January 2015

The European Central Bank (ECB) has published a letter from Danièle Nouy, Chair of the Supervisory Board, to the management of significant banks.

In the letter, Mrs Nouy states that there currently exists a broad variety of practices and requirements for the supervision of significant institutions in participating Member States. In looking to create a level playing field and ensure more effective supervision, the single supervisory mechanism intends to achieve full harmonisation of practices and requirements by developing common methodologies in all relevant supervisory areas and ensuring a smooth transition to new standards.

The European Commission held its first orientation debate at the College of Commissioners as it launched its project to create a capital markets union (CMU) for all Member States. The CMU aims to create a single market for capital by removing barriers to cross-border investment and lowering costs of funding within the EU. The intention of the CMU is to give businesses access to diverse sources of capital from around the EU and offer investors and savers additional opportunities for investment.

The International Organization of Securities Commissions (IOSCO) has published a final report entitled Risk Mitigation Standards for Non-centrally Cleared OTC Derivatives.

In the final report IOSCO sets out nine standards aimed at mitigating the risks in the non-centrally cleared over-the-counter (OTC) derivatives markets. Each standard is accompanied by key considerations that describe how the standard should be implemented. The report states that authorities should seek to introduce regulatory requirements or guidance implementing each standard in a way that is consistent with the key considerations. Explanatory notes to the standards provide further elaboration on the standards and key considerations, and explain the rationales behind them.

The Basel Committee on Banking Supervision (BCBS) has published its final standard for the revised Pillar 3 disclosure requirements.

The revised requirements will take effect from end-2016. They supersede the existing Pillar 3 disclosure requirements first issued as part of the Basel II framework in 2004 and the Basel 2.5 revisions and enhancements introduced in 2009.

On December 18, 2014, the Commodity Futures Trading Commission’s (“CFTC’s”) Division of Clearing and Risk (“DCR”) issued extensions of previously granted “No-Action” relief to four foreign clearing organizations. The relief allows these foreign clearing organizations to continue to clear swaps for certain United States persons (“U.S. persons”) without being registered as a derivatives clearing organization…

The European Parliament’s Economic and Monetary Affairs Committee has voted in favour of the proposed Regulation on multilateral interchange fees for card-based payment transactions (MIF Regulation). The MIF Regulation has to now be put to a vote at the European Parliament, which is expected to occur in April 2015.

There has been published on the legislation.gov.uk website the Financial Services and Markets Act 2000 (Regulation of Auditors and Actuaries) (PRA Specified Powers) Order 2015 (the Order) together with an explanatory memorandum.

The Order specifies the enforcement powers under section 345A(5) of the Financial Services and Markets Act 2000, enabling the PRA to apply dissuasive sanctions to relevant auditors and actuaries, including public censure, monetary fines and disqualification, for non-compliance with PRA rules or statutory duties.

The Financial Ombudsman Service (FOS) has published the latest issue of its newsletter Ombudsman news (issue 123). This issue of Ombudsman news covers case studies concerning travel insurance for winter sports, examining instances where customers felt that their insurance policies were mis-sold, or that exclusions have been unfairly applied. Additionally, this issue covers case studies on making reasonable adjustments and meeting particular needs in relation to the Equality Act 2010, highlighting the range of complains received by the FOS. The FOS maintains that even though the Equality Act places a legal obligation on businesses to meet customers’ needs, they are required to treat all customers fairly, regardless of whether they have a “protected characteristic”.