The FCA has fined UBS AG for transaction reporting failures during the period November 2007 to May 2017. The FCA reported that a total of 135.8 million errors in reporting were made during this period. It queried whether UBS had taken reasonable care to organise and control its affairs responsibly and effectively in this respect. […]
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 December 2018 as it found them to be misleading, not fair and unclear. But the Treasury Committee feels there is […]
The BIS Committee on Payments and Market Infrastructures and the Markets Committee have published a joint report central bank digital currencies (CBDC). The report sets out the findings of research conducted by the committees into the potential implications of CBDC on payment systems, monetary policy implementation and transmission, and the structure and stability of the […]
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-consuming for investors to shop around. The changes aim both to reduce the time and complexity of switching, and […]
The FCA has updated its webpage on digital regulatory reporting (DRR) by publishing – a video which explains the concept of DRR and outlines the work carried out by the DRR pilot group; a report which sets out an overview of the work and findings of phase I of its DRR pilot, which explored how firms and […]
The Basel Committee on Banking Supervision has published a statement on crypto-assets. The Committee acknowledges that while the crypto-asset market remains small relative to that of the global financial system, and banks currently have very limited direct exposures, the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential […]
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, in each case suggesting questions firms should ask themselves to ensure they complete the forms correctly and gives examples of good […]
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 actions on or after that date. For claims about actions before 1 April that are referred to FOS […]
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 undertake business with clients. FCA has made rules that will require all firms to report timely and accurate information about their Directory persons. FCA […]
The FCA has published a survey and qualitative research they commissioned to examine UK consumer attitudes to cryptoassets. Although the research revealed a prevailing lack of understanding about cryptoassets, it also indicated a very low level of take-up: only an estimated 3% of consumers have ever bought cryptoassets, and about have of those spent under […]
The EU has agreed the terms of a draft directive that, if passed, will amend a number of consumer protection directives, including the consumer rights directive (2011/83/EU), to introduce measures such as: harmonised penalties for breaches of consumer protections, including the power to impose a fine, in certain circumstances, of up to 4% of a […]
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 alongside the final Market Study report; feedback on policy proposals on fees and levies, also due in March, with consultation on rates proposals in April; […]
BoE and FCA have updated their respective websites with coordinated information on their approach to a hard Brexit. BoE has published a series of materials setting out its updated plans to its supervisory approach to a hard Brexit. The papers cover: transitional relief for firms that will broadly (with exceptions) last for 15 months from exit […]
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 risk indicators and performance scenarios, hard to deal with, and that some KIDs display transaction costs that are unlikely to be a […]
The International Association of Insurance Supervisors has published an Application Paper on Proactive Supervision of Corporate Governance. The paper sets out principles and practices to support supervisors in their supervision of insurance firms, particularly where examining the corporate governance of financially sound firms. It also includes an indicative list of early warning red and yellow […]
The FCA has published sector-specific information to help regulated firms ensure they are prepared for the consequences of Brexit, including a no-deal Brexit. The guidance covers banking and payments, life insurance, pensions and retirement income, general insurance, retail investment and wholesale banks, markets and asset managers.
The Council and the European Parliament have agreed the terms of a regulation and directive setting out prudential and supervisory measures that will apply to investment firms. The new requirements will apply to the smaller investment firms that do not already come within the scope of the Capital Requirements Directive Regime (CRD IV). or who […]
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 their clients and are not unduly influenced by third parties. Additionally, both MiFID 2 and FCA have a […]
US and UK authorities agree measures to secure derivatives trading and clearing activities post-Brexit
The Bank of England, FCA and the US Commodity Futures Trading Commission (CFTC) have confirmed that they will ensure that firms will be able to continue engage in derivatives trading and clearing activities through the CCPs they regulate following the UK leaving the EU. The announcement confirms their commitment to supporting financial stability and to […]
The EBA has published a revision to the Committee of European Banking Supervisors’ 2006 Guidelines on outsourcing arrangements. The revised guidelines take into account and are consistent with CRD IV, MiFID II, EMD, PSD II and BRRD. The guidelines will include provisions relating to outsourcing to cloud service providers that the EBA previously published as […]
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.
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 managers could usefully provide better detailed explanations. It gives examples of where customers frequently misunderstand, and suggests practical steps to help […]
Under the Solvency II Directive, the Commission is required to review certain areas covered by the Directive by 2020. Accordingly, the Commission has sent EIOPA a formal request for technical advice on the review of the Directive. EIOPA is asked to review a number of areas, including: the function of the matching adjustment and volatility […]
ESMA has announced that, in the event of a no-deal Brexit, LCH Limited, ICE Clear Europe Limited and LME Clear Limited will be recognised as equivalent. The confirmation of equivalence for the purposes of EMIR follows an assessment will ensure the continued clearing of derivatives trades through these clearing houses.
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 asset managers can produce a generic PRIIPs KID for the overall product, backed up with the specific KIIDs. But they are allowed […]
In its capacity as supervisor of financial market infrastructure (FMI) firms, the Bank of England has published its Annual Report, providing an overview this sector in 2018 and future developments and priorities for 2019. Accompanying the Report, the Bank has also produced a short video describing what FMI firms are, and why they are important […]
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 Firms; amending the approach to periodic fees for life insurers; updating the Part VII regulatory transaction fees for insurers; updating the […]
The Financial Stability Board has published its work programme for the forthcoming year. The areas upon which it intends to focus are: addressing emerging vulnerabilities in the financial system; working with standard-setting bodies to finalise and opererationalise post-crisis reforms; monitor the completion of reforms implementation; and evaluate the effect of the post-crisis reforms.
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 legislation, and understand how the EU firm can manage the branch. While not overtly aimed at UK firms, the briefing links […]
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 the smallest financial counterparties from the clearing obligation, and will create streamlined reporting requirements. It also maintains the current extension period […]
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 as third-country CCPs in a timely manner now the Commission has made equivalence decisions on […]
ESMA has published information on how derivatives data that must be reported under EMIR should be handled in the event of a ‘no deal’ Brexit. ESMA’s statement sets out expectations in relation to: reporting by CCPs and counterparties; reconciliation and recordkeeping by trade repositories; portability and aggregation by trade repositories; and timeline for completion of […]
Under draft legislation published by the Treasury, the FCA and the PRA are to be given temporary powers to make transitional provisions, in order to ensure that most firms and other regulated entities’ day to day UK regulatory obligations will be as unaffected by Brexit as possible. However, the FCA has published a statement setting […]
As part of the preparation for a ‘no-deal’ Brexit, the FCA has agreed MoUs with ESMA and with EU and NCAs, covering supervision, enforcement and information exchange, including in relation to credit rating agencies and trade repositories.
As part of the Brexit preparations, the BoE and ESMA have published an MoU setting out cooperation and information-sharing arrangements in relation to CCPs and CSDs. This agreement, and the adoption by the EC of temporary equivalence decisions for UK CCPs and CSDs, will facilitate continued recognition of UK CCPs and CSDs and their continued […]
ESMA has published its Regulatory Work Programme for 2019, setting out ESMA’s Single Rulebook work. The matters it is working on for the forthcoming year include: Post-trading RTS under EMIR; RTS relating to registration requirements under the European Social Entrepreneurship Funds Regulation and the European Venture Capital Funds Regulation; and A report to the Commission on […]
As part of its follow up work to its asset management market study, the FCA has published new rules and guidance to help asset managers and customers understand more about how funds are being managed. The new provisions include: guidance on how fund managers should describe fund objectives and investment policies; requirements for how benchmarks, where […]
The European Commission has adopted delegated regulations under the EuSEF Regulation (346/2013) and the EuVECA Regulation (345/2013). These Regulations respectively introduced measures to allow venture capital funds to market their funds across the EU using a single set of rules. They also made provision for delegated regulations to be developed to specify requirements such as […]
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 now to make Brexit-related changes to their business. Wherever possible, these transitional arrangements would apply. But in […]
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 unlevied contingency reserve of £5m. The consultation includes a breakdown of costs between fee blocks. Responses […]
The FCA is working with the the FRC to set out proposals and a discussion paper encouraging asset managers and others managing investments to take a closer interest in the operation of the businesses in which they invest. The FCA consultation is on measures implementing the second Shareholders Rights Directive which mainly affects FCA regulated […]
On 25 January 2019 EIOPA published findings of its peer review, which examined how national competent authorities (NCAs) assess the propriety of administrative, management or supervisory body (AMSB) members and qualifying shareholders. The review was initiated following a number of cross-border cases indicating a lack of harmonisation with regards to the propriety assessment across the […]
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 EU of any proposals that would be super-equivalent to MiFID 2 in April; and the statutory deadline for implementing the remedial action in June.
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 make rules that apply to authorised persons in relation to communications they make or approve if rules are necessary to […]
The Treasury has written to the Treasury Committee enclosing a draft of secondary legislation that would give temporary transitional powers to the UK financial regulators in the event of a no-deal Brexit that would enable firms and the financial markets to function properly while requirements stemming from EU laws are embedded into UK laws. The […]
ISDA has published an updated webpage with FAQs on the impact of Brexit on ISDA documentation.
As the FCA prepares for the extension of SMCR to most solo-regulated firms next December, it is consulting on a few areas regarding the existing regime for banks and large insurers previously identified as wanting attention. The proposals set out in CP19/4 include: excluding the legal function from the scope of SMCR; amend the scope of […]
The FCA is consulting on draft guidance on activities that the FCA regulates in this area. Noting that this is an area in which investor activity is on the increase, and where there is still uncertainty about where the regulatory perimeter falls, the guidance will provider greater clarity, and also assist consumers in knowing what […]
A set of oral evidence given to the Treasury Committee includes statements from FCA that: it is now content on how to interpret the mortgage affordability test compliantly with the MCD and now plans to consult on changing it from an absolute test to a relative test; it will be carrying out perimeter work on SME lending […]
We are delighted that Jonny Williams has joined the financial services regulatory team at Womble Bond Dickinson UK. More information on Jonny and his appointment can be found here.
The FCA has launched a new portal to enable mutual societies complete tasks and submit information to the FCA that was previously done online or by post, such as the submission of annual rules and accounts and applications for rule amendments. Mutuals societies can start to register as users of this portal; the FCA will […]
FCA has published its “Sector Views” setting out its observations from monitoring its 7 selected sectors of: retail banking retail lending general insurance and protection pensions and retirement income retail investments investment management and wholesale financial markets It produces this review to inform its overall approach and ultimately its business plan. The studies identify where […]
The FCA has published a ‘Dear CEO’ letter in which it provides clarity about the communication and approval of financial promotions by regulated and unregulated businesses. The FCA has published the letter after it has recently become aware that firms have been issuing financial promotions which suggest or imply that all the activities they undertake are […]
The EU Council has confirmed its position on the compromise proposals on a package of changes to the CRR/CRD4 , comprising a Regulation and a Directive, to allow prudential and supervisory requirements to be proportionate to the risk and business profile of regulated firms while ensuring financial stability. The new measures would divide investment firms into: […]
At the end of last year, the the Treasury published draft regulations making provision for contractual certainty for firms currently passporting into the UK in the event of a ‘hard’ Brexit. Following this, the FCA has published CP19/02 on Brexit and contractual continuity. This consultation paper is aimed at such incoming firms. It consults on […]
FCA has opened the notification window for passporting-in firms. Firms will need to have notified FCA of their intention to seek full UK authorisation to carry on services in the UK before exit day in the event of a hard Brexit. FCA has opened the window from 7 January to 28 March, Its website includes a guide […]
FCA’s latest Policy Development Update highlights a number of publications due before the end of Q1 2019: a policy statement on general standards and communication rules for payment services and emoney providers; consultation and discussion on the investment platforms market study remedies; policy statement on 2019/20 fees and levies; consultation on recovering the costs of […]
ESMA has updated its FAQs on MiFID 2 and MiFIR in respect of: transparency; and commodity derivatives. The updated questions cover, among other things, publication of request for market data transactions and the application of the “price multiplier” field in electricity contract reporting.
The Commission Implementing Regulation on the equivalence of the Swiss regulatory framework for stock exchanges for the purposes of MiFID 2 has been published in the OJEU and applies from 1 January 2019. The SIX Swiss Exchange AG and BX Swiss AG are considered equivalent to regulated markets.
In December 2018, the FCA confirmed that as part of its take over of the regulation of CMCs from April 2019, it would require CMCs to register for temporary permission in order to continue to operate from April, and pending submission and approval by the FCA of a ‘full’ application to continue to do business. […]
ESMA is to renew the current restrictions on the marketing, distribution or sale of CFDs to retail clients for a further three months from February 2019.
BoE has made a statement on the equivalence of the future UK legal and supervisory framework for CCPs and CSDs, following a decision by the European Commission to make implementing acts that will allow UK CCPs and CSDs to be recognised by ESMA. The measures would take effect from 30 March 2019 in the event of a […]
As part of its preparation for onshoring EU legislation, the PRA has published CP32/18. This consultation paper contains two consultations: the first sets out the PRA’s proposals regarding the PRA Rulebook and the Binding Technical Standards (BTS) that are to come within the PRA’s remit; the second relates to BTS that will come within the […]
Following a consultation earlier this year, the FCA has published a policy statement setting out the new rules and fees that will apply to claims management companies (CMCs) from April 2019. From 1 April 2019, the FCA will become the regulator of CMCs that are established or serve clients in England, Wales and Scotland. FOS will […]
Treasury has published a draft statutory instrument setting out the Financial Services Contracts Regime (FSCR) which will provide run-off mechanisms to the various temporary regimes the government and regulators are preparing to put in place for Brexit. The regime will cover firms that currently passport into the UK under FSMA, the PSRs or the EMRs, and […]
The latest edition of Market Watch outlines FCA’s views on industry implementation of MAR. FCA stresses the importance of industry participants properly calibrating their risk assessments to the markets and asset classes they operate in and showing it is responsive to changes. It notes the importance of strong judgment in market abuse compliance and emphasises […]
The FCA has now published final rules confirming the expansion of the jurisdiction of the FOS to include certain SME customers. The new rules will mean that from 1 April 2019, the FOS will be able to hear complaints from SMEs who meet two of the three following criteria – fewer than 50 employees; annual […]
The FOS has published a consultation on its plans and budget for 2019/2020. It notes that from April 2019, its jurisdiction will be expanded by the addition of two significant areas of work: complaints made by SME customers of financial services, and complaints made by customers of claims management services. The consultation questions include inviting […]
The Financial Reporting Council has published the final version of new Corporate Governance Principles for large private companies. We have published an article that summarises and discusses these Principles.
FCA’s latest quarterly consultation proposes rules that: amend SUP 16 to address FCA’s concern that it does not always hold accurate “firm details” by requiring an annual accuracy check and removing the option some firms currently benefit from to update details other than using Connect; and add the Association of Accounting Technicians to the list of bodies […]
FCA is consulting on permanent rules to restrict the marketing, distribution and sale of CFDs and CFD-like options to retail consumers. The proposals are similar to the ESMA temporary measures, but FCA wants also to cover closely substitutable products and are proposing some different leverage limits. FCA feels the action is necessary because of constant […]
ESMA has published the advice it received from the Securities and Markets Stakeholder Group on amending the PRIIPs KID. The group fully supports the principle of the KID but is disappointed that there are proposals for change so soon after firms spend significant resource to implement the original requirements and also that the consultation period […]
The European Parliament and the Council of the European Union have reached a provisional political agreement on the banking package of reforms that will result in CRD V/ CRR II. Proposed measures include more risk-sensitive capital requirements, in particular in the areas of market risk, counterparty credit risk and for exposure to central counterparties, and […]
The Competition and Markets Authority (CMA) is consulting on its proposed Annual Plan, which sets out its plans and priorities for 2019 to 2020. Subject to the outcome of the Brexit negotiations, the CMA plans to give greater priority to potential market studies and investigations as it considers future work. The themes which it proposes should carry […]
ESMA has added to its EMIR Regulation Q&A document. The updated question relates to Article 41 of EMIR, on margin requirements.
EIOPA has published draft technical advice to the Commission on the integration of sustainability risks and factors in delegated acts under Solvency II and IDD. The proposed amendments include the addition (in the Solvency II Delegated Act) of a responsibility for identifying and assessing emerging sustainability risks to the risk management function, and including any […]
As part of the preparation for a ‘hard’ Brexit, the Treasury has published a Policy Note that accompanies a draft Bill covering in-flight financial services legislation, currently progressing through Parliament. The Policy Note comments that in scope of the Bill are pieces of EU legislation agreed or in negotiation at the point of exit, with implementation […]
The Working Group on Sterling Risk-Free Reference Rates (Working Group) has published a communication pack entitled ‘Preparing for 2022: what you need to know about LIBOR transition’. The pack is designed to inform readers about the transition from LIBOR to SONIA and covers the following areas: the problem with LIBOR; why SONIA is the preferred […]
The Plenary of the Financial Stability Board (FSB) has announced the appointment of Randal K. Quarles (Governor and Vice Chairman for Supervision at the US Federal Reserve) as its new Chair and Klaas Knot (President of De Nederlandsche Bank) as Vice Chair, for a three-year term starting on 2 December 2018. Randal K. Quarles will replace […]
ESMA has released a Public Statement on how central clearing is to be addressed in the event of a no-deal Brexit. ESMA supports continued ability to access UK CCPs and has therefore welcomed the decision to adopt a temporary and conditional equivalence decision. It is now working to plan for recognition of UK CCPs in […]
FCA has published additional proposals on how it will deal with a hard Brexit. The consultation focuses on: more changes to the Temporary Permissions regime; reflecting the new Credit Rating Agency and Trade Repository Regime in the Handbook and FCA’s approach to guidance and forms Key elements of the consultation include: new “cross-cutting” issues that […]
EIOPA Chairman, Gabriel Bernardino, opened their 8th Annual Conference today in Frankfurt with his speech on insurance and pensions: securing the future, which is also the theme of this year’s conference. His speech also looked back at EIOPA’s achievements in the last year and discussed their priorities for 2019. The one day conference will look at […]
The FCA has published a speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA, delivered at the Regulation of Cryptocurrencies event on 20 November 2018. The speech highlights the key issues identified by the Cryptoassets Taskforce (consisting of the FCA, HM Treasury and the Bank of England) in its report published at the […]
At its latest Board meeting, FCA has made changes to DISP and its guidance, effective from 8 November, to confirm that firms must not reject relevant regular premium PPI complaints without considering whether recurring non-disclosure is an issue. Separately, FCA has amended Chapter 13 of IPRU(INV) to require personal investment firms to have PII cover […]
ESMA has updated its Q&As on MiFID II and MiFIR, and on the Short-Selling Regulation. The topics addressed by the MiFID II and MiFIR Q&As include making market structures and transparency issues. The Short-Selling Q&A updates a regulatory reference.
As part of the implementation of the Securities Regulation, which begins to apply from 1 January 2019, ESMA has published: draft regulatory and implementing standards on the contents of applications to register with ESMA as a securitisation repository; Final Technical Advice on fees to be charged for registering and supervising securitisation repositories; further guidance to […]
The ECB has published non-binding guidance for banks on its expectations regarding internal capital liquidity adequacy assessment processes. The guides will be applied from 1 January 2019. These guides updated previous guidance from January 2016, and indicate an intensification of the ECB’s supervisory assessments and an increase in the role of ICAAP and ILAAP in […]
ESMA has updated its supervisory briefing for regulators on the suitability requirements under MiFID 2. The briefing covers: when a suitability assessment is needed; information to clients on the assessment; getting information from clients; arrangements necessary to understand products; arrangements necessary to understand the suitability of an investment; suitability report; staff qualifications; and record keeping.
The ESAs are consulting on proposed amendments to the PRIIPs KID. The consultation follows the ESAs’ letter to the Commission on developing guidance on information on investment funds. It also noted the need to make targeted amendments to the PRIIPs delegated Regulation to apply the PRIIPs KID requirements appropriately to UCITS and relevant non-UCITS funds, […]
ESMA has published a report with draft RTS that would amend the 3 Commission Delegated Regulations on EMIR. ESMA is proposing a limited exemption that would facilitate novation of certain non-centrally cleared OTC derivatives to EU counterparties for a specific time-window in the event of a no-deal Brexit. The proposals would allow novation without triggering the […]
The Bank of England and Pay.UK are inviting expressions of interest from senior stakeholders who could represent the payments industry on a newly created Standards Advisory Panel. The new Panel will focus on the implementation of ISO20022, but also cover also payments standards for the UK. The deadline for applications is Monday 10 December 2018.
CMA has published a consultation paper as part of its review of the investment consultancy and fiduciary management services study. The paper contains draft definitions. The proposals define: “investment consultancy service” and “fiduciary management service” The paper also notes that other terms, such as “pension scheme trustees” and “interconnected body corporate” will need separate definition. […]
As part of its preparation for the contingency of a ‘hard’ Brexit, HM Treasury has published draft onshoring legislation relating to: Payment accounts Financial markets infrastructure insolvency Central securities depositories and Investment funds and managers The changes made under these SIs are unlikely to take effect if an implementation period is agreed.
FCA has written a “Dear CEO” letter on the duties of SIPP operators in respect of due diligence. The letter refers to the judgement in the Berkeley Burke case and several other pending civil claims, and asks firms to consider the potential implications of these cases for them and their customers. The Berkeley Burke case, […]
The Cryptoassets task force, led by Treasury, has published its report on the UK’s policy and regulatory approach to cryptoassets. The report looks at the policy and regulatory implications of DLT and cryptoassets and comments on the considerable risks as well as the potential benefits. Now the Task force will consult on a number of initiatives, specifically: […]