May 2015

The Banking Act 2009 (the Act) gives the Bank of England (BoE), as resolution authority, the power to suspend (or stay) temporarily the termination rights of a party to a contract with a firm in resolution, provided that the UK institution continues to perform its payment and other substantive obligations under the contract (the temporary…

The FCA has published a speech given by Christopher Woolard (Director of Strategy and Competition, FCA) entitled The FCA and innovation.

At the beginning of his speech Mr Woolard mentions that since its creation in 2013, the FCA was designed to be abit different. It has a stronger focus on the consumer and a…

The European Securities and Markets Authority (ESMA) has published an opinion on the impact of EMIR on UCITS. The opinion is addressed to the EU institutions.

In its opinion ESMA calls for a modification of articles 50(1)(g)(iii) and 52 of the UCITS Directive to take into account the clearing obligation of certain types of over-the-counter (OTC) financial derivative transactions required by EMIR.

In particular, ESMA believes that the UCITS Directive should no longer distinguish between OTC financial derivative transactions and exchange-traded derivatives (ETDs). Instead, the distinction should be between cleared financial derivative transactions and non-cleared financial derivative transactions. ESMA states that this would have the merit of treating ETDs and cleared OTC financial derivative transactions which display similar characteristics in terms of counterparty risk in the same manner.

Article 32(6) of the Bank Recovery and Resolution Directive (BRRD) mandates the European Banking Authority (EBA) to issue guidelines to promote the convergence of supervisory and resolution practices regarding the interpretation of the different circumstances when an institution should be considered as failing or likely to fail.

Article 32(4) of the BRRD provides a general description of the circumstances in which an institution shall be deemed to be failing or likely to fail. The guidelines that the EBA is mandated to issue further specify those circumstances in order to ensure a consistent approach to triggering resolution, especially for cross-border groups.

The European Banking Authority (EBA) has published an updated version of the CEBS guidelines on technical aspects of the management of interest rate risk arising from non-trading activities under the supervisory review process, published on 3 October 2006. The guidance set out in these updated guidelines applies to the interest rate risk arising from non-trading activities, one of the Pillar 2 risks specified in the CRD IV.

The Bank of England (BoE) has published a consultation paper setting out its proposed policy for exercising its power to direct institutions to address impediments to resolvability under section 3A of the Banking Act 2009 (the Banking Act) as amended following the transposition of the Bank Recovery and Resolution Directive. The consultation paper describes the…

The FCA has published the terms of reference for its investment and corporate banking market study. The market study will examine whether there are areas of investment and corporate banking services where competition may not be working well. The FCA is focusing on primary market and related activities provided in the UK. The FCA is focusing on three key issues:

  • choice of banks and advisers for clients;
  • limited transparency in the provision of services; and
  • practices of bundling and cross-subsidisation of services.

Norton Rose Fulbright’s global cryptocurrency team has produced a global legal and regulatory guide to cryptocurrencies.

The guide will be issued in a series of chapters, published monthly:

  • Introduction to cryptocurrencies;
  • The legal nature of cryptocurrency;
  • Insuring cryptocurrency risks;
  • Taxation of cryptocurrencies;
  • Cryptocurrency litigation risks;
  • Taking security over cryptocurrency;
  • Cryptocurrencies crime and compliance; and
  • Regulation of cryptocurrencies.

The PRA has published Consultation Paper 18/5: Corporate governance: Board responsibilities (CP18/15). CP18/15 is relevant to all PRA-regulated firms and seeks views on a draft supervisory statement which identifies some key aspects of good board governance to which the PRA attaches particular importance in the conduct of its supervision. However, the supervisory statement is not intended to be a comprehensive guide to good corporate governance and there are other sources including the Financial Reporting Council’s Corporate Governance Code.

The FCA has published on its website a letter that was sent to remuneration committee chairs of firms that fall within proportionality tier 1. The letter is dated November 2014 and was prepared, as firms went into the 2014/15 remuneration round, to highlight the FCA’s expectations on the application of malus that it expected a remuneration committee to meet. Firms are advised that the letter should be considered in the context of any previous firm-specific feedback that they have previously received from the FCA and which still remains valid.