Author Archives: Emma Radmore
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 […]
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 it 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 […]
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 […]