Author Archives: FIN. Team
Womble Bond Dickinson is delighted to have expanded its offering in the financial services and insurance sectors with the hire of white collar crime partner, Audrey Koh. Audrey has substantial experience of advising clients across many jurisdictions, in particular those based in the UK, US and Europe. Further information about Audrey can be found here.
The High Court has ruled that a European agency cannot terminate the lease of their premises at Canary Wharf on the basis of Brexit being a ‘frustrating event’. Our article provides more detail on this case and its implications.
One of the most fundamental ways in which Brexit is likely to affect many businesses, is the impact on immigration law. This is particularly the case for the financial services and insurance sectors, which have long drawn on talent from across the world. Womble Bond Dickinson (UK) LLP is putting on a series of seminars […]
The FCA has opened a consultation that sets out how it will apply the Senior Managers and Certification Regime (SM&CR) to Claims Management Companies (CMCs), following taking over regulation of them from 1 April 2019. The consultation also sets out when SM&CR may apply to CMCs, and what action they will need to take. The […]
The latest draft Regulations anticipating Brexit relate to capital resources requirements. The draft Capital Requirements (Amendment)(EU Exit) Regulations 2018 are intended to make sure the CRR can continue to operate effectively once the UK has left the EU. Key changes the draft addresses relate to: group consolidation so as to amend the geographical scope of […]
The FSB, Basel Committee, the CPMI and IOSCO have published a joint consultation on incentives to centrally clear OTC derivatives. The organisations want to look at how the post-crisis measures have worked and whether there is a need to fine-tune them. A post-reform evaluation suggests that there are overall good incentives for using central clearing, […]
FCA has announced the creation of the Global Financial Innovation Network (GFIN), in collaboration with 11 other regulators and organisations. This builds on FCA’s plans for a global regulatory sandbox and will create a new framework for innovative firms interacting with regulators, and regulators sharing information. FCA has now published a consultation seeking views on […]
The Payment Systems Regulator has published a report on contactless mobile payments (CMPs). It sees this as a growth area as people become more comfortable with using it, more contactless pay-points are available and functionality improves. As a result, it wanted to be sure it understood relevant issues and the effects of the sector on […]
FCA is consulting on rule changes for loan-based crowdfunding platforms, following its post-implementation review. It has noted the market has developed, and models have become increasingly complex, since FCA’s last review of the sector. It has also noticed some poor practices developing. Now it wants to make changes to ensure: investors get clear and accurate […]
Treasury has published a draft statutory instrument setting out changes to consumer credit legislation consequent on Brexit. The draft has not yet been laid before the relevant parliamentary committees for “sifting”. Once the Committees are ready, it will be laid appropriately. Treasury will need to amend the following legislation to address situations where retained EU […]
FCA has published the interim findings of its market study on competition in the investment platform market. It has concluded that competition is working well for most consumers, but has identified a few areas that need attention to help consumers. It found: barriers to switching are significant and therefore the pressure on platforms to continue […]
FCA is consulting on new guidance on handling complaints about regular premium PPI, to deal with an uncertainty which has arisen since the post-Plevin rules. The Plevin judgment and the rules that followed it say that if a lender fails to disclose at point of sale a large commission payable out of the PPI premium […]
The Payment Services Regulator has published a policy statement following its review of the regulatory fees regime. It has now set out its decisions, and published a standalone document on fees figures for 2018/19.
Sam Woods has written a “Dear CEO” letter to CEOs of all dual-authorised firms on exposures to crypto-assets. PRA understands firms may already have limited exposure to such assets, and is writing to clarify its expectations of how firms behave, particularly in view of Fundamental Rules 3, 5 and 7. The letter sets out what […]
FCA is consulting on changes to complaints handling rules to help victims of authorised push payment fraud. Currently, victims cannot complain to the PSP that receives their payment when their own PSP is not at fault. FCA now proposes rule changes to require firms to handle this type of complaint, and also to allow eligible […]
EBA has published an Opinion in which it asks national regulators to ensure financial institutions are taking practical steps to prepare for a “no deal” Brexit with no transition period. It does not think institutions have been moving quickly enough in their planning and is concerned they are delaying triggering necessary actions. EBA notes that […]
The European Parliament has voted in plenary session to adopt the so called “EMIR Refit” Regulation. The European Commission has proposed that small financial counterparties (SFCs) should not be subject to the current EMIR clearing obligation where they deal with OTC derivatives at a low volume which would not present a systemic risk to the financial […]
Nicky Morgan and Andrew Bailey have exchanged letters of the problems customers faced following TSB’s IT migration. The Treasury Committee had asked about the work FCA had done in advance of the planned migration, its assessment of the problems and its views on TSB’s evidence to the Committee and its communications with customers as well […]
FCA is consulting on draft rules for regulating claims management companies (CMCs) when it acquires regulatory responsibility for them on 1 April 2019. FCA is focussing on 3 key aspects: empowering customers to be confident they have chosen a value-for-money service that is appropriate for their needs; ensuring CMCs get redress for their customers in […]
FCA is consulting on guidance for firms setting out what factors under the Consumer Rights Act they should take into account when they are drafting and reviewing variation terms. The draft guidance sets out a list of things FCA says firms should take into account, which would include: how valid the reason for variation is […]
Following our successful seminar on 10th May, read our blog updates.
The High Court has sanctioned an application by Lloyds Bank PLC, Bank of Scotland PLC and Lloyds Bank Corporate Markets PLC for a ring-fencing scheme. This is the second scheme to come before the courts and be approved, after Barclays Bank plc and Woolwich Plan Managers’ was approved in March. RBS’ scheme has been sanctioned by […]
The Government has published its response to the House of Lords EU Committee Report on financial regulation and supervision after Brexit. It offers assurances that: the UK will continue to lead global standards; the Government is already taking action under the EU Withdrawal Bill to incorporate the acquis. It is working on how to address […]
FCA has published its interim report into the mortgage market. Although it is pleased with how competition is working to the benefit of many people, it has made some suggestions for improvement. It found that there are generally high levels of choice for consumers and that consumers engage with their options, with evidence of switching […]
Treasury has published its response to its consultation on cheque imaging. It received 15 responses, and engaged with 4 other institutions. All agreed that a copy of a cheque should be made available to customers on request, and most agreed that no cheque user should be left out of pocket as a result of any […]
FCA has published the final list of the most representative services linked to a payment account and subject to a fee for the purposes of the Payment Accounts Regulations. Firms will have to use the terminology from 31 October. There are 15 defined services: maintaining the account arranged overdraft unarranged overdraft refusing a payment due […]
Peter Wyman’s report on a review of debt advice funding has been published. The report makes several recommendations, including: face-to-face advice should still be widely available but there should be general and phased shifts by free-to-client providers from face-to-face to phone and then to webchat; free-to-client providers should commit to 20% efficiency savings over the next 2 financial years, […]
FCA has written a “Dear CEO” letter on irredeemable preference shares and similar instruments. FCA is looking to ensure investors have all the information they need to assess the risks and rewards of certain fixed income shares and is particularly concerned about those described or implied in some way to be permanent. It therefore wants […]
The Bank of England has announced that TransferWise, an FCA-regulated non-bank PSP has joined Faster Payments as a direct participant. This is the first non-bank PSP to join a UK payment system settling in central bank money. BoE, FCA and the Payment Systems Regulator all heralded the development.
FCA has clarified its views on the regulation of cryptocurrency derivatives. It has previously explained that cryptocurrencies are, of themselves, not regulated although they may be part of other regulated products or services. Cryprocurrency derivatives, though, may be financial instruments for the purpose of MiFID 2. FCA says those who deal, arrange deals in, advise […]
Please join us for our Fintech and Insurtech Forum in London on 10 May. An expert panel will discuss the latest blockchain trends and breakthroughs. Attendance is free and you can register via our website.
The Court of Appeal has recently upheld the judgements of lower courts in a case where a loan was entered into on the express representation from the borrower that the property would not be used as a residence. When the borrower defaulted, it sought to argue that, despite having completed a question on the application […]
A paper published by the Whitechapel Think Tank, supported by UK Finance, looks at how technology can help the safe validation of identity and verification. It examines how distributed ledger technology can provide a decentralised and secure approach to validating identity and how this could benefit financial services providers and consumers.
FCA has reported that the defendants in its case against Capital Alternatives have been ordered to pay compensation and that it has obtained new undertakings from or injunctions against some of the defendants to protect against the risk of dissipating or diminishing assets.
The Department for Exiting the EU has published a draft Withdrawal Agreement following the conclusion of a key set of negotiations. David Davis and Michel Barnier both welcomed the progress. Mr Davis heralded the agreement, which provides (among other things) that international agreements that arise as a result of the UK’s membership of the EU will […]
In its latest meeting, the Financial Policy Committee focused on: the outlook for UK financial stability generally: it thought these were standard, excepting the Brexit risks, with risks from global vulnerability still being material. Risks from certain markets in the US and in China are elevated, but there seems to be some sign of increasing […]
FCA has updated on its work reviewing the motor finance sector. So far, it has drawn several comforting conclusions, including around general default rates. But the 3% of customers who have the lowest credit ratings have higher arrears and default rates. It also notes that commission arrangements could lead to dealers arranging more expensive than […]
Treasury has published a call for evidence on the role of cash and digital payments in the new economy. It asks for views by 5 June to help it explore how it can support digital payments, support transition from cash economies while maintaining support for cash payments for that that need it, and of course […]
The Payment Systems Regulator’s annual report says 2017 was a record-breaking year for new participants, and it expects many more PSPs to join in 2018. Its early projections suggest 11 PSPs could become direct participants in CHAPS, Faster Payments and Bacs during the year, as opposed to 4 new joiners in 2016. It also reports […]
The European Commission has published an action plan aimed at making Europe a global hub for Fintech. The plan is to make markets safer and easier for new players to access while enabling the financial sector to make use of new technologies. It wants to encourage a cross-border infrastructure for blockchain but using pilot projects. […]
The Association of British Insurers (ABI) has produced a framework designed to help firms operating in the life and long-term savings market to better identify, trace, verify and manage those customers with whom they have lost contact (‘gone-aways’). The voluntary framework, which consists of 11 principles, is intended to support providers in developing, maintaining and […]
In light of the Criminal Finances Act, which already has effect, and GDPR, which applies from 25 May 2018, the Lloyd’s Market Association (LMA) has updated the following market model agreements: Binding Authority Agreement – LMA3113 Consortium Agreement – LMA3145 TPA Agreement – LMA9008A On the same webpage, the LMA has also published model endorsements for […]
Insurance Europe has published a position paper on the consequences of Brexit on existing insurance contracts. The paper discusses: existing (re)insurance contracts that may be affected by Brexit and how customers may be affected; what is currently permitted by passporting rights; when grandfathering is the only solution for existing contracts; and how to allow for […]
Further to the European Parliament’s vote on 1 March 2018, the Council of the EU has published the provisional text of the Directive amending IDD as regards the date of application of Member States’ transposition measures (the Directive). The Directive is intended to apply with retrospective effect from 23 February. The next steps will be […]
FCA has provided an update on its work on product governance in small and medium sized retail banks. Its recent review looked at 2 year fixed rate savings products and how firms’ product governance frameworks help them to identify and manage the ongoing conduct risks of their products. It specifically wanted to assess how firms […]
The Lloyd’s Market Association (LMA) has published guidance on the IDD for UK coverholders. The guidance covers some aspects of IDD, including: product oversight and governance; product information (including the IPID); identifying client needs and advising; and information requirements. While certain part of the guidance are specific to the Lloyd’s market, the LMA has discussed […]
Following on from the general insurance add-ons market study, FCA piloted the publication of value measures data, which includes claims frequencies, claims acceptance rates and average claims pay-outs by an insurer in respect of certain general insurance products. The pilot was designed for FCA to develop and assess the impact of the value measures data. […]
The European Insurance and Occupational Pensions Authority (EIOPA), has published its second and final set of advice to the European Commission on the Solvency Capital Requirement (SCR) formula under the Solvency 2 Delegated Regulation. Highlights include: EIOPA recommends further simplifications and improvements to the calculation of capital requirements, including for fire risk and mass accidents […]
FCA has written a Dear CEO letter to firms that enter into regulated second charge mortgage contracts, asking them to review their lending processes and confirm to FCA that the firm is acting responsibly when lending and has systems, processes and controls to ensure this. FCA is worried, following a review it carried out to […]
The Treasury Committee is concerned at evidence RBS has provided to it that indicates that 75% of current RBS restructuring employees previously worked in the GRG. Nicky Morgan said that although Ross McEwen, RBS Chief Executive, had assured the Committee that the culture in the current Restructuring group is fundamentally different to that of the […]
PRA has published a report in response to the Treasury Committee’s inquiry into Solvency 2. The response is split into four parts: Part 1: Overview of the UK insurance industry and the rationale for the prudential regulation of insurers. Part 2: Solvency 2 and the UK insurance sector, including the development of Solvency 2. Part 3: […]
Sam Woods, Deputy Governor, Prudential Regulation and Chief Executive Officer of PRA delivered a speech entitled ‘Looking out for the policyholder’ at the ABI’s annual conference. The speech focused on the policyholder, competition and competitiveness and Solvency 2 reform. With regard to PRA’s secondary objective to facilitate effective competition, Mr Woods provided practical examples of steps […]
Treasury has announced an inquiry into the role of digital currencies in the UK. It will look at DLT and its potential impact on financial institutions and the infrastructure, and will look at the regulatory response to date.
The Bank of England has published a report on its supervision of financial market infrastructures (FMI). The report measures performance against its 2017 annual report, as well as looking ahead. The report: Defines FMIs and their importance; Explains BoE’s supervisory role and BoE’s interaction with national and international regulators; Reports on BoE’s supervision over the […]
The Association for Financial Markets in Europe (AFME), has published a guide on the impact of Brexit on wholesale financial services contracts. The guide takes the form of FAQs and is intended to help clients of banks in understanding how cross-border relationships will be affected by the UK’s decision to leave the EU and, by […]
FCA has published a “Dear CEO” letter setting out its comments on the quality of prudential returns. It is concerned that a significant number of firms are submitting returns that contain inaccurate or incomplete data and, as a result, feels it needs to ask CEOs of IFPRU and BIPRU firms to review their firms’ regulatory […]
An illegal money lender has been sentenced to imprisonment of 3.5 years for offences under FSMA and the CCA. In addition to bringing the successful prosecution against Dharam Gopee, FCA also successfully obtained a Serious Crime Prevention Order against him. Mr Gopee was refused a consumer credit licence by the OFT and did not get […]
ESMA has published its Risk Assessment Work Programme for 2018, in which it establishes priorities for assessing securities market risks. ESMA will complement ongoing market monitoring through its semi-annual Report on Trends, Risks and Vulnerabilities, and its Quarterly Risk Dashboards, by launching an annual series on EU derivatives markets (based on EMIR data) and an […]
ESMA has updated its Q&As on transparency and market structure issues under MiFID 2. The latest additions cover pre-trade transparency waivers.
PRA has published a policy statement on strengthening individual accountability in insurance: optimisations to the SIMR. The policy statement follows on from an ealier consultation (CP8/17) and includes: feedback on the proposed optimisations to the SIMR and PRA’s final policy; feedback on PRA’s proposals for diversity at boards of insurers and PRA’s final policy; the […]
The PRA has published a consultation paper on amending the effective date of its rules implementing the IDD, in response to proposals from the European Commission to push IDD implementation back from 23 February 2018 to 1 October 2018. Proposals to amend the effective date to align with the Commission proposal do not represent a […]
The European Parliament and European Council are considering the proposal to delay the application date of IDD until 1 October 2018. The Treasury has updated its webpage to explain that it will delay making the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018 until the proposal to delay the application date is confirmed. This […]
Following a Feedback Statement in which FCA identified key areas of concern in the high-cost credit sector, it has published an update on the work undertaken since the July 2017 publication. This presents an emerging picture for intervention in some markets, but equally a limitation on what can be achieved through traditional regulatory intervention. The […]
FCA has published a “Dear CEO” letter emphasising the work required to combat authorised push payment (APP) fraud. This follows the Which? super-complaint in September 2017, and the Payment Systems Regulator’s response in November. FCA explains combating APP fraud and financial crime in general is a priority articulated in its 2017/2018 Business Plan. FCA hopes […]
FCA has published a statement following concerns raised about the performance scenarios in the PRIIPs KID. Some firms have noted that occasionally this information may appear to optimistic and risk misleading consumers. FCA says that where a manufacturer is worried the scenarios in their KID are too optimistic, it may provide explanatory materials to put […]
FCA has opened a consultation on plans to provide more small businesses with access to FOS. The changes proposed would allow FOS complaints redress to approximately 16,000 SMEs, charities and trusts, by changing the eligibility criteria to access FOS. Under the proposals, eligible businesses would be those that satisfy the following criteria: Under 50 employees; […]
As part of its review into the implementation of Solvency 2, PRA has published a consultation paper on changes to insurance reporting requirements. The changes are designed to reduce the burden for Solvency 2 firms and mutuals while maintaining PRA’s ability to meet its statutory objectives and to supervise firms. The consultation paper is relevant to […]
AFME has published a revised post-trade due diligence questionnaire to help global custodians. The new version harmonises and simplifies the DD process and now includes 20 additional questions to the original 2016 questionnaire.
PRA is consulting on changes to its Supervisory Statement 9/13 to reflect its expectations for reporting in the minimum requirement for own funds and eligible liabilities. It seeks comments by 9 April.
Charles Randell CBE has been appointed the new chair of FCA and the PSR with effect from 1 April.
FCA has updated its consultation paper on its proposals for rules to help customers in persistent credit card debt. The revised proposals follow feedback on its April consultation. Respondents were in favour of FCA’s proposals in principle and it has now done a new analysis of the costs to business of its remedies – the […]
The Commission has recognised a number of trading venues in the US, Australia and Hong Kong as equivalent for the purposes of the MiFID 2/ MiFIR share trading obligation. This follows publication in the OJEU of the decision of equivalence in relation to certain US swaps markets.
FCA has written a Dear CEO letter, expressing its concerns on the continued practice of “payment for order flow”. Despite FCA having criticised the practice in the past, it is aware that many brokers are still doing it, and are devising strategies to get round the even stricter MiFID 2 restrictions. FCA warns firms that […]
EBA has published its final guidelines on security measures for operational and security risks of payment services required by PSD2. The guidelines require PSPs to have in place: an effective operational and security risk management framework processes to detect, prevent and monitor potential security breaches and threats risk assessment procedures regular testing processes to raise […]
The latest edition of Market Watch looks at: a reminder that an investment firm’s transaction report must reflect the transaction from its own perspective, reporting its immediate counterparty or client (whether or not subject to MiFIR). Whether to report at block or allocation level depends on what the immediate counterparty confirms as “executions” a reminder […]
EIOPA and the European Commission have developed an editable version of the IPID template. Under the IDD, the IPID is required to be provided for non-life insurance products to enable the customer to make a more informed decision. FCA has proposed for the IPID requirement to only apply to retail customers rather than commercial customers. The […]
As part of its review into Solvency 2, PRA has published a consultation paper which proposes updated expectations of firms in respect of: the model change process set out in Supervisory Statement (SS) 12/16 ‘Solvency II: Changes to internal models used by UK insurance firms’; and the internal model change policies set out in SS17/16 […]
FCA has published its final rules to require personal and business current account providers to publish information that will help comparison of services from different providers. The rules, which will create a new chapter in BCOBS, require providers to publish details of: services, helplines and their availability contact details for help, including 24 hour helplines time needed to […]
The International Association of Insurance Supervisors (IAIS) has published an interim public consultation paper on an activities-based approach to systemic risk in the insurance sector. While the consultation paper does not contain conclusive proposals, IAIS provides stakeholders with an opportunity to comment on the development of the approach. A public background call via telephone conference […]
PRA has sent a letter to firms that were involved in the 2017 general insurance stress test and explained that its main findings were: the UK general insurance sector as a whole and individual firms are resilient to those scenarios within the regulatory threshold of Solvency 2; and with regard to reinsurance interconnectedness, PRA found no evidence […]
The Lloyd’s Market Association (LMA), along with the International Underwriting Association of London, the London & International Insurance Brokers’ Association and the British Insurance Brokers’ Association, has published a London Insurance Market Core Uses Information Notice, which takes into account GDPR requirements. The Notice has been designed to assist a market participant and to help data […]
Treasury has announced it is to offer financial support for the development of an application to allow those who rent properties to record and share their rent payment data, with a view to this helping them to improve their credit scores. It is inviting bids to its “Rent Recognition Challenge”, which will open to applications […]
The decision to consider the legal and supervisory framework of the USA applicable to designated contract markets and swap execution facilities as equivalent to MiFIR standards under MiFIR has been published in the OJEU. The Annex to the decision names over 20 markets which are equivalent to EU trading venues.
BEIS has published guidance on the Consumer Rights (Payment Surcharges) Regulations 2012. New rules come into force on 13 January 2018 as a result of PSD2 that ban surcharges on a wide range of transactions, while limiting them in others. PSD2 bans merchants from charging a fee on the basis of a consumer’s choice of payment […]
Megan Butler has spoken on assessing the value of financial advice. She spoke of the growing importance of financial advice as increasing numbers of people need help making “sense” of their choices. Recent FCA studies have shown that, in 2015, 93.1% of advice on investments, pension accumulation and retirement outcomes was suitable. This figure was […]
The Chairman of the European Insurance and Occupational Pensions Authority (EIOPA), Gabriel Bernardino, delivered a speech at EIOPA’s 7th annual conference on Insurance and Pensions Reloaded: A Game Changer. The speech covered the following four themes that cross over EIOPA’s main strategic priorities: Maintaining sound regulation in an evolving landscape – this included a discussion on […]
The International Association of Insurance Supervisors has extended the deadline for submitting comments on various insurance core principles (ICPs) and the ComFrame material integrated with ICPs to: 15 January 2018 in respect of Revised ICP 8 (Risk Management and Internal Controls) and additional ComFrame material integrated with ICP 8; and 31 January 2018 in relation to revised ICPs […]
The Financial Stability Board (FSB), in consultation with the International Association of Insurance Supervisors and national authorities has published a statement which explains it has decided not to publish a new list of global systemically important insurers (G-SIIs) for 2017. The FSB comments that the work of IAS in the insurance sector to develop an activities-based approach may […]
The European Commission has finally adopted the RTS under PSD2 on strong customer authentication (SCA) and common and secure open standards of communication. The key purpose of the RTS is to create stringent security procedures to reduce payment fraud levels and protect confidential data. The key requirement is for at least two independent elements in […]
The Law Commission has published its final report on the Goods Mortgages Bill. This marks the end of a project that started in 2014, aimed at addressing the problems the outdated Bills of Sale Acts cause for borrowers, purchasers and lenders engaging in logbook loans. The particular problems the new Bill seeks to address are: […]
We’ve written a briefing on recent regulatory warnings about ICOs, and how they may fall within the UK’s regulatory perimeter.
At the Westminster Business Forum on retail banking and payments, Karina McTeague, Director of Retail Banking Supervision, delivered a speech on the regulatory priorities in the retail banking sector. She explained FCA’s priorities as articulated in its business plan, and said all have application to retail banking. FCA is looking closely at how retail banks […]
FCA has fined Paul Walter, a bond trader formerly with Bank of America Merrill Lynch International, £60,090 for market abuse. It found Mr Walter created a false and misleading impression about the supply and demand in the market for Dutch State Loans, and did so 12 times in summer 2014. Mr Walter had entered a […]
ABI publishes guide to help firms identify and support vulnerable customers in the long term savings market
ABI has published a guide to help firms operating in the long term savings market better understand, identify and support customers who may be vulnerable, to ensure all customers are supported through the whole customer journey. The guide sets out principles, good practice and case studies. ABI recommends that firms: implement a vulnerability policy or […]
The Organisation for Economic Co-operation and Development (OECD) has published revised guidelines on insurer governance. The guidelines are non-binding and serve as a reference point for insurers, governmental authorities, and other relevant stakeholders in OECD and non-OECD countries. Key updates relate to matters including: related party transactions at the group level; disclosure of policies relating to […]
The European Union Agency for Network and Information Security (ENISA) has published a report on the commonality of risk assessment language in cyber insurance. ENISA comments on the growth of the cyber insurance market and its anticipated further expansion as a result of the General Data Protection Regulation and the Directive on Network and Information […]
Following ESMA’s recent warnings to consumers and firms on the dangers of participation in initial coin offerings (ICOs), FCA has continued the regulatory focus on cryptocurrencies by issuing a consumer warning about contracts for differences (CFDs) with cryptocurrencies. CFDs are financial instruments that allow investors to speculate on the price of an asset, and CFDs are […]