On August 11, the Prudential Regulation Authority (PRA) issued a consultation paper (CP16/14) setting out proposed changes to the PRA Rulebook in order to implement the Solvency II Directive, as amended by the Omnibus II Directive. This is the third consultation paper on Solvency II transposition and follows CP11/22 and CP12/13 published by the FSA in November 2011 and July 2012 respectively.
The Financial Conduct Authority (FCA) has fined Stonebridge International Insurance Ltd (Stonebridge) £8,373,600 in relation to sales of accident insurance products for breaches of Principle 3 (management and control) and Principle 6 (customers’ interests) of the FCA’s Principles for Businesses. Stonebridge outsourced the sales and customer services operations of its personal accident, accidental death and accidental cash plan insurance products (underwritten by Stonebridge) to various authorised intermediaries. The FCA final notice identifies a number of failings including weaknesses in systems and controls, poor oversight of outsourced functions, inadequate information disclosure at point of sale and a failure to take reasonable steps to ensure that customers were treated fairly.
ICE Benchmark Administration Ltd (IBA) has issued a consultation paper on the measures it is proposing to adopt in the event of an error occurring in fixing the published rate of the London Interbank Offered Rate.
The FCA has published Consultation Paper 14/16: Proposed rules for independent governance committees (CP14/16).
In CP14/16, the FCA sets out proposed rules that will require the providers of workplace personal pension schemes to set up and maintain independent governance committees (IGCs). The intention behind the IGCs is to have representatives that act independently of the firm and in the interests of the scheme members.
The FCA has issued a press release stating that since 1 April, it has reviewed over 1,500 financial promotions for consumer credit products. In the same period the FCA has opened 227 cases about non-compliant promotions for products such as payday loans, debt management services and credit brokers. A quarter of these cases relate to advertisements for high-cost short-term credit, with many not prominently displaying a risk warning or representative APR.
The FCA has published a speech given by Martin Wheatley, (Chief Executive, FCA) entitled The technology challenge.
In his speech, Mr Wheatley focusses on the challenges and opportunities presented to firms by the advent of technological developments. He notes that the financial sector has a long history of promoting innovation but that over time this innovation has in itself developed along with the different types of problems it presents. The difference between then and now, Mr Wheatley points out, is that the pace, volume and origins of change have moved forward which in turn creates very different problems for financial services leaders.
The Dutch Central Bank (De Nederlandsche Bank) has published points of attention in relation to EMIR. The document is meant for banks, insurers, pension funds that enter into over-the-counter (OTC) derivative contracts and (general) clearing members.
The European Securities and Markets Authority has recently published two consultation papers on the clearing obligation under EMIR.
The European Commission has adopted the review reports on the European System of Financial Supervision (ESFS). The reports consist of:
Norton Rose Fulbright LLP and KPMG have launched a consumer credit learning academy and interactive learning tool to assist consumer credit firms in addressing their obligations under the FCA regime. The consumer credit learning academy features an introductory module which explains some of the key changes brought about by the FCA’s regulation of consumer credit.