets. Participants stressed […]
The European Commission has reported that consumers still face some obstacles when trying to compare investment funds, life insurance or personal pensions. The report finds that recent EU measures, such as MiFID 2 and the PRIIPs Regulation, should help, but that consumers find a great variance in costs for similar product categories cross-border. It also says most consumers […]
Robert Barrington, Executive Director of Transparency International, has written to David Green at the SFO warning that DPAs, while a useful tool that TI supports must nevertheless be used properly, so as not to become a “soft option” for those guilty of corruption. TI is concerned that discounted DPA settlements will give that impression. The […]
Barclays has confirmed that FCA and PRA have issued draft warning notices in respect of their investigations into the the bank and its group CEO Jes Staley in respect of an attempt by Mr Staley to identify the author of an anonymous letter. The regulators propose a fine for breach of Individual Conduct Rule 2 […]
Philip Hammond is to use the G7 and IMF meetings in Washington this week to call for: international agreement on denying North Korea access to finance. He wants all jurisdictions to push their banks and insurance companies to be more alert to spotting new methods of deception that attempt to bypass restrictions; and the IMF to target global corruption. He […]
HM Treasury and the US Treasury Department have announced the formation of a Financial Regulatory Working Group, to formalise engagement on bilateral regulatory cooperation. The group is scheduled to meet twice a year
Following its vote to approve MLD5, the EP has now published the provisional version of the approved text.
FCA has created a new page on its website explaining the basic advice regime under MiFID 2 and the IDD. It explains it needed to update its guidance to firms to explain the impact of these pieces of legislation. In particular, it addresses how it needed to apply some MiFID 2 requirements (or “at least […]
The latest complaints data from FCA shows 3.76m complaints were received by firms in the second half of 2017. This is a significant increase on the previous half year, with 1.55 million complaints relating to PPI – 40% more than the previous half year and the highest level for over 4 years. Similarly, firms paid […]
The European Parliament adopted in plenary session on 19 April the proposals for MLD5. In an EP press release prior to the vote: the proposals to require public access to beneficial ownership information, to introduce registers for beneficial ownership of trusts and for banks accounts and safe deposit boxes were highlighted as important measures; EP […]
We are pleased to be hosting and speaking at a breakfast briefing for MLROs.com, giving an update on financial crime prevention laws and regulations and related developments. Attendance is free, but please register through MLROs.com, where you will find further details of the event.
FCA has published an insight article looking at the ongoing problems for victims of APP scams. The article looks at initiatives to minimise the risks of falling victim to these scams and, in particular, how the advent of Faster Payments brings both advantages and bigger risks to consumers. The article considers the potential safety feature […]
We have written an article on FCA’s proposals for updating the Financial Crime Guide.
FCA’s latest policy development update does not promise anything particularly new. Key deadlines for the next quarter include: policy statement on regulatory fees and levies, with consulation on rates – during April; changes to rules and guidance in SUP under the PSR – now overdue; and possibly a policy statement on the FSCS funding review.
FCA has released several documents resulting from its asset management market study. The key documents are: final rules focussing on the duties of fund managers as agents of the fund investors. The changes will require fund managers to make an annual assessment of value and to appoint at least 2 independent directors comprising at least 25% of […]
The Commons Committee for Exiting the EU has published a report setting out the key tests it says any deal agreed by October must meet. From the financial services perspective, the report notes the critical importance of UK providers being able to continue to sell their products into EU markets as they currently do and […]
The Treasury Committee has announced a new inquiry into economic crime. One part of the inquiry will look at the AML and sanctions regimes in the UK and how firms, individuals and the wider economy are impacted by them and the UK legislative and regulatory framework around them. The other will look at the economic […]
FCA has warned firms it is prepared to take action against those who have failed to implement rules that have now been in force for a year designed to clearly show customers who are due to renew their general insurance the premium they paid the previous year. RAC has just agreed to contact customers after […]
John Glen, Economic Secretary to the Treasury, has responded to the Lords EU Financial Affairs Sub-Committee’s January report on the future of financial regulation and supervision post-Brexit. The response, which was prepared before the most recent developments on the Brexit arrangements, notes that the Government is alive to many of the issues the report raised and sets out […]
FCA has published a draft of its approach to enforcement and supervision. The documents follow its publication of its Mission, in which it committed to publishing a series of documents setting out how it carries out its main activities. The approach to supervision explains FCA’s commitment to being forward-looking and pre-emptive, focusing on firms’ cultures […]
FATF has reported on its work and priorities to the G20 Finance Ministers and Central Bank Governors meeting. The report covers its recent and future work on key initiatives, including improving transparency in beneficial ownership information, bank derisking, and the risks and opportunities of fintech, regtech and virtual currencies.
Camilla de Silver of the SFO has spoken on prosecutors’ priorities. She started by noting the role of her audience in getting in place policies and procedures that would be adequate to provide a defence to an allegation of breach of s7 Bribery Act. She commented that, to date, SFO has not come across a […]
Jonathan Davidson has spoken on getting affordability right in consumer credit. He said that as the UK consumer credit sector is growing, so are concerns about excessive debt. FCA does not consider the sector has yet reached levels of debt that are likely to be harmful to lenders. His focus was on harm to borrowers, […]
The Banking Standards Board has published its annual review. Its key point is that, last year, it carried out the largest ever survey of behaviours, competence and culture in UK banking. It noted that the scores to its 36 questions improved in comparison with the previous year for 25 of the questions, and declined for […]
John Griffith-Jones has reflected on FCA’s first 5 years of operation, since it took over from the FSA. He outlined: highlights – specifying FCA’s engagement with pension exit charges, general insurance renewals, interest-only mortgage work, FX and LIBOR issues and reform, MiFID 2 implementation, the Innovation Hub, market abuse enforcement, fixing PPI, the asset management […]
The Treasury Committee has written to Caroline Wayman, Chief Executive of FOS, following an episode of “Dispatches” that suggested FOS was staffing cases with individuals with inadequate training or understanding of financial products, and claimed some cases had been decided in favour of banks without a proper reading of the files. Nicky Morgan’s letter asks […]
The JMLSG has published proposed revisions to the text of sector 12 (Asset Finance) and sector 17 (Syndicated Lending). The proposed revisions update the descriptions of how the sectors work, how to assess the risks in the sectors and how to identify who customers are. As the proposed changes are considered relatively minor, the period […]
Philip Hammond gave his long-awaited speech on financial services and the future. He referenced: that financial services is not just a London business and that two-thirds of financial services jobs in the UK are outside London Theresa May’s speech setting out what the UK wants from a partnership with the remaining EU his challenge to […]
Nicky Morgan has welcomed the “long overdue” review into the Co-op Bank. She had written to Andrew Bailey in February to ask why the review, announced by George Osborne in November 2013, had not yet started. The response from FCA confirmed that the review had to wait until enforcement action had concluded and noting the […]
The Wolfsberg Group has published the updated version of its Correspondent Banking Due Diligence Questionnaire and related guidance material. It also notes that it has become aware that institutions have been using the CBDDQ for other purposes and has now produced a shorter, more basic, “Financial Crime Questionnaire” which it hopes industry will find helpful.
Treasury has approved the revised JMLSG Guidance that the JMLSG submitted in December 2017.
Treasury has published its AML and CTF supervision report for 2015-2017. It notes the two most critical legislative developments during the period as the CFA and MLRs 2017, and notes the strengthened supervision that OPBAS will bring. The report shows many successes, such as non-compliance levels in no more than 5% of entities reviewed, with […]
FCA has fined Guillaume Adolph, a former short-term interest rate derivatives trader with Deutsche Bank, £180,000 and banned him. It had originally issued its warning notice in early 2014 but proceedings were stayed because of SFO investigations. FCA found Mr Adolph had improperly influenced several of the bank’s LIBOR submissions over a period of nearly […]
Theresa May, speaking at Mansion House, set out her vision for the future economic partnership between the UK and the EU. In relation to financial services, she explained why existing models will not work. For example, the Norway model would keep the UK in the single market but would mean having to implement new EU […]
Treasury has published an updated AML advisory notice reminding firms of their obligation to apply EDD for higher risk jurisdictions. It has produced a table of relevant jurisdictions, showing which ones it recommends firms consider as: high risk and apply countermeasures and EDD measures in accordance with the risks (North Korea) high risk and apply EDD […]
FCA’s latest Handbook Notice confirms changes to: FEES to ensure the life and pensions intermediation class can still benefit from support from the retail pool SUP to align the Financial Crime Annual Return to the MLRs and PEP guidance. The changes seek to make the terminology in the various measures consistent and guard against firms […]
FCA has published a policy statement setting out its feedback on what is a “personal recommendation” in relation to retail investments, as part of its work on the FAMR. The new guidance, which will be in PERG, is aimed in part at reassuring firms that there is information they can give clients, and can even […]
The Banking Standards Board has published some supporting guidance to its principles on fitness and propriety assessments. It focuses on helping firms identify and deal with the risks and issues that may arise when they are carrying out the fit and proper assessment of their certified staff. The guidance addresses establishing pass/fail criteria and evidencing […]
PRA has published an update on responses to certain parts of its CP18/17 Occasional consultation. The update explains how PRA prepared to bring into force rulebook changes relating to the implementation of the Benchmark Regulation, MiFID 2 and the IDD, pending completion of relevant legislative changes.
The CMA has published an update of its progress on its market investigation into investment consultants and fiduciary managers. Since it started its reference last September, it has, among other things, visited three large investment consultants and held hearings with a range of providers and stakeholders. It has also completed a large quantitative survey of […]
UK Finance reports that initial impressions of MiFID 2 implementation are that it has been smoother than expected. While there have been some teething problems and outstanding issues, firms seem, generally, to have been able to adapt within the implementation deadline.
The Investment Association has announced its new FinTech accelerator for the asset management industry, to be called Velocity. It will launch later this year and will take two cohorts per year of between 4-8 firms, and help them to turn their technology into business-ready solutions.
The Sanctions and AML Bill has heard its second reading in the Commons and now passes to the Public Bill Committee stage on a date not yet announced.
The Tribunal has handed down its decision in One Insurance Ltd’s case against FCA. The company had complained that FCA had identified it in its notices to One Call Insurance Services and John Radford, and that the notices contained statements that were prejudicial to the company. Because One Call had inadvertently wrongly used client moneys, […]
FCA and the US CFTC have signed a memorandum of understanding to collaborate on FinTech initiatives powered through FCA’s Innovate and CFTC’s LabCFTC processes.
FCA has launched a call for input on using technology to make regulatory reporting easier. It refers to its 2017 “TechSprint” in which it brought together firms and technology companies to look at challenges and solutions. The meeting came up with a proof of concept to make regulatory reporting requirements machine-readable and executable. The Call […]
The Treasury Committee has opened an inquiry into small and medium sized enterprise finance, addressing lessons learned from RBS’ Global Restructuring Group, and the state of the market for SME finance. The inquiry seeks to consider: The extent of competition in the SME finance market; The sources of funding available to SMEs, including crowdfunding and […]
The Treasury Committee has published the final, unredacted skilled persons’ report into the RBS treatment of SME customers in its Global Restructuring Group. It had given FCA until 16 February to publish this, but FCA did not do so and therefore the Treasury Committee has now done it.
FCA has published a letter from Megan Butler reminding firms of FCA’s expectations when they are advising on pension transfers. The letter contains details of key publications from FCA on the topic.
FCA’s new-look update on its service standards shows that it met most of its targets for various regulatory tasks, including authorisations, passport notifications, dealing with queries and customer satisfaction. However, it did fall slightly short on some applications, particularly consumer-credit related ones, and some of its work on passports.
EU ambassadors have confirmed, on behalf of the Council, that the transposition deadline for the IDD should be delayed until 1 July, and the application date to 1 October. The EP and Council, however, are not expected to adopt the necessary amending Directive until March, after the 23 February transposition date, so that the delay […]
FCA’s regulatory sandbox has supported 60 firms with innovative ideas since its launch in 2016. To date, it has allowed firms to conduct tests in the UK only, but FCA is now planning to expand it and is seeking views on the creation of a global sandbox. This would allow firms to conduct tests in […]
The European Commission has updated its website to provide information on how Brexit will affect banking and finance rules. Separate pages address: markets in financial instruments banking and payment services post-trade issues asset management credit rating agencies insurance and reinsurance and statutory audit Each page looks at the impact of withdrawal on authorisations, contracts and […]
The Court of Appeal has dismissed an appeal by a customer of a spread-betting company (IG Index), who claimed IG Index’s failure to close out in accordance with its terms of business caused him to incur greater losses than need have been the case. IG Index’s terms said, among other things, that it had absolute […]
Andrew Bailey has written to the Treasury Select Committee setting out a summary of the powers “FCA does not have”. It has been asked many questions in the context of the RBS GRG investigation. The letter sets out: FCA’s basic remit over regulated activities and its role as the UKLA as well as its powers […]
MEPs have approved the proposal to add Tunisia, Sri Lanka and Trinidad and Tobago to the list of high-risk third country jurisdictions under MLD4. The vote passed the additions, despite continuing dissatisfaction among many MEPs over the inclusion of Tunisia.
We are hosting and presenting the morning session of the Financial Crime Compliance Certification course on 14 March. Suitable for senior managers needing a broad understanding of financial crime prevention laws and regulatory expectations, those new to the area and anyone else needing a refresher. Places limited, please book through the Compliance Register.
EBA has launched the 2018 stress test. It will cover 48 banks and EBA expects to publish the results in early November.
In the latest sentence to be handed down following FCA’s successful prosecutions of individuals involved in the Symbiosis Healthcare scheme, Samrat Bhandari has been imprisoned for 3.5 years and disqualified from being a director for 12 years. He was found to be the controlling mind behind a scheme that cold-called, used pressure sales and produced […]
The latest edition of Ombudsman News features problems and complaints relating to travel insurance. It notes that most disputes are around what is covered and what is not, and FOS says it is encouraged that it is upholding fewer complaints than previously – which it says indicates insurers are increasingly treating their customers reasonably. The […]
The Economics and Home Affairs Committees in the EP have voted through additions to the Commission’s MLD4 blacklist of high risk jurisdictions by the narrowest of margins. The proposal was to include Tunisia, Sri Lanka and Trinidad and Tobago in the list. The debate was over the inclusion of Tunisia. Many MEPs expressed incomprehension that […]
FCA has published decision notices in respect of One Call Insurance Services Limited and its majority shareholder John Radford. FCA plans to fine the firm £684,000 and restrict it from charging renewal fees to customers for 121 days (which would cost it around £4.6 million). FCA took action for perceived breaches of client money requirements […]
Philip Hammond, together with David Davies and Greg Clarke, has written an open letter to businesses setting out what the UK wants to see in the post-Brexit implementation period. The letter says the Government is clear that the UK and EU access to each other’s markets must continue on the current terms during the period […]
The provisions of the Criminal Finances Act introducing unexplained wealth orders as a new investigatory tool take effect from 31 January.
The Sanctions and AML Bill is due to finish its Lords stages this week with a “tidy up” reading in the Lords on 24 January. It will then pass to the Commons.
The Commission’s Delegated Regulation adding Ethiopia to its list of high risk countries under MLD4 has been published in the OJEU.
The joint committee of the ESAs has published an opinion on the use of innovative solutions towards CDD. The opinion forms part of wider work on the “responsible and effective” use of innovation to enhance AML/CFT controls. The opinion looks at the balance between making controls more efficient against potentially weakening AML/CFT safeguards. The ESAs’ […]
We have written an article on the current status of MLD5.
FCA has published a policy statement in response to feedback received from a consultation on depositing client money in unbreakable deposits. The consultation responded to difficulties faced by investment firms in depositing client money at banks. This was deemed to be partly due to the combined effects of the liquidity rules applicable to banks and […]
FCA has published its third policy statement on IDD implementation, responding to feedback received on various consultations and providing near-final rules. In relation to life insurance distribution business, it covers requirements relating to: Inducements; Suitability and appropriateness; and Information and product disclosure. In relation to all insurance distribution business, it covers requirements relating to: Conflicts […]
We have written an article for Compliance Monitor summarising the key changes PSD2 brings to UK law.
Theresa May has chaired a meeting of senior executives from a number of financial institutions to discuss the opportunities and challenges Brexit presents. She noted the UK’s aim of agreeing an implementation period by the end of March, while Philip Hammond said the Government is prioritising the needs of consumers and tax payers. For their […]
The EP’s Legislative Observatory has been updated to indicate: a date of 16 April for a hearing on MLD5; and a date of 28 February for a hearing on the IDD extension.
FCA’s latest Policy Development Update promises, among other things: policy statement on regulatory fees and levies by the end of March; the delayed policy statement on further implementation of the FAMR; consultation on the Money Market Funds Regulation in January; the final policy statement and near final IDD rules, also in January; and consultation in […]
The EP’s legislative observatory has opened a file for the debate on delay of the implementation date for the IDD, but as at 9 January no date had been set for debate.
ESMA has published several lists of documents and information relating to MiFID 2. It has published: a public register of derivative contracts subject to the MiFIR trading obligation a list of trading venues temporarily exempted from open access under MiFIR and a first set of position management controls for commodity derivatives. It has also decided […]
The EU has added to its list of designated persons in relation to North Korea to align its list with UN measures. The EU has already autonomously listed several others. The Council now intends to ensure swift transposition of the changes.
Transparency International has highlighted and criticised the role London plays in international money laundering. It comments on a new investigation focusing on structures used to help sell frozen assets of the former Ukrainian President. TI notes the key role that UK based professionals helped structure the web of companies that allowed the sale to take place. […]
MiFID 2 implementation date has finally arrived. We have written an article to remind firms of the key changes and action points. FCA has also published a series of updates covering: transitional arrangements for trading venues, which confirms FCA has agreed a transitional arrangement for ICE Futures Europe and LME, such that the open access […]
The Commission has ruled the Swiss Exchange AG and BX Swiss AG as equivalent to regulated markets under MiFID 2.
The Court of Appeal has handed down judgement following an appeal by Angela Burns, former NED of 2 mutual societies. In 2012, the then FSA had fined and banned her after it found she had recklessly, and in breach of her fiduciary position as a NED, failed to disclose conflicts and had used her positions […]
The Wolfsberg Group has updated on its work on the correspondent banking due diligence questionnaire, which it updated in October 2017. Following a review and feedback, it has decided only to publish the DDQ more widely when there is an additional set of materials. This will provide better and more focused guidance and set out […]
JMLSG has published further amendments to its Guidance, most recently updated in June 2017, and submitted the entire revised Guidance to Treasury for approval. Atlhough the amended Guidance will have legal status only when approved, firms can now use the amended provisions if they wish.
FMLC has published a paper exploring the basis of UK trade with the EU following Brexit, and the interplay this will have with World Trade Organization (WTO) principles. As many commentators have noted, the basis of UK-EU trade could take the form of the UK’s continued EEA membership, a transitional arrangement, a new bespoke treaty, […]
Following the announcement earlier this year of the new Office for Professional Body Anti-Money Laundering Supervision (OPBAS), which will operate within the FCA to oversee the 22 accountancy and legal professional body AML supervisors in the UK, the Treasury has confirmed that the necessary OPBAS regulations have been laid in Parliament and will take effect […]
UK Finance has published guidance for firms on product governance and retail costs and charges under MiFID 2. The guidelines on product governance look at the “target market” criteria, which include recommendations on information exchange between manufacturers and distributors. UK Finance notes that MiFID 2 will have the effect of creating industry-wide renegotiations and has […]
The Treasury Committee has published a report which supports a time-limited “standstill” transition arrangement after the Brexit Article 50 negotiations are finished. It thinks it should be simple to negotiate these, to provide certainty as soon as possible and maximise the time available for longer-term discussions. The report also notes that, for the financial services […]
FCA is consulting on how firms and individuals will manage the transition to the extended SMCR. Its key proposal is to grandfather persons from the existing approved persons regime, so that firms can focus on embedding the cultural changes required rather than filling in forms. FCA also seeks views on whether to extend the duty […]
The Department for International Development and the Home Office have published the UK’s anti-corruption strategy for 2017- 2022. It is predicated on six priorities, which include strengthening the integrity of the UK as an international financial centre and reducing corruption in public procurement and grants. Initiatives will include: greater transparency over ownership and control of […]
The Complaints Commissioner has rejected a complaint against FCA from complainants who suffered loss when a firm that had passported into the UK sold products that were outside its permission. The firm was a Cypriot insurance mediation firm, and the Financial Services Register showed its passport was under the IMD. However, the firm sold investments […]
FCA has published a policy statement on its consultation on FAMR and insistent clients. Respondents were generally supportive of FCA’s proposed PERG guidance and also asked for more guidance in some areas. FCA will publish the new guidance in early 2018 and directs firms wanting to make use of the amendment to the RAO definition […]
At FCA’s Board meeting on & December, it made several new rule instruments, covering (among other things), several changes to take effect from 3 January 2018: minor changes relating to MiFID 2 implementation, including a new definition of “high frequency algorithmic trading technique”, amending various definitions relating to derivatives to ensure they reflect changes to […]
Thank you to all of our FIN readers who nominated us for awards at the Compliance Register Platinum Awards 2017. Emma was delighted to retain her award for “most outstanding compliance trainer“.
Megan Butler has spoken on the fundamental importance of co-ordination between national regulators, particularly in dealing with financial crime and cyber-threats. She looked at the particular benefits and risks that machine learning and algorithmic trading have brought. She stressed the importance of firms reporting material breaches, and the need to let FCA know when they […]
The ESAs have published draft RTS under MLD4 on how credit and financial institutions should manage their AML/TF risks at group level where their group includes branches or major subsidiaries in third countries that do not permit group wide policies to be used. The RTS include practical steps institutions should take, such as: getting customer […]
FCA has fined Bluefin Insurance Services Limited £4,023,800. It found the firm had inadequate systems and controls, as it held itself out to be truly independent but did not properly manage the conflicts that arose by virtue of its status as wholly owned subsidiary of AXA UK plc. As a result it used a policy […]
Treasury has revealed its “Investment Management Strategy II“, which sets out the Government’s priorities to ensure the UK remains a globally competitive sector for asset management. The approach focuses on six principles: establishing Centres of Excellence to strengthen the talent pipeline continuing to develop Fintech solutions such as blockchain enabled digital funds working to attract international […]