The following posts provide a snapshot of selected UK, EU and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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FCA Reviews Treatment of Politically Exposed Persons
09/14/2023
The U.K. Financial Conduct Authority has launched a review of the treatment by regulated financial services firms of Politically Exposed Persons based in the U.K. Firms are currently obliged, under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, to conduct enhanced due diligence when dealing with PEPs. The FCA has existing Guidance on the treatment of PEPs for these purposes, which makes clear (amongst other things) that firms should adopt a proportionate and risk-based approach to the application of the MLRs. The FCA has been mandated to review this guidance under the Financial Services and Markets Act 2023, including an investigation into how firms are applying the guidance and consideration as to whether any amendments are needed. We discuss this mandate and the FSMA 2023 more generally in our client note, A Boost for UK Financial Services: The UK Financial Services and Markets Act 2023.
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UK Regulators Publish Revised Complaints Scheme
08/04/2023
The U.K. Financial Conduct Authority, Prudential Regulation Authority and Bank of England have jointly published their revised Complaints Scheme, which governs how complaints against the U.K. regulators should be made and handled. The changes include:- The introduction of specific discretionary compensation bands for non-financial loss arising from the regulators' actions or inactions. The bands range from £100 for a relatively low level of stress or inconvenience, up to over £2,500 in exceptional circumstances, for example, where the consequences of the regulators' failings are particularly severe.
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UK Launches 2023 Review of Senior Manager's and Certification Regime
04/06/2023
Following the Edinburgh Reforms announcement in December 2022, the review of the Senior Managers and Certification regime has been kicked off with HM Treasury publishing a call for evidence and the U.K. Financial Conduct Authority and Prudential Regulation Authority publishing a joint discussion paper. Both reviews should be considered alongside each other and responses to both may be submitted until June 1, 2023. The U.K.'s Senior Managers Regime has been criticized in imposing a close-to-strict level of liability on individuals, including for any problems which arise in their designated area of responsibility, potentially making the U.K. a less attractive place for senior financial services professionals to operate.
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UK Conduct Regulator Publishes Policy Statement on Improvements to Appointed Representatives Regime
08/03/2022
The U.K. Financial Conduct Authority has published a Policy Statement and final rules on improvements to the Appointed Representatives regime. The AR regime allows authorized firms to appoint representatives to conduct certain regulated activities on their behalf. The FCA consulted on proposed changes to the regime in December 2021. The changes will take effect from December 8, 2022, although there is a transitional period for some of the rules (e.g., those relating to on-going submission of information and annual self-assessments), giving firms longer to comply. Principal firms will be required to provide data on their existing ARs within 60 days of the rules coming into force – the FCA will be sending out section 165 requests for information towards the end of 2022.
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UK Financial Conduct Authority Publishes Final Rules and Guidance for New Consumer Duty
07/27/2022
The U.K. Financial Conduct Authority has published its final rules and guidance for the new Consumer Duty, which is intended to establish clearer standards for consumer protection across the financial services industry. The FCA conducted two consultations, one in May 2021 and another in December 2021 (following its earlier Discussion paper and Feedback Statement in 2018/2019). The final rules and guidance take account of the feedback received to those consultations.
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UK Complaints Commissioner Upholds Complaints Against UK Financial Conduct Authority's Compensation and Complaints Scheme
02/15/2022
The U.K. Financial Regulators' Complaints Commissioner has published its final report upholding complaints from over 400 complainants concerning: (i) the U.K. Financial Conduct Authority's failures of regulation concerning London Capital & Finance; and (ii) the FCA's subsequent refusal to compensate bondholders for its role in their losses.
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UK Conduct Regulator Consults on Improvements to Appointed Representatives Regime
12/03/2021
The U.K. Financial Conduct Authority has published a consultation paper on proposed improvements to the Appointed Representatives regime. The AR regime allows authorized firms to appoint third parties to conduct certain regulated activities on their behalf. The FCA has identified shortcomings in principals' use of the regime, including a lack of proper oversight over ARs and poor controls over the regulated activities for which ARs had accepted responsibility. The collapse of Greensill Capital (UK) Limited in 2021 highlighted some of these issues, as one of Greensill's subsidiaries had acted as an appointed representative for another firm and its business had arguably grown to be far more substantial than was intended under the AR regime.
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Bank of England Drops Warning Against Profit Distributions for Financial Market Infrastructures
11/11/2021
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HM Treasury Consults on Extension of Senior Managers’ Regime to Financial Market Infrastructures
07/20/2021
HM Treasury has published a consultation paper seeking feedback on its proposals for the extension of the Senior Managers’ and Certification Regime to certain U.K. financial market infrastructures. The SMCR was originally implemented for U.K. banks in 2016, extended to all U.K. authorized firms in December 2019, and further extended to U.K. benchmark administrators in December 2020. The government is seeking views on whether and, if so, how the SMCR should be extended to FMIs as well as the proportionate application of it to FMIs. Responses to the consultation on the SMR for FMIs should be submitted by October 22, 2021.
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UK Conduct Regulator Publishes Approach to International Firms
02/03/2021
The U.K. Financial Conduct Authority has published its final Approach to international firms, setting out its approach to authorization and supervision of international firms providing or seeking to provide financial services that require authorization in the U.K. The FCA has also published a feedback statement summarizing its response to the submissions received in response to its consultation last year. The Approach Document sets out the conditions against which a firm will be assessed and discusses the circumstances in which firms may present higher risks and how the risks could be mitigated. It generally proposes that U.K.-authorized firms should have a U.K. place of business, so would not result in any new regime for EU firms which are currently using the "temporary permissions regime".
The FCA's Approach Document is not relevant to firms that are operating in the U.K., but do not need authorization to do so, for example, those firms using the Overseas Persons Exclusion. It is not also not relevant for payment services firms, e-money institutions, depositaries, trustees and managers of U.K. authorized funds, international alternative investment fund managers and international benchmark administrators.
Firms that are or would be subject to dual regulation, should also consider the approach of the Prudential Regulation Authority to the supervision and authorization of firms.
View the FCA's Approach to International Firms.
View the FCA's feedback statement.
View details of the PRA's consultation on its approach to supervising international banks. -
UK Conduct Regulator Extends Certification and Conduct Rules Implementation Deadlines
10/28/2020
Following its consultation earlier this year, the U.K. Financial Conduct Authority has published its final policy statement and rules to extend certain implementation deadlines for the Certification Regime and Conduct Rules. To assist firms impacted by the COVID-19 pandemic, the U.K. has made legislation—The Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) (Amendment) Regulations 2020— extending the deadline for completion of firms' first assessments of the fitness and propriety of their Certified Persons from December 9, 2020, to March 31, 2021. This applies only to solo-regulated firms (other than benchmark administrators).
In addition to extending that date, the FCA has also extended the following deadlines from December 9, 2020, to March 31, 2021:- the date the Conduct Rules come into force for staff that are not Senior Managers, Certification Staff or board directors;
- the date by which relevant employees must receive training on the Conduct Rules; and
- the deadline for submission of information about Directory Persons to the FS Register.
The FCA has reiterated that firms that are able to certify staff and submit information for the FS Register before March 31, 2021, should do so.
View the FCA's policy statement and amended rules. -
Certification Deadline Extended for UK-Solo-Regulated Firms
09/01/2020
A U.K. statutory instrument—The Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) (Amendment) Regulations 2020—has been published. This extends from December 9, 2020, to March 31, 2021, for solo-regulated firms (other than benchmark administrators) the deadline for completion of firms' first assessments of the fitness and propriety of their Certified Persons. HM Treasury agreed to the extension to assist firms impacted by the coronavirus pandemic.
The Financial Conduct Authority recently consulted on extending certain other implementation deadlines for the Certification Regime and Conduct Rules and intends to publish its Policy Statement in October 2020.
View The Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) (Amendment) Regulations 2020.
View details of the FCA's consultation. -
UK Conduct Regulator Consults on Extending Certification and Conduct Rules Implementation Deadlines
07/17/2020
Following the announcement of the extension for solo-regulated firms of the deadline for completion of firms' first assessments of the fitness and propriety of their Certified Persons from December 9, 2020, to March 31, 2021, the U.K. Financial Conduct Authority has opened a consultation on extending certain other implementation deadlines for the Certification Regime and Conduct Rules. The extension of the deadline for firms' first fitness and propriety assessments was agreed to by HM Treasury in light of the continuing impact of the coronavirus pandemic.
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UK Conduct Regulator Announces Expectations for Approved Persons Regime for Benchmark Administrators During COVID-19
06/30/2020
The U.K. Financial Conduct Authority has announced its expectations for benchmark administrators and firms using Appointed Representatives that are subject to the Approved Persons Regime during COVID-19. The APR has been superseded by the Senior Managers and Certification Regime for most solo- and dual-regulated firms. However, as benchmark administrators were a new category of authorized firm, they were granted a one-year extension from the roll-out of the SM&CR and so remain subject to the APR until December 7, 2020, when the SM&CR for benchmark administrators that do not undertake other regulated activities will be implemented.
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Extension of Fitness and Propriety Assessments for UK FCA-Regulated Firms
06/30/2020
The U.K. Financial Conduct Authority has announced the extension for solo-regulated firms of the deadline for completion of firms’ first assessments of the fitness and propriety of their Certified Persons. In light of the impact of the coronavirus pandemic on financial institutions, HM Treasury agreed to extend the deadline from December 9, 2020, to March 31, 2021, although the legislation to formalize the extension is yet to be finalized. The FCA states that firms that are able to carry out their assessments before the March 2021 deadline, should do so.
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UK Conduct Regulator Publishes Guidance on Branch Access During COVID-19
06/04/2020
The U.K. Financial Conduct Authority has published guidance for banks on continuing to make branch access available for essential services. In considering reopening and operating branches, banks should balance the needs of their customers against the safety and welfare of their staff. Maintaining access to essential services for vulnerable customers, such as access to cash, telephone banking and in-person payments, should be a particular priority. Firms should also prioritize the reinstatement of access to cash and essential services in local areas which have lost access to bank branches as a result of the pandemic, and, where this is not possible, should ensure they communicate clearly with customers through websites and physical signs at branches to point them to alternatives, including Post Office services.
View the FCA's guidance on branch access during COVID-19.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center. -
UK Conduct Regulator Update on COVID-19 Response and 2020 Expectations
06/04/2020
The U.K. Financial Conduct Authority’s Executive Director of Supervision for Investment, Wholesale and Specialists, Megan Butler, has given a speech setting out the FCA’s current priorities, its expectations of firms during the COVID-19 pandemic and the outcomes it is focusing on for the wealth management sector, as well as the future priorities for financial regulation.
The FCA initially prioritized immediate relief for firms and consumers, including on mortgages and unsecured lending products, at the outset of the COVID-19 crisis, but is now looking at how it will respond to the challenges of COVID-19 on a more long-term basis. This longer-term approach includes ensuring a good level of operational resilience (in line with the FCA’s ongoing consultation on that topic), that markets can continue to function well, that customers are treated fairly and protected from scams and that the FCA understands firms’ financial resilience so that they can fail in an orderly manner.
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Bank of England Warns Financial Market Infrastructures Against Profit Distributions
06/04/2020
The Bank of England has written to CEOs of U.K. financial market infrastructure providers, urging them to carefully consider the additional risks and potential financial and operational demands of COVID-19 when determining shareholder distributions or variable remuneration. U.K. FMI providers are expected to discuss any intended shareholder distributions with the Bank of England.
View the BoE's Dear CEO letter to FMIs.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center. -
Extension of Senior Managers Regime to Benchmark Administrators
06/02/2020
The U.K. Financial Conduct Authority has published a Policy Statement and final rules and guidance on the application of the Senior Managers Regime to Benchmark Administrators. The final rules will apply from December 7, 2020 to Benchmark Administrators authorized in the U.K. that do not undertake any other regulatory activities. The FCA’s SMR was originally implemented for banks in 2016 and was extended to all FCA solo-regulated firms authorized under the Financial Services and Markets Act 2000 in December 2019. Benchmark administrators were only obliged to become FCA-authorized by the end of 2019 pursuant to the EU Benchmark Regulation, and so were granted a one-year extension from the roll-out of the SMR.
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FCA Publishes Final Guidance on COVID-19 Measures for Mortgage Providers
06/02/2020
The U.K. Financial Conduct Authority has published final guidance on how mortgage lenders should treat customers coming to the end of a payment holiday, or those yet to request one, in light of the COVID-19 pandemic. The guidance will come into force on June 4, 2020 and remain in force until October 31, 2020, unless renewed or updated. The guidance covers: (i) fair treatment of customers seeking, or coming to the end of, a payment deferral; (ii) options for customers able, or unable, to resume full payments; (iii) the interaction of the guidance with the FCA’s Mortgage Conduct of Business Sourcebook; (iv) training, monitoring, record keeping and Credit Reference Agency reporting; (v) repossessions; and (vi) debt help and money guidance.
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UK Conduct Regulator Announcement on Continuing Professional Development for Regulated Firms
05/27/2020
The U.K. Financial Conduct Authority will temporarily allow regulated firms subject to continuing professional development requirements to carry over any uncompleted CPD hours to the following 12-month period, for years ending before April 1, 2021. Firms should review the FCA’s conditions for carrying over CPD requirements, which include where an individual, due to the current exceptional circumstances arising from COVID-19, will be unable to complete their CPD hours in their current CPD period. The FCA also notes that firms are still expected to demonstrate that relevant individuals remain competent to carry out their work and it expects most individuals to be able to continue to complete CPD while on furlough or working from home.
View the FCA's announcement on CPD requirements.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center. -
UK Conduct Authority Consults on Guidance on COVID-19 Measures for Mortgage Lenders and Payments Firms
05/22/2020
The U.K. Financial Conduct Authority has published two consultations on its draft guidance for firms on mortgages and safeguarding customers’ funds during the COVID-19 pandemic.
The first consultation relates to the FCA’s proposed guidance on how mortgage lenders should treat customers coming to the end of a payment holiday or those yet to request one. The timeframe for customers who have not yet benefited from a payment holiday to apply for one will be extended to October 31, 2020. The current ban on house repossessions will also be extended to October 31, 2020.
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UK Conduct Regulator Guidance on Post and Paper Documents During COVID-19
05/13/2020
The U.K. Financial Conduct Authority has published guidance on how firms should handle post and paper documents during COVID-19. The FCA expects firms to continue to comply with requirements for post and paper-based processes and, where this is not possible, firms should notify the FCA. The FCA also expects firms to contact customers who do not use online services in a timely manner and should be able to demonstrate any steps they have taken to mitigate the impact of any non-compliance with usual post and paper-based processes.
Firms should also ask customers who have sent cheques via post that have not yet been processed to contact the firm. The firm should consider whether the cheque relates to client money under the FCA’s Client Assets Sourcebook regime, whether they are able to provide the services without cashing the cheque and, if so, whether their intended actions are in compliance with the FCA Client Assets Sourcebook.
View the FCA's statement on post and paper documents.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center. -
UK Conduct Regulator Extends Absence Cover Under Senior Managers Regime
05/06/2020
The U.K. Financial Conduct Authority has extended the maximum period for which FCA solo-regulated firms are permitted to arrange cover for a Senior Manager without seeking the FCA's approval from 12 to 36 weeks, within a consecutive 12-month period. Firms will be able to reallocate an absent Senior Manager's prescribed responsibilities for up to a 36-week period via an application for a modification by consent of the FCA's standard 12-week rule. The modification by consent will apply from the date of the firm's application until April 30, 2021. The FCA is yet to issue any further guidance regarding the application of the 12-week rule to U.K. dual-regulated firms.
View the FCA's modification by consent to the 12-week rule. -
UK Conduct Regulator Publishes 2020/2021 Business Plan
04/07/2020
The U.K. Financial Conduct Authority has published its Business Plan for 2020/2021, which sets out its five key priorities for the next one to three years.
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UK Conduct Regulator Publishes Guidance on Senior Managers and Certification Regime for Solo-Regulated Firms in Response to COVID-19
04/03/2020
The U.K. Financial Conduct Authority has published guidance for solo-regulated firms on adherence to the Senior Managers and Certification Regime in light of COVID-19. The FCA has separately issued joint Guidance with the Prudential Regulation Authority on the SM&CR for dual-regulated firms.
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UK Regulators Publish Guidance on Senior Managers and Certification Regime for Dual-Regulated Firms in Response to COVID-19
04/03/2020
The U.K. Financial Conduct Authority and Prudential Regulation Authority have published joint guidance for dual-regulated firms on adherence to the Senior Managers and Certification Regime in light of COVID-19. The U.K. regulators intend to be flexible in enforcing SM&CR requirements given the disruption to personnel and operations triggered by the pandemic. The FCA has issued separate guidance for solo-regulated firms subject to the SM&CR.
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UK Financial Conduct Authority Clarifies Senior Manager Responsibility For Work-Related Travel
03/27/2020
The U.K. Financial Conduct Authority has published a statement emphasizing the responsibility of relevant Senior Managers or equivalent persons in prioritizing which of their firm's employees cannot work from home and need to travel into an office or business continuity site to perform their role. The FCA's statement is relevant to all FCA-regulated firms across the U.K. and is made in relation to the COVID-19 pandemic. The FCA states that it expects the number of individuals that need to travel into an office or other place of work to be considerably less than would be required for a business-as-usual basis. The FCA provides a list of roles that it considers are capable of being performed from home. These are: financial advisers, staff who can safely and securely trade shares and financial instruments from home, business support staff, claims management companies and those selling non-essential goods and credit.
View the FCA's statement.
Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Centre. -
International Organization of Securities Commissions Priorities for 2020
01/30/2020
The International Organization of Securities Commissions has published its annual work program, setting out its priorities for 2020. IOSCO will continue to focus on the five areas identified by its Board in 2019 as well as one new issue. The areas of focus are:- Crypto-assets: following its consultation last year, in February 2020, IOSCO will publish a final report on issues, risks and regulatory considerations relating to crypto-asset trading platforms. IOSCO will also publish the outcome of its review of the regulatory risks relating to investment funds exposures to crypto-assets. Finally, a report will be issued in early 2020 on issues relating to Global Stablecoins.
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UK Regulator Outlines Priorities for Supervising Benchmark Administrators
01/24/2020
The U.K. Financial Conduct Authority has written to the CEOs of benchmark administrators that it supervises. In the letter, the FCA sets out its supervisory strategy as well as the potential harms that benchmark administrators pose to their customers and to the financial markets. The FCA is asking all benchmark administrators to consider the harm that their firm may present and to consider how those could be mitigated. The FCA intends to focus over the next two years on the following areas to ensure that its supervision of benchmark administrators mitigates the identified risks:- Quality of standards: the quality of an administrator's governance and controls, the information provided in their Benchmark Statement, their recalculation and cessation policies, their outsourcing arrangements and their approach to operational resilience; and
- Excessive fees and costs: the FCA is concerned that competition may not be working well in the provision of benchmarks following the feedback received to its Wholesale Sector Competition Review and Asset Management Market Study. The FCA intends to carry out a Call for Input on access to data in wholesale markets so that it can gain a better understanding of the issues and determine whether any action is needed.
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Bank of England and UK Conduct Regulator Announce Proposals for Financial Sector Data Reforms
01/07/2020
The Bank of England and U.K. Financial Conduct Authority have published a series of proposals setting out their plans to enhance their data and analytics capabilities. The proposals include a revised FCA data strategy, a BoE discussion paper on transforming data collection and a viability report published by the FCA and BoE, together with seven regulated firms, on the possibilities of digital regulatory reporting. The FCA and BoE depend on data to conduct their supervisory responsibilities.
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European Banking Authority Launches Consultation on Draft Technical Standards Identifying Material Risk Impact Staff Subject to Compensation Requirements
12/19/2019
The European Banking Authority has launched a consultation on its draft Regulatory Technical Standards setting out the criteria for identifying staff whose professional activities have a material impact on credit institutions’ risk profiles. The EBA is required to produce the RTS under the revised Capital Requirements Directive (CRD V), in support of the CRD requirement that remuneration policies for staff whose professional activities have a material impact on the credit institution’s risk profile are appropriate to the size, nature and complexity of the credit institution in question.
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International Organization of Securities Commissions Consults on Combating Conduct Risks in Debt Capital Raising
12/16/2019
The International Organization of Securities Commissions has launched a consultation on methods of addressing potential conflicts of interest and other conduct risks that arise from market intermediaries’ participation in the debt capital raising process. Responses should be submitted by February 16, 2020.
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UK Conduct Regulator Publishes Feedback on Climate Change and Green Finance Projects
12/16/2019
The U.K. Financial Conduct Authority has published a feedback statement on its proposals for improving climate change disclosures and the information given to consumers about green financial products and services. The feedback statement follows the FCA’s discussion paper on climate change and green finance, in which it sought comments on potential changes to its regulatory approach in these areas.
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UK Conduct Regulator Publishes Consultation on Proposed Miscellaneous Changes to Rules
12/06/2019
The U.K. Financial Conduct Authority has published a consultation on its proposed changes to various aspects of the FCA Handbook.
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UK FICC Market Standards Board Consults on Draft Statement of Good Practice for Sovereign and Supranational Fixed Income Markets Auctions
12/02/2019
The U.K. FICC Market Standards Board is consulting on its draft Statement of Good Practice for Participation in Sovereign and Supranational Auctions in Fixed Income Markets. The FMSB is a standards setting body operated by wholesale market participants that was established in 2015. It is mandated to issue Standards that improve conduct in the wholesale Fixed Income, Currencies and Commodities markets. FMSB Member Firms are expected to consider their practices in light of the Standards, but the Standards are not binding and non-compliance will not affect whether a firm is deemed to have met its regulatory obligations.
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UK Conduct Regulator Publishes Consultation on Extension of Senior Managers Regime to Benchmark Administrators
11/29/2019
The U.K. Financial Conduct Authority has published a consultation paper seeking feedback on its proposals for the extension of the Senior Managers’ Regime to benchmark administrators. The FCA’s SMR was originally implemented for banks in 2016 and was extended to all authorized investment firms in December 2019. Benchmark administrators were only obliged to become FCA-authorized by the end of 2019 pursuant to the EU Benchmark Regulation, and so were granted a one-year extension from the roll-out of the SMR.
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UK Conduct Regulator Publishes Feedback on Regulatory Framework for Stewardship Discussion Paper
10/24/2019
The U.K. Financial Conduct Authority has published a feedback statement on the discussion paper, “Building a regulatory framework for effective stewardship” that it published in January 2019 together with the Financial Reporting Council. The discussion paper called for input on how best to encourage the capital markets community to engage more actively in “stewardship” of the assets in which they invest.
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UK Conduct Regulator Publishes Feedback on Climate Change and Green Finance Projects
10/16/2019
The U.K. Financial Conduct Authority has published a feedback statement on its proposals for improving climate change disclosures and the information given to consumers about green financial products and services. The feedback statement follows the FCA’s discussion paper on climate change and green finance, in which it sought comments on potential changes to its regulatory approach in these areas.
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UK FICC Markets Standards Board Publishes Statement of Good Practice on Conflicts of Interest
10/14/2019
The U.K. Fixed Income, Currencies and Commodities Markets Standards Board has published a statement of good practice for the FICC markets on conflicts of interest. The statement of good practice represents the FMSB’s view of best practice but is not subject to the FMSB’s adherence framework, so failure to comply will not indicate a failure to meet regulatory obligations.
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UK Prudential Regulator Finalizes Policy on Resolution Assessments For Senior Managers Regime
09/27/2019
The U.K. Prudential Regulation Authority has published a Policy Statement and final rules on resolution assessments and reporting amendments under the Senior Managers and Certification Regime. The PRA also published updated versions of "Strengthening individual accountability in banking" (SS28/15) and "Senior Managers Regime form: Statement of Responsibilities". The changes will take effect on December 9, 2019. The PRA has made minor changes to the drafting to take into account feedback and the measures announced on July 31, 2019 on resolvability assessments for all U.K. banks. The changes to the prescribed responsibility for recovery plans and resolution packs will impact U.K. banks and building societies with £50 billion or more in retail deposits. The changes to the Statement of Responsibilities will affect all PRA-regulated firms, unless they will not be subject to resolvability assessments in future.
View the Policy Statement.
View the updated rules and documentation.
View details of the final resolvability assessment framework for all U.K. banks. -
Banking Standards Board Publishes Good Practice Guidance on Regulatory References
09/03/2019
The Banking Standards Board has published a statement of good practice for firms when providing and requesting regulatory references in accordance with the Senior Managers and Certification Regime. The SM&CR for banks and building societies was established in 2016 to improve management within banking sector firms. The regime includes a requirement for firms to request references when determining whether a candidate is suitable for a senior management function, certification function or non-executive director function.
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UK Conduct Regulator Concludes No Changes Needed to Banking Senior Managers Regime
08/05/2019
The U.K. Financial Conduct Authority has published the findings of its review into the implementation of the Senior Managers and Certification Regime for the banking sector. The SM&CR came into force for banking firms in March 2016 with the aim of making individuals in the banking sector more accountable for their conduct. The FCA conducted the review to determine how the SM&CR has been implemented in the three years since its introduction. The review is intended to aid understanding of the impact of the regime and the FCA does not intend to make any policy changes on the basis of its findings. The FCA's review focuses on the implementation of the existing banking SM&CR, but an expanded SM&CR regime will come into force for all FCA solo-regulated firms from December 9, 2019. Firms falling within scope of the expanded regime should, where appropriate, also take the findings of the FCA's review into account in their implementation of the SM&CR.
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UK Conduct Regulator Publishes Final Senior Managers & Certification Regime Rules for Extended Regime
07/26/2019
The U.K. Financial Conduct Authority has published its final rules extending the Senior Managers and Certification Regime to all FCA solo-regulated firms. The final rules take into account responses to the FCA's consultation paper issued in January 2019, which proposed changes to optimize the expanded regime.
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UK Conduct Regulator Consults on Firms' Treatment of Vulnerable Consumers
07/23/2019
The U.K. Financial Conduct Authority has launched a consultation on its proposed guidance on how financial services firms should treat "vulnerable" consumers. The consultation will be divided into two stages: the first stage focuses on: (i) whether the draft guidance covers the right issues and provides sufficient clarity to firms on what they should do to improve outcomes for vulnerable consumers; (ii) the potential impact of the guidance on firms' costs and the potential benefit to consumers of the implementation of the guidance; and (iii) whether the guidance is sufficient to ensure firms take appropriate action to treat vulnerable consumers fairly or whether additional policy interventions are required. The second stage will seek input on a revised draft of the guidance, which will take account of feedback received during the first stage, together with a cost-benefit analysis. Responses to the first stage of the consultation should be provided by October 4, 2019.
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UK's Expanded Senior Managers and Certification Regimes Enter into Force
07/17/2019
The Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) Regulations 2019 have been made. The Regulations bring into force, from December 9, 2019, the expanded Senior Managers and Certification Regimes for all Financial Conduct Authority solo-regulated firms authorized under the Financial Services and Markets Act 2000, which include asset managers and investment firms carrying out certain activities. These firms need to complete their initial certification assessments for existing certified staff and new hires by December 9, 2020, although they must have identified certification staff by December 9, 2019. A transitional provision states that the regime will only apply to Claims Management Companies that are authorized by the FCA by December 9, 2019 and to other CMCs on the date that they obtain their authorization.
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UK Conduct Regulator Publishes New Measure of Market Cleanliness
07/09/2019
The U.K.'s Financial Conduct Authority has published details of its Abnormal Trading Volume ratio, a new metric by which the FCA intends to measure "market cleanliness". Market cleanliness refers to the level of market abuse activities, such as insider dealing or market manipulation, affecting transactions in the market. The FCA currently monitors market abuse using a variety of tools, including the mandatory submission of suspicious transaction and order reports by those involved in executing certain types of financial market transactions.
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UK Conduct Regulator Publishes Annual Report
07/09/2019
The U.K. Financial Conduct Authority has published its Annual Report and Accounts for the year ended March 31, 2019. The report considers topics including: (i) key highlights from 2018/2019; (ii) the U.K.'s withdrawal from the EU and the FCA's proposed approach to regulation in the wake of Brexit; (iii) the FCA's cross-sector and sector priorities; and (iv) perimeter issues. The report follows the publication of the FCA's first Annual Perimeter Report in June 2019, which provides a review of the FCA's regulatory perimeter.
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UK Conduct Regulator Publishes Consultation on Regulation of Proxy Advisors under Revised Shareholder Rights Directive
06/26/2019
The U.K. Financial Conduct Authority has published a consultation on proposed changes to its Decision Making and Penalties Manual and Enforcement Guide to incorporate its new responsibility for regulation of proxy advisors. The proposals will be of interest to those falling within the Proxy Advisors (Shareholders' Rights) Regulations 2019 and anyone who uses the services of proxy advisors. Responses to the consultation should be submitted by July 26, 2019.
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UK Conduct Regulator Publishes Dear CEO Letter on its Wealth Management and Stockbroking Supervision Strategy
06/13/2019
The U.K. Financial Conduct Authority has published a "Dear CEO" letter addressed to wealth management and stockbroking firms, identifying the key areas of focus for its two-year Wealth Management and Stockbroking supervision strategy. In the letter, the FCA identifies the four key types of harm for customers in this sector as: (i) reductions in savings and investments due to fraud, investment scams and inadequate client money or assets controls; (ii) loss of confidence in the industry due to mismanagement of conflicts of interest and market abuse; (iii) reductions in savings and investments due to substandard order handling procedures and execution processes; and (iv) inability to understand the costs of services provided by firms as a result of insufficient or inaccurate disclosure.
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