Author Archives: Emma Radmore
LSB has published its first summary report on how banks have applied the Access to Banking Standard. Generally it found banks have used a positive approach, but suggests some improvements, such as improvement in training for staff in branches closest to a branch which is to be closed.
The Treasury Committee has published a report, in which it describes its unanimous support for regulation for the “Wild West” crypto-currency market. The report outlines all the problems and dangers the market presents and calls for proportionate regulation, which could improve customer outcomes, reduce some of the risks and see the UK become well placed […]
FCA has confirmed it has closed its remaining investigations into life insurers, following its thematic review into the fair treatment of longstanding customers in the life insurance sector. FCA has already closed investigations into some of the firms within its study and has now concluded no further action is needed in respect of the last […]
FCA has confirmed its ban on Christian Bittar, formerly interest rate derivative trader at Deutsche Bank. It found Mr Bittar requested EURIBOR submitters to make high or low submissions, both internally and externally, so that he could benefit his own and sometimes other traders’ profitability. Mr Bittar was convicted and imprisoned for his actions, otherwise […]
Treasury and the BoE have announced that Mark Carney is to carry on in his role as Governor of the Bank until 31 January 2020, an extension of 7 months to his originally agreed term, while Sir Jon Cunliffe, deputy-governor with responsibility for financial stability, has also been reappointed.
Treasury has made the Regulations extending the SMCR to insurers. The Regulations bring into force certain provisions of the Bank of England and Financial Services Act 2016 from 13 September to enable the making of the measures necessary to apply the SMCR to insurers from 10 December 2018. There are also transitional provisions delaying the […]
FCA’s latest quarterly consultation focuses on SUP. FCA proposes changes that will update the Gabriel validation rule and FCA guidance on the capital adequacy form for APIs, and update its supervisory principles in line with its Approach document. Consultation closes on 7 November and 7 October respectively.
FCA and the Chartered Insurance Institute have worked together to create a re-assessment test of the level 4 diploma in financial planning. The new “Regulated Retail Investment Adviser Re-Evaluation” will be available from October. FCA encourages firms to use the test and may ask them to use it as part of its supervisory activities if […]
FCA has appointed Sheldon Mills, currently senior director of mergers and state aid at the CMA, as its new director of competition. He will take up the role in November.
The joint committee of ESAs has published the results of its monitoring exercise on automation in financial advice. The ESAs found that automation is growing but that there are still only a limited number of firms and customers involved. Moreover, the risks many had identified with the practice have not materialised, not least because most […]
Lisa Osofsky has given her first speech since taking over as SFO Director. She spoke of her past, as a federal prosecutor and then working in financial institutions. Her speech focused on how SFO has now successfully used DPAs and how she plans to use many more. She noted that SFO will look at whether the company has […]
OFSI has reminded all firms that hold or control funds or economic resources belonging to, owned, held or controlled by a designated person to provide a report to OFSI by 12 October. The report should cover both the UK and overseas where they are subject to UK financial sanctions legislation and should report the value […]
The Committee on Economic and Monetary Affairs has published a report on relationships between the EU and third countries on financial services regulation and supervision. The report calls for a Resolution requiring the Commission to review how current equivalence decision procedures work, to provide greater and clearer transparency, and says there is a clear move […]
HMRC has published its guidance on civil measures it can take to address non-compliance with AML requirements. The guidance looks at HMRC’s role under the 2017 MLRs and how it will use its powers under those Regulations and under the CTA. The note addresses civil measures, but HMRC stresses that it may treat any breach […]
Lisa Osofsky has started her 5 year term as SFO Director.
FCA has confirmed its ban on Arif Hussein following a decision of the Upper Tribunal published in June. Mr Hussein was a derivatives trader with UBS, who engaged in internal chats with a UBS trader-submitter knowing that it would be improper to participate in conduct intended to influence UBS’ LIBOR submissions. FCA found that Mr […]
ESMA has confirmed the ban on binary options will remain in place for a further three months. The current ban, which prohibits marketing, distribution or sale of binary options to retail clients, expires on 2 October. ESMA has reviewed the specific features of certain binary options which make them less risky and as a result […]
Treasury has published guidance for the banking, insurance and other financial services sectors on the impact of what it still describes as an “unlikely” no-deal Brexit scenario. It stresses that increased preparations towards a no-deal were always likely to be necessary the closer Brexit becomes and that accelerating the plans does not mean the Government […]
The European Commission has adopted a Delegated Regulation adding Pakistan to the list of high-risk third countries under MLD4. Member States will be bound to require application of EDD when dealing with any persons from Pakistan. The requirement will take effect 20 days after it is published in the Official Journal.
FCA has started criminal proceedings against Mark Starling for three offences relating to operating CIS without authorisation or exemption over a 9 year period and of fraud. Mr Starling is alleged to have operated schemes that purported to carry out financial futures trading for investors.
FCA is consulting on how it proposes to set fees to recover its costs for setting up the regulatory regime for claims management companies and for ongoing supervision of the sector. The consultation covers fees under the temporary permissions regime and the ultimate full permissions regime. FCA plans to recover as many of its costs […]
Commission Delegated Regulation (EU) 2018/1108 has been published in the OJ. This Regulation sets out RTS relating to the criteria for determining when it may be appropriate to require electronic money issuers and payment service providers who have certain cross-border operations to appoint a central contact point for a particular territory. The RTS also address the […]
FMLC has published a report looking at contract continuity post-Brexit and highlights the legal uncertainties that will continue if there is no clear agreement on the UK/EU relationship. The paper, which reprises many views FMLC has already expressed, also looks at how not only legislation but also firms can take measures to mitigate the risks.
The Upper Tribunal has upheld FCA’s decision to ban Alistair Burns, Director and CF1 of TailorMade Independent Limited, firm that advised on pension transfers and opt-outs, from any significant influence or senior management function because of his lack of competence and capability. It also directed FCA to fine Mr Burns £60,000 for failing to ensure the […]
FCA has added its own views on selling high-risk speculative investments to retail clients. It fully supports ESMA’s measures and notes that ESMA has also recognised the risks of products similar to CFDs. However, it is concerned firms will try to get around the ESMA product intervention restrictions by selling to retail investors products that […]
ESMA has updated its FAQs on the use of its temporary product intervention measures in respect of CFDs and binary options. New questions: state that turbo certificates are not within the scope of the CFD decision as they have different product features to CFDs, including that they are transferable securities for MiFID purposes and are […]
We have written an article setting out the detail of the Sanctions and AML Act.
FCA’s latest Handbook Notice confirms several rule amendments, including: changes to DEPP and EG to explain the status of industry codes of conduct that FCA has formally recognised; changes to several parts of the Handbook including SYSC and COBS in respect of the IDD, to ensure professional firms regulated by FCA meet similar requirements to […]
FATF has published its report on the techniques and tools used by professional money launderers – those who launder money for others, for a fee. FATF has identified that many countries do not properly investigate and prosecute complex and third party laundering. The report looks at the characteristics of the professional money launderers and at […]
FCA has opened a Call for Input to get firms’ and consumers’ initial experiences of the PRIIPs requirements. It welcomes comments generally, but particularly in respect of: determining whether a product is within or out of scope; and the practical aspects of cost and risk disclosure requirements. The Call for Input usefully summarises the various […]
FCA has banned the 4 former directors of a now-dissolved credit broker, Secure My Money Limited. It found the firm misled customers into thinking they had been approved for short term loans and as a result took fees of over £7.2m from around 124,000 online customers. The failings happened over an 8 month period. Customers […]
BEIS has heralded the Registration of Overseas Entities Bill which will require all foreign companies that own UK properties to disclose their beneficial owners on a public register. Key provisions of the Bill include that: any foreign entity that sells or leases property must first publicly declare its beneficial owner(s). If it does not, this is a […]
The Complaints Commissioner has published its annual report on complaints against FCA and FCA has responded. FCA notes that the Commissioner upheld FCA’s decision in 90% of the cases reviewed and generally feels FCA deals with the large majority of complaints fairly. It also takes on board the recommendations as to how it could have […]
FCA has published its annual report on enforcement actions. In 2017/18 it issued 269 final notices (of which only 21 were against individuals), secured 303 regulatory/civil outcomes (mainly involving refusal, variation or cancellation of permission or authorisation) and 14 criminal, and imposed 16 financial penalties which totalled nearly £70m. This contrasts to the £884m of fines 2 […]
Treasury is consulting on a proposed ban on cold calling in relation to pensions. The consultation is a technical consultation on the wording of the legislation necessary to implement the ban, as the policy decision has already been taken following earlier consultation. The consultation period lasts only until 17 August, and Treasury hopes to lay […]
The ESAs have published some further guidance on KIDs under the PRIIPS Regulation. The additions to the existing guidance provide some additional FAQs and updates to the flow diagrams for risk and reward calculations. New questions include confirmation that a KID must be published on the public section of the manufacturer’s website, and guidance on […]
FCA has published its Annual Report and Accounts for 2017/18. The report includes details of: FCA’s work preparing for Brexit; key regulatory changes such as MiFID 2 and PSD 2; work on SMCR extension; thematic work on high cost credit and consumer debt; and the PPI customer information campaign. It also articulates what FCA has done […]
FATF has: reported to the G20 on its current work: highlights of the report include its work on crypto-currencies and assets, improving transparency of beneficial ownership, de-risking, and fintech/regtech and digital identity; published its objectives during its US presidency: it will prioritise work on virtual currencies, as well as the now standard work on CFT […]
Nausicaa Delfas has spoken on the FCA’s approach to Brexit. She looked at how it is preparing and forward to the future. She stressed that FCA is working hard with the Government and other regulators to ensure the smoothest transition possible and promised highly integrated markets in the future regardless of the Brexit outcome. FCA […]
CMA has published a report proposing several reforms to allay its concerns over competition in the investment consultancy and fiduciary management sectors. CMA was concerned that: many pension schemes (around half) choose the same provider for fiduciary management that they use for investment consultancy. CMA is concerned the investment consultant can encourage this and it means […]
We wrote an article for Compliance Monitor on the EU proposals for changes to the way in which AIFs can be marketed.
The Financial Stability Board has reported to the G20 Finance Ministers and Central Bank Governors on its work in relation to crypto-asset markets. It has worked with the CPMI to set up a framework for monitoring the financial stability implications of market developments, and has been working out the metrics for monitoring that it will […]
Treasury has updated its AML advisory notice on high risk jurisdictions. The advisory meets the requirements of the 2017 MLRs to ensure the regulated sector applies EDD to high-risk countries with reference, among other things to the Commission’s Delegated Regulation setting out the high risk jurisdictions. Treasury has updated its guidance following the FATF June […]
The European Commission (the Commission) announced that MLD5 entered into force on 9 July 2018. The new rules introduce stricter transparency requirements, including full public access to the beneficial ownership register for companies. Some of the key improvements include limiting the use of anonymous payments through pre-paid cards and widening customer verification requirements. Věra Jourová, […]
FCA’s latest Policy Development Update shows plans for consultations on fees for claims management companies and for recovering the costs of OPBAS due over the next couple of months, and policy proposals for regulatory fees and levies for 2018/19 due in October. It notes these will address onshoring ESMA regulatory functions after Brexit.
FCA has published a paper looking at how it should approach fairness in price discrimination in financial services. It notes that price discrimination is not in itself unfair as practices such as student discounts are widely accepted. But others are more controversial, such as where longstanding customers receive a worse deal than new ones. Views […]
A new court dedicated to cybercrime, fraud and economic crime is to be built on the site of Fleetbank House, and is expected to be completed in 2025.
FCA has published a suite of papers feeding back on the SMCR extension, and has proposed the creation of a new directory of individuals working in financial services to enable their status and history to be checked. The directory would include all individuals who require FCA approval to hold SMFs and those who fall within […]
FATF and the Middle East and North African FATF have held their third plenary meeting. The meeting updated on a wide range of issues, including discussion on several typology reports and discussion of mutual evaluation and follow up reports on a number of jurisdictions. The plenary also discussed the progress Iraq and Venezuela have made […]
We recently wrote an article for Compliance Monitor setting out themes from recent FCA thematic reviews.
FCA has made new rules. The changes affect several parts of the Handbook, including: miscellaneous minor and clarificatory changes, including a change to the application chapter of SYSC to clarify that certain rules in SYSC 4.3A do not apply to an AIFM investment firm that is not a CRR firm; changes to make the Handbook consistent […]
The European Commission is unhappy with Member State transposition of MLD4. It currently has open infringement procedures against 20 Member States but says most have adopted and notified missing transposition measures. The Commission is now scrutinising those measures, while noting Member States have only until January 2020 to implement MLD5. The Commission is also looking […]
PIMFA and TISA have published a MiFID 2 Feedback Template and a guide on distributor reporting. It hopes the documents will help firms to meet their responsibilities under MiFID 2 and particularly that the Q&A will help distributors to make compliant returns to asset managers. Comments are welcome on the proposed template until 12 July. […]
The Commission has confirmed it will assess, at the end of June, Serbia’s progress and commitments towards meeting its AML obligations and the FATF recommendations. It may then decide to add the country to the list of high-risk jurisdictions under MLD4.
The House of Lords’ Select Committee on the Bribery Act 2010, which was recently set up to conduct a post-legislative scrutiny of the Act, has issued a call for evidence. The Committee’s mandate includes to review the Act’s operation and its enforcement, and to make recommendations to the Government. While the Committee invites submissions on […]
MLD5 has now been published in the OJEU. It is dated 30 May and was published on 19 June. Member States are required to implement it by 10 January 2020.
The Council of the EU has agreed a negotiating mandate for progressing the Commission’s proposals on cross-border marketing of funds. It has also published compromise texts based on the Commission’s originals to form the basis for negotiations with the European Parliament.
We are delighted to speak at and host a half day seminar on 2 October with the Compliance Register on the extension to the SMCR. For details and to book, please contact the Compliance Register.
FCA has written a “Dear CEO” letter on the financial crime risks of crypto-assets. The letter notes the scope for cryptoassets to be used for both criminal purposes and non-criminal purposes that nonetheless present the risk for abuse. The letter sets out what FCA regards as good practice for how banks handle these risks. The letter suggests: that […]
The Council of the EU has agreed measures on criminal sanctions for money laundering offences. A new Directive will set minimum rules for defining money laundering offences and the criminal sanctions for them. The maximum imprisonment will be only 4 years, with additional civil sanctions possible. The directive also caters for exclusion of legal entities […]
Verena Ross has spoken on progress towards a “genuine” single European financial market, focusing on the role of regulation and supervision. She commented that the EU now has a robust and integrated regulatory framework but stressed the importance of supervision. She discussed the importance of taking the time and effort required for proper implementation and […]
FCA has fined Canara Bank £896,100 for failings in its AML systems, and has restricted it from accepting deposits from new customers for 147 days. FCA found that, for a period of over 3 years, the banks failed to maintain adequate systems and did not take sufficient steps to remedy weaknesses that it had been […]
Lisa Osofsky, former US federal prosecutor, more recently a Managing Director and Head of Investigations for EMEA at Exiger, will become the next Director of SFO. She will take up the post on 3 September.
FCA’s latest quarterly consultation proposes the usual minor miscellaneous changes to its Handbook, including; changes to the appointed representatives appointment firm: the changes are spurred on by IDD changes but generally require firms to make a statement that they have complied with their regulatory obligations as principal; the COBS rules for insurance distribution to ensure […]
FCA’s latest Policy Development Update heralds a policy statement on fees and levies rates in July. Otherwise its timetable is quiet, with a policy statement on the MMF Regulation due at some point together with feedback on an increasing number of proposals from quarterly consultations going back 2 years.
ESMA has exercised its product intervention powers under MiFIR to: ban the marketing, distribution or sale or binary options to retail investors from 2 July; and restrict the marketing of CFDs to retail investors from 1 August. The restrictions consist of leverage limits on opening positions, a margin close-out rule and a negative balance protection […]
ESMA has published its final guidelines on certain aspects of the MiFID 2 suitability requirements. The guidelines build on their MiFID 1 predecessor, and broaden them to address technological developments such as a the development of robo-advice and take into account supervisory experience and the results of reviews and surveys. The guidelines also include a […]
ESMA has updated its FAQs on investor protection and intermediaries under MiFID 2. New questions added in May focus on: best execution: a new question addresses what is meant by “other liquidity provider”; client categorisation: new questions look at when and how a firm can assess whether it can treat an individual private investor as a professional client, […]
BoE, FCA and Treasury have published the progress report on the Fair and Effective Markets Review. It says significant progress has been made towards the recommendations. Key conclusions are that: the work on extending the SMCR will achieve the policy intent of the accountability framework already in place for PRA regulated credit and investment institutions; […]
Parliament has set up a new Committee to consider the Bribery Act. It plans to publish a call for evidence in due course.
OFSI has updated its guidance on reporting to it. There is a legal obligation to report to OFSI: known or suspected breaches of financial sanctions; knowing or suspecting that a person is a designated person; or knowing or suspecting that an entity holds frozen assets where that knowledge or suspicion arises in the course of business. OFSI’s […]
Megan Butler has spoken at the AML TechSprint event. She focused on how data and technology can help to detect and disrupt criminal activity and how financial institutions staff can help in the fight against financial crime. She spoke of the insights into criminal behaviour FCA has gained since it introduced the financial crime return. It […]
The ping pong stage of negotiations of the Sanctions and AML Bill took place as scheduled on 21 May, and the two houses of Parliament agreed the text which received Royal Assent on 23 May.
JMLSG has published updates to its guidance in respect of asset finance and syndicated lending. The guidance: in respect of asset finance, describes the main types of asset finance and discussed when its provision involves regulated activities for the purposes of FSMA. It then sets out key features that can decrease or increase money laundering […]
The NCA and Transparency International have warned of the risks Brexit presents of the UK being used as a vehicle for money launderers and corruption. Responding to the NCA’s identification of the risks, TI said: the UK should speed up plans to introduce a public register of the real owners of overseas companies that buy […]
OFSI has published a list of FAQs for importers and exporters focussing on the application of financial sanctions. It notes the separate regimes and potentially the need for separate licences that may be required from OFSI in relation to financial sanctions and the Export Control Joint Unit for trade sanctions. It notes some key risks […]
The Solicitors’ Regulation Authority has fined Anthony Gale, partner at Maurice Smiths solicitors who was also its compliance officer and MLRO, £10,000 for various conduct failings in relation to a number of mortgages. Mr Gale acted on a number of conveyances at the instruction of third parties without confirming the instructions with the client. The […]
The Council has formally adopted MLD5 in its meeting of 14 May. The changes to MLD4, already agreed between the Council and Parliament, include: greater transparency of beneficial ownership of companies and trusts; addressing the risks of prepaid cards and virtual currencies; greater cooperation between FIUs; and enhanced checks on transactions involving high-risk countries. The […]
The Financial Guidance and Claims Act has received Royal Assent. The Act: establishes a single financial guidance body, and sets out its objectives, functions and funding details. It also sets out requirements on regulators to make guidance and permits the making of regulations that ban unsolicited direct marketing relating to pensions and other financial products […]
FCA has confirmed that it will “retire” with immediate effect FG12/15: RDR: independent and restricted advice, and FG14/1: Supervising retail investment advice: inducements and conflicts of interest. It consulted last December on the proposal to do so, as it considers their content has been largely superseded by rule changes, including those implementing MiFID 2.
PRA and FCA have published the first final notice for breach of an Individual Conduct Rule. They have jointly fined James (Jes) Staley £642,430 for breach of Individual Conduct Rule 2 (failure to act with due skill, care and diligence), after he tried to find out who had sent an anonymous letter. The letter claimed […]
The “Ping-Pong” stage of the Sanctions and AML Bill will take place on 21 May.
ESMA has created a new portal for checking the authorisation status of investment firms, trading venues and DRSPs authorised under MiFID 2, UCITS management companies and AIFMs and also funds managed or marketed in the EU.
FCA’s latest Policy Development Update promises over the next couple of months the overdue feedback on fees and levies policy proposals with consultation on rates proposals. No dates are set for any other key papers.
Transparency International has welcomed a cross-party amendment to the Sanctions and AML Bill that will require all British Overseas Territories to introduce public registered to reveal the individuals behind companies formed in their jurisdictions. If they do not do so, a draft Order in Council should be prepared no later than the end of 2020 […]
NCA is to conduct a pre-investigative evidential review into allegations of fraud, money laundering and corruption in relation to the business of the then HBOS Impaired Assets Division in London and the South East, that went wider than the investigation which resulted in prosecutions last year.
In support of the Sanctions and Anti-Money Laundering Bill, the FCO has published out a Policy Note which describes the government’s intended approach to: licensing applications in relation to asset freezes, including how it intends to deal with applications it can foresee, general licenses and common grounds for application; maintaining a similar framework to the current one […]
The FCA has published its second annual report setting out responses from wholesale banking firms to the FCA’s conduct question set. The FCA notes that the second report indicates progress has been made from the time when 5 Conduct Questions were first introduced, in 2015. The FCA indicates that they intend to extend the 5 […]
BEIS is consulting on reforms to the laws governing Scottish Limited Partnerships to address the illegitimate uses to which some SLPs have been put. The Government has found evidence that SLPs have been exploited by money launderers, including one scheme that used over 100 SLPs to move up to $80bn. The proposals include introducing safeguards […]
Ahead of its adoption, the Council and Parliament text of MLD5 was published on 26 April. After formal adoption it will need to be published in the Official Journal, and it will come into force 18 months after that. Austria and the Commission both expressed disappointment that the transparency provisions were not more onerous.
The European Commission has updated its website with notices on plans for Brexit in several industry sectors including financial services. The latest news reports a request from the Commission and Treasury to the ECB and BoE to convene a technical working group on risk management in the transition period. There are also some terms of […]
FCA (in one case together with FOS) has made several instruments amending the Handbook. Changes include: changes to FEES (from 1 April) to ensure better mapping of tariff data and that Directive and non-Directive insurers are treated consistently. Further change creates a new fee-block for consumer credit lending as a mechanism for collecting the levy for […]
Michel Barnier has spoken to Eurofi. He described Brexit as a lose-lose situation, with no added value. He said: there can be no frictionless trade outside the Customs Union and Single Market so businesses will be faced with barriers and checks that are not in place today and this will have an impact on value […]
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 […]