June 2017

The European Commission has published long-awaited legislative proposals on creating a pan-European Personal Pension’s Product (PEPP). The PEPP regime will provide the building blocks for the creation of a voluntary single personal pension product that can be marketed by providers on a pan-European scale. The new regime is intended to sit alongside existing national products rather than replace them, but the Commission hopes the new product will also play a role in building up those national markets where provision of private pensions is still lacking.

The European Banking Authority (EBA) has published a report setting out its conclusions following an assessment of innovative uses of consumer data by financial institutions. The report looks at both risks and potential benefits of this innovation and identifies a number of requirements under EU law applying to financial institutions, which mitigate many of the risks identified by the EBA.

On 28 June 2017, the FCA published its long awaited final report on its asset management market study. The final report, which is over 100 pages long plus five annexes, confirms some of the findings set out in the FCA’s interim report published on 18 November 2016, in particular the FCA’s assessment regarding competition in the asset management industry, communications with investors and practices in the investment consultancy sector generally.

In summary the FCA found that:

  • evidence suggests that there is weak price competition in a number of areas of the asset management industry. This has a material impact on investment returns for investors through the charges they pay for asset management services;
  • despite a large number of firms operating in the market, the FCA’s sample of firms showed the asset management industry has seen sustained, high profits over a number of years;
  • investors are not always clear what the objectives of funds are, and fund performance is sometimes reported against an inappropriate benchmark; and
  • there are a wider range of investors in the institutional market. This includes many small pension schemes which rely heavily on the advice of consultants. The FCA found concerns about the way the investment consultant market operates.

There has been published an ‘I’ item note from the General Secretariat of the Council of the EU to its Permanent Representatives Committee asking it to approve the final compromise text regarding the proposed Regulation amending the Regulation on European venture capital funds and the Regulation on European social entrepreneurship funds.

The Council has also

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have co-published a consultative report, Framework for supervisory stress testing of central counterparties (the framework).

The framework is designed to support supervisory stress tests (SST) conducted by one or more authorities that examine the potential macro-level impact of a