FCA’s latest Handbook Notice confirms the following rule changes: to COBS 22 in relation to introducing a ban on selling, marketing and distributing binary options to retail customers, which already took effect...
Author - Emma Radmore
Emma Radmore
With-profits firms should review consumer harm risks
FCA has published its thematic review of firms’ practices in key areas of the with-profits market that FCA had identified as presenting the highest potential for customer harm. The review focused on: investment...
FCA publishes PFOF findings
FCA has published an update to its Market Watch item on payment for order flow. It has now carried out a review of 15 firms, to check how they monitor compliance with FCA requirements around conflicts, inducements and...
EP publishes amended funds law changes
The European Parliament has published a new version of the proposed revised funds marketing Regulation and Directive. Among the changes are: to specify that pre-marketing may be directed at professional investors only;...
FCA consults on fees
FCA’s consultation on fees and levies for 2019/20. Among key proposals are: an increase of minimum fees and flat fees of 2% for the A, and CC1 and 2 fee blocks; unchanged variable fee rates for consumer credit...
FCA publishes research agenda
One of the documents that accompanied FCA’s Business Plan is its Research Agenda. This sets out its intentions in respect of the themes that underpin the Business Plan. The document explains how FCA welcomes...
FCA prioritises culture, customers and crime prevention
FCA’s Business Plan for 2019/2020 holds few surprises. It highlights 4 ongoing cross-sector priorities and three additional longer-term priorities. FCA will focus on: culture and governance, not least in SMCR...
Wholesale brokers ignore Dear CEO letter at their peril
FCA has written a Dear CEO letter to wholesale brokers setting out its thoughts on the key harms the sector poses. The letter explains that MiFID 2 and MAR have significantly raised expectations on market participants...
Complaint levels fall
FCA’s data for complaints against regulated firms for H2 2018 show that complaints decreased by 5%, with PPI complaints falling by 8% – although PPI still accounted for 40% of all complaints. In part this...
PRA proposes amendments to enforcement action settlement policy
PRA is consulting on changes to its policy on the settlement of enforcement action. The consultation proposes changes to its Enforcement Statement of Policy. The proposals include keeping the 30% discount for early...
Treasury presses on with MLD5 implementation
HMT has opened a consultation on the implementation of MLD5. Treasury proposes a number of changes to UK law, and seeks views on its proposals in several areas. Aspects of MLD5 addressed in the consultation include:...
FCA fines SCB £100m for AML failings
FCA has imposed its second largest ever fine for AML controls failings. It has fined Standard Chartered Bank £102.2m for failings in its wholesale bank correspondent banking business and its branches in the UAE. It...
ESAs publish PRIIPs KID FAQs
The ESAs have published further Q&As on the KID requirement for PRIIPs. The updates are on both general topics (in respect of calculating the minimum holding period for a product) and MOPs, in terms of the form and...
FCA gives investigations update
Mark Steward has spoken on partly contested cases, the pipeline and AML investigations. Key points included: the partly contested case process has, since 2017, allowed those subject to FCA disciplinary action to choose...
ESMA publishes appropriateness briefing
ESMA has updated its supervisory briefing on MiFID 2 appropriateness requirements and execution only. The briefing covers: working out when an appropriateness assessment is needed; getting information from clients; the...
SFO speaks on fighting fraud and corruption
Lisa Osofsky has spoken about the global fight against fraud and corruption. One of the key points of her speech is the need to understand how different jurisdictions and different regulators operate. She gave the...
Lloyd’s warns on sanctions evasion tactics
Lloyd’s has issued a new market bulletin on how to counter North Korean and other sanctions evasion tactics. The bulletin points out the constant evolution of tactics to evade sanctions, including using otherwise...
ESMA happy with national product intervention measures
ESMA has issued positive opinions on product intervention measures taken by not only the FCA in relation to binary options, but also the Polish KNF and Dutch AFM (also in respect of binary options), and a further...
EU and Singapore adopt equivalence in derivatives trading venues
The European Commission and MAS have mutually recognised several trading venues as equivalent in terms of their respective trading obligations. The EU has recognised 3 approved exchanges and 2 market operators. MAS has...
FCA makes new rules
FCA’s latest handbook notice outlines all the rules adopted by FCA in its February and March Board meetings, including some not reported on in other FIN items. It includes a fill its of all the Brexit instruments...
FCA finalises CMC SMCR rules
FCA has published its policy statement and final rules explaining how it will apply the SMCR to CMCs. In the main, it has confirmed the rules it proposed, with a few adjustments following consultation. The key elements...
FCA makes binary option banning rules
FCA has published its final position and Handbook Rules on permanent product intervention measures that will ban sale, marketing and distribution of binary options to retail consumers. ESMA has extended its temporary...
London Capital investigation to start
Treasury has announced an independent investigation into what happened at London Capital & Finance. Treasury and FCA both feel there is public interest in a statutory investigation, and so Treasury is using its...
FCA regulation of CMCs starts
1 April saw the start of FCA regulation of claims management companies. Over 900 companies have registered with FCA for temporary permission, without which they cannot operate until fully authorised. FCA will have the...
FCA publishes final no-deal Brexit rules
Perhaps in anticipation of what would follow later in the day, FCA published its final instruments and guidance that would apply in the event of a no-deal, no-implementation period Brexit, on the morning of 29 March...
ESMA fines CRAs for conflicts breaches
ESMA has fined 3 CRAs in the Fitch group a total of €5,132,500 for a series of failures to comply with the requirements of the CRA Regulation relating to conflicts of interest. It found that Fitch UK, Fitch France and...
ESMA updates MiFID 2 FAQs
ESMA has updated its Q&As on MiFID 2 and MiFIR investor protection and intermediaries topics. There are several new questions, including on: reverse solicitation by third country firms the target market of CoCo-bond...
FCA fines GSI £34m for 10 years of poor transaction reporting
FCA has fined Goldman Sachs International £34.3m for failing to provide accurate and timely reporting from the date of implementation of MiFID (November 2007) to March 2017. The failings affected over 220 million...
ESMA updates Q&A on MiFID II AND MiFIR in relation to commodity derivatives topics
ESMA has updated its Q&As on MiFID II and MiFIR commodity derivatives topics. An new answer has been published on the ancillary activity test as it applies to third-country firms and subsidiaries, and the answer...
ESMA renews CFD and binary option restrictions
ESMA is renewing the restrictions on marketing, distribution or sale of CFDs to retail clients for a further 3 months from 1 May. Separately, it has also renewed the restrictions on binary options, so that these...
OFSI publishes Brexit counter-terrorism guidance
OFSI has published guidance on the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. The Regulations, made under SAMLA, impose various bans and requirements, and create offences with penalties. The Regulations...
2019 Financial Crime Compliance Summit
Emma Radmore is pleased to be presenting at the Compliance Register’s Financial Crime Compliance Summit on 25 June. To book, please see this timetable and contact the Compliance Register.
FCA clarifies MAR status on hard Brexit
FCA has updated the information on its website about the Market Abuse Regulation, to clarify that the Treasury’s intention is to convert MAR and the Short Selling Regulation into UK law on a hard Brexit. This...
FCA extends temporary permissions window
In light of the current short extension to Brexit, FCA has decided to extend the notification window for EEA firms to apply for temporary permissions. The window was due to close on 28 March, but will now close on 11...
FCA plans UK Benchmarks register
FCA is planning a new UK Benchmarks Register to replace the ESMA register post-Brexit for UK supervised users, for use by them and UK and third-country supervised benchmark administrators that want their benchmarks to...
JMLSG proposes credit union and brokerage services updates
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...
Treasury Committee asks for London Capital inquiry
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...
EP upset over rejected AML blacklist
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...
OFSI updates on sanctions approach
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...
Lords Committee praises Bribery Act
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...
FCA publishes investment platforms market study
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...
What the Spring Statement brings for regulation
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.
Treasury Committee reports on AML and sanctions
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...
FCA fines Carphone Warehouse for insurance misselling
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...
FCA finalises guidance on SoRs and responsibilities maps
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...
FCA confirms FOS increase
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...
FCA makes Directory rules
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...
Council rejects high risk list
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...
FCA writes to P2P platforms on wind-down plans
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...
FCA targets high-cost credit firms
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...
FCA unhappy with motor finance commission models
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...
FCA updates rules
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...
Up next from FCA
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...
FCA calls for costs and charges disclosure improvements
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...
Treasury updates on NCCTs
Following FATF’s meeting last week, Treasury has issued an update on the list of NCCTs to reflect the FATF conclusions.
No more Rolls Royce or GSK prosecutions
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...
Sara Lawson to be SFO General Counsel
SFO has announced its appointment of Sara Lawson as its new General Counsel. She will take up the post in May, replacing Alun Milford.
FATF plenary updates AML control reviews
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...
FCA welcomes MiFID 2 impact on research
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...
OFSI imposes first sanctions breach fine
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...
Select Committee calls for Overseas Territories BO registers
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...
HMRC publishes self-reporting guidance
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...
FCA takes first competition action
In its first decision under its competition powers, FCA has found that 3 asset management firms have breached competition law by sharing of strategic information, the effect of which was that the firms knew each others...
EBA investigates regulators over Danske Bank
EBA has opened a formal investigation into possible breaches by the Estonian and Danish financial services regulators of EU law in connection with the links of Danske Bank and, in particular, its Estonian branch, with...
EIOPA set out conduct risk framework for product lifecycle
EIOPA has published a framework that sets out what drives conduct risk and how to assess it throughout a product life cycle. It looks at: business model and management risks manufacturing risks delivery risks and...
The IA helps fund managers speak investors’ language
The Investment Association has published guidance that it hopes will help find managers explain technical terms to investors in a way they understand. The guidance both explains key terms and suggests areas where fund...
EU Customers to get currency conversion transparency and cheaper transfer costs
The Commission has published a fact sheet on legislative changes that will give customers from non-Euro Member States access to cheaper intra-EU euro payments. The new Cross-Border Payments Regulation, that will take...
Keep UCITS KIID for MOPs for longer, says industry
Insurance Europe and EFAMA are calling for an extension to the date on which PRIIPs KIDS must be produced for multi-option products. Currently, where a UCITS KIID has been produced for underlying funds, insurers and...
FCA announces London and Edinburgh Brexit briefings
FCA has announced briefings in the second week of March in both London and Edinburgh to help regulated firms prepare for Brexit. Firms can register to attend or view the live webcast.
FCA publishes bank comparable data on customer treatment
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...
FSB asks if BigTech will shake up FinTech
FSB has published a report looking at FinTech market developments in the financial system and what that might mean for financial stability. It is generally excited by the possibilities that FinTech offers and says...
Treasury makes Brexit MLR changes
Treasury has made a statutory instrument making necessary changes to the MLRs consequent on a hard Brexit. The instrument took effect on 13 February and will take effect on exit day. Among other things, the changes:...
FCA calls for prevention over cure in market abuse
Julia Hoggett has spoken on FCA’s views on compliance with market abuse prevention laws. She stressed the importance of a regulatory system (both regulators and firms) working to prevent abuses from happening, as...
MLROs.com financial crime update
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.
Sign up to our repeat SMCR workshop
We are delighted to be hosting a re-run of our sell-out half day workshop on the SMCR for solo-regulated firms. This Compliance Register seminar, at which Emma Radmore, Roseyna Jahangir and Michelle Chance will speak...
Treasury Committee publishes FOS economic crime evidence
The Treasury Committee’s hearing on economic crime continues, and it has recently heard evidence from FOS. FOS received 8,500 complaints about fraud and scams in 2017/18 and has received over 10,000 this financial...
PRA updates fees position
PRA has issued its feedback statement, new rules and a new supervisory statement on certain aspects of its periodic and transaction fees. Its update covers: a revised approach to periodic fees for Designated Investment...
Commission updates advice on high-risk countries
The Commission has published a fact sheet on its new list of high-risk third countries for the purposes of MLD4. The new list contains 12 jurisdictions from the FATF list: the Bahamas, Botswana, North Korea, Ethiopia...
EBA sets up PSD2 working group
EBA has set up a working group on APIs under PSD2. It has published details of its meetings and the group on a new website page.
FCA posts video for SMCR help
FCA has arranged for a video to be made by firms that have already implemented the SMCR, sharing their experiences of adopting it. Contributors share the stories from Virgin Monday, HSBC, State Street and JP Morgan.
ESMA briefs on non-EU branches
ESMA has published a supervisory briefing aimed at helping supervisors dealing with non-EU branches of EU firms. It highlights how the supervisors should ensure that the non-EU branch can comply with the requirements of...
EU reaches political agreement on EMIR Refit
After nearly 2 years of negotiation, the European Parliament and Member States have agreed a targeted reform of EMIR. The Commission wanted to provide simpler and more proportionate rules, and the changes will exempt...
ESMA creates Brexit page
ESMA has created a new web-page on Brexit, setting out how it is preparing for it. Its latest agreement is a MoU with BoE for recognition of CCPs and the Central Securities Depository. It aims to recognise all UK CCPs...
FOS focuses on debt
The most recent edition of Ombudsman News focuses on enquiries FOS has received about debt collection – on credit cards, loans and mortgages. It took on over 1,000 complaints in the area during 2018. As a result...
FCA fines fund manager
FCA has fined Paul Stephany, formerly a fund manager at Newton Investment Management Limited. It imposed the £32,200 fine after it found Mr Stephany twice submitted orders as part of a book build for shares that were to...
Treasury lays Brexit FS SI before Parliament
Treasury has laid before Parliament the Financial Services (Miscellaneous)(Amendment)(EU Exit) Regulations 2019. The wide-ranging instrument amends several pieces of UK and retained EU law relating to financial...
TI publishes latest CPI
The latest Corruption Perceptions Index contains few shocks, but a few pithy observations from Transparency International. The top 10 includes 4 Nordic nations, and comprises Denmark, New Zealand, Finland, Singapore...
FCA updates MiFID expectations
FCA has set out how it proposes to use its temporary powers under the draft legislation Treasury has put forward. It plans in principle to make transitional measures that will ensure that firms do not need to prepare...
Commission makes MLD4 RTS on third country risks
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...
Regulators consult on FSCS MELL
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...
BSB consults on regulatory references good practice
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...
FCA feeds back on RND and Plevin issues
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...
FCA consults on retirement outcome improvements
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...
Tribunal rules on Burns costs
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...
Solicitor fined for AML breaches
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...
FCA makes new rules
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...
CMA updates investment consultancy implementation timetable
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...
FMLC writes to Treasury on Brexit regulations
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...
Treasury Committee launches post-Brexit FS inquiry
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...
SFO announces Tesco DPA
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...