United Kingdom (and EU regulation)

New FCA webpage: Remuneration and performance management of sales staff (SYSC 19F)

On 23 May 2018, the FCA published a new web page containing information on chapter 19F of the Senior Management Arrangements, Systems and Controls sourcebook (SYSC), which implements the MiFID II requirements concerning the remuneration and performance management of sales staff. The rules are designed to help prevent failures in the sales process and to … Continue Reading

The Cash Ratio Deposits (Value Bands and Ratios) Order 2018

On 24 May 2018, there was published on the legislation.gov.uk website The Cash Ratio Deposits (Value Bands and Ratios) Order 2018. The Order amends the ratio used for calculating the percentage of eligible liabilities that eligible financial institutions are required to deposit in a non-interest bearing account at the Bank of England (BoE) under the … Continue Reading

European Commission publishes Sustainable Finance Package

On 24 May, the European Commission released a set of legislative proposals on financing sustainable growth (so called Sustainable Finance Package). These measures are the first steps towards implementing some of the recommendations of the EU’s High-Level Expert Group on sustainable finance published in January 2018 and are part of the European Commission Action Plan … Continue Reading

SME Growth Markets

On 24 May 2018, the European Commission published a draft of a Delegated Regulation amending Commission Delegated Regulation 2017/565 as regards certain registration conditions to promote the use of SME Growth Markets for the purposes of MiFID II. The Commission invites feedback on the draft Delegated Regulation by 21 June 2018. On the same date … Continue Reading

Latest Presidency compromise proposals – BRRD II, SRM II, CRR II and CRD V

On 23 May 2018, the Presidency of the Council of the EU published the latest compromise proposals concerning: • Draft Directive amending the Bank Recovery and Resolution Directive; • Draft Regulation amending the Regulation establishing the Single Resolution Mechanism; and • Draft Directive amending the Capital Requirements Directive IV. On 22 May 2018, the Council … Continue Reading

Building Societies and the future of retail banking

On 23 May 2018, the FCA published a speech by Jonathan Davidson (Director of Supervision – Retail and Authorisations, FCA) entitled Building Societies and the future of retail banking. In his speech Mr Davidson talks about opportunities for the building society sector in light of wider developments in the markets. His main message is that … Continue Reading

EBA updates list of O-SIIs in the EU

On 23 May 2018, the European Banking Authority (EBA) updated the list of Other Systemically Important Institutions (O-SIIs) in the EU. O-SIIs – those institutions which, along with Global Systemically Important Institutions (G-SIIs) are deemed systemically important – have been identified by Member State authorities according to criteria set out in EBA guidelines. The updated … Continue Reading

Member States to continue discussions over controversial ESAs review proposal

The legislative review of the European Commission’s September 2017 proposal for a Regulation amending the Regulations establishing the European Supervisory Authorities and other select European legislative acts (ESAs review proposal) is ongoing. As previously mentioned proposed amendments to select European legislative acts aim to reform the governance arrangements of the ESAs and strengthen their supervisory … Continue Reading

FCA speech – Turning technology against criminals

On 22 May 2018, the FCA published a speech by Megan Butler (Executive Director of Supervision – Investment, Wholesale and Specialists, FCA) entitled Turning technology against criminals. Key points in the speech include: it is important to recognise just how much of the direct threat to customers from financial crime has moved online. Phishing and … Continue Reading

PRA consults on approach to EU Securitisation Regulation

On 22 May 2018, the PRA published Consultation Paper 12/18: Securitisation – the new EU framework and Significant Risk Transfer (CP12/18). The proposals in CP12/18 are relevant to all PRA authorised Capital Requirements Directive IV (CRD IV) firms and all Solvency II firms.  In CP12/18 the PRA sets out proposals on its approach to the … Continue Reading

EBA consults on standards on estimation and identification of an economic downturn in IRB modelling

On 22 May 2018, the European Banking Authority (EBA) published two consultation papers on draft regulatory technical standards (RTS) specifying an economic downturn and on a set of guidelines related to the estimation of loss given default (LGD) appropriate for conditions of an economic downturn. The draft RTS specify the nature, severity and duration of … Continue Reading

MiFID II Passporting Amendment Instrument 2018

On 21 May 2018, the PRA published the MiFID II Passporting Amendment Instrument 2018 (the Instrument). The Instrument was made on 30 January 2018 and came into force on 5 February 2018. The Instrument amends the Passporting Part of the PRA Rulebook by requiring firms that wish to passport to use the template forms located … Continue Reading

Automated investment services – FCA expectations

On 21 May 2018, the FCA updated its web page on automated investment services. The web page refers to two FCA reviews which looked at firms offering automated online discretionary investment management (ODIM) and firms providing retail investment advice exclusively through automated channels (auto advice), where customers do not interact with human advisers and the … Continue Reading

Further amendments to JMLSG guidanceFurther amendments to JMLSG guidance

On 18 May 2018, the Joint Money Laundering Steering Group (JMLSG) published revised versions of two of the sectors in Part II of its Guidance – 12: Asset Finance and 17: Syndicated lending – on the prevention of money laundering and the financing of terrorism for the UK financial services industry. The JMLSG state that … Continue Reading

Delegated Regulation on exclusion of transactions with third country NFCs from CVA risk charge under CRR

On 18 May 2018, there was published in the Official Journal of the EU (OJ), Commission Delegated Regulation (EU) 2018/728 of 24 January 2018 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for procedures for excluding transactions with non-financial counterparties established in a third … Continue Reading

Commission Implementing Regulation on changes to benchmarking portfolios, reporting templates and reporting instructions

On 18 May 2018, there was published in the Official Journal of the EU (OJ), Commission Implementing Regulation (EU) 2018/688 of 23 March 2018 amending Implementing Regulation (EU) 2016/2070 as regards benchmarking portfolios, reporting templates and reporting instructions. The Commission Implementing Regulation amends Implementing Regulation (EU) 2016/2070 (which supplements the CRD IV by setting out … Continue Reading

FCA consults on new guidance on variation terms under unfair terms legislation

On 17 May 2018, the FCA published Guidance Consultation 18/2: Fairness of variation terms in financial services consumer contracts under the Consumer Rights Act 2015 (GC18/2). Following the removal of some unfair contract terms material from the FCA website in March 2015, the regulator received some views from trade associations and firms about how the … Continue Reading

ECB opinion on draft legislative proposals amending the Regulation establishing ESMA, MiFID II and Solvency II

On 17 May 2018, the European Central Bank (ECB) published its opinion (dated 11 May 2018) regarding the European Commission’s draft Regulation amending the Regulation establishing ESMA and the draft Directive amending MiFID II and the Solvency II Directive. In its general observations the ECB states that it generally supports the proposed Regulation’s objective of … Continue Reading

Corrigenda to delegated regulations under CSDR

On 17 May 2018, there was published in the Official Journal of the EU two Corrigenda making amendments to certain Commission Delegated Regulations supplementing the Regulation on improving securities settlement and regulating central securities depositories (CSDR): Corrigendum to Commission Delegated Regulation (EU) 2017/391 supplementing the CSDR with regard to regulatory technical standards (RTS) further specifying … Continue Reading

ECON votes on EMIR Refit Regulation

On 16 May 2018, the European Parliament published a press release stating that the Committee on Economic and Monetary Affairs Committee (ECON) had voted to adopt a draft report on the proposed Regulation amending the European Markets Infrastructure Regulation (EMIR). The draft Regulation is commonly known as the EMIR Refit Regulation. The next step will … Continue Reading

Global asset management quarterly – Ninth edition now available

The latest edition of global asset management quarterly is now available online. This issue includes the following: UK and European overview; UK tax treatment of “loyalty bonuses” paid to investors; Omnibus Regulation; FCA asset management market study; Ireland update; Luxembourg update; Asset management in South Africa – ten things to know; Hong Kong regulators turn … Continue Reading

ECB article on Brexit: impact of a potential transition period

On 16 May 2018, the European Central Bank (ECB) published a newsletter article regarding how the transition period affects what ECB Banking Supervision expects from banks. Key points in the article include: the precise content of the withdrawal agreement will not be known until late 2018. Uncertainty remains, including the risk that the agreement might … Continue Reading

ECON report on sustainable finance

On 16 May 2018, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) published its report (dated 4 May 2018) on sustainable finance. Among other things the report: calls on the European Commission to come forward with an ambitious legislative framework, recognising the proposals put forward in the Commission Action Plan on Sustainable Finance; … Continue Reading

ESMA FAQs on MiFID II transitional transparency calculations

On 15 May 2018, the European Securities and Markets Authority (ESMA) updated its frequently asked questions (FAQs) on transitional transparency calculations for equity and non-equity instruments. Unfortunately ESMA has not indicated what changes it has made to the FAQs.… Continue Reading