United Kingdom (and EU regulation)

Commission publishes consultation on the functioning of the EU securitisation framework

On 23 July 2021, the European Commission published a consultation looking into the functioning of the EU securitisation framework. The intention to consult was stated in the Commission’s action plan on the Capital Markets Union published in September 2020. This in turn stems from Article 46 of the EU Securitisation Regulation, which requires the Commission … Continue Reading

PRA publishes direction for modification by consent to exclude individuals from identification as risk takers

By Iona Wright (UK) and Arup Sen on July 26, 2021 Posted in Financial Services, United Kingdom

On 23 July 2021, the Prudential Regulation Authority (PRA) published a direction for modification by consent concerning the Remuneration Part of the PRA Rulebook relating to the identification of individuals as material risk takers (MRTs). It has also published guidelines on the modification, in addition to updating its webpage on waivers and modifications. Article 7 … Continue Reading

FOS board commission independent review

By Matthew Gregory (UK), John Coley (UK), Iain Hawthorn and Arup Sen on July 26, 2021 Posted in Financial Services, General, United Kingdom

The commissioning of independent reviews is something the board of the Financial Ombudsman Service (FOS) undertakes periodically. On 23 July, the FOS website published a press release stating that another independent review had been commissioned into whether the FOS can continue to meet the needs of its customers, both businesses and consumers. The review will … Continue Reading

Commission confirms delay to the application of the SFDR RTS

By Daniel Nevzat (UK), Imogen Garner (UK) and Arup Sen on July 26, 2021 Posted in ESG, ESG, ESG, ESG, ESG, EU policy, regulatory and legislative updates, EU policy, regulatory and legislative updates, EU policy, regulatory and legislative updates, EU policy, regulatory and legislative updates, EU policy, regulatory and legislative updates, France, Germany

On 23 July 2021, the European Commission published a letter (dated 8 July 2021) to the European Economic and Financial Affairs Council (ECOFIN) and the Council of the EU, confirming that the RTS application date, under the Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (SFDR), has been delayed until 1 July 2022. This letter is the … Continue Reading

Bank of England to review its approach to setting a minimum requirement for own funds and eligible liabilities

By Hannah Meakin (UK), Arup Sen and Simon Lovegrove (UK) on July 23, 2021 Posted in Banking, Financial Services, United Kingdom

On 22 July, the Bank of England published a Consultation Paper (CP) as part of its review of the UK’s framework for the Minimum Requirement for Own Funds and Eligible Liabilities (MREL). The CP is the second stage of the MREL Review and sets out the Bank’s proposed changes to its MREL framework. It follows … Continue Reading

Bank of England publishes an operational guide to executing bail-in

By Hannah Meakin (UK), Simon Lovegrove (UK) and Arup Sen on July 23, 2021 Posted in Banking, Financial Services, United Kingdom

Bail-in is a key stabilisation tool afforded to the Bank of England by the Banking Act 2009, that ensures investors rather than public funds bear the burden of resolving failing banks. This operational guide published on 22 July provides practical information on the ways in which the Bank of England might execute a bail-in resolution, … Continue Reading

Treasury publishes response to Call for Evidence on Overseas Framework

By Jonathan Herbst (UK), Hannah Meakin (UK), Imogen Garner (UK), Arup Sen and Simon Lovegrove (UK) on July 23, 2021 Posted in Financial Services, United Kingdom

On 22 July, the Treasury published the response to the Call for Evidence on the Overseas Framework, which was initially issued in December 2020. The Call for Evidence received 34 responses, with submissions from stakeholders from a range of sectors spanning banking, legal, wholesale, trading venues, insurance and trade bodies. Submissions also emanated from a … Continue Reading

Treasury consults on amendments to Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs)

By Lisa Lee Lewis (UK) and Arup Sen on July 23, 2021 Posted in Money laundering, United Kingdom

This Treasury’s consultation invites views and evidence on the steps that the government proposes to take to amend the MLRs. The amendments are required to ensure that the UK continues to meet international standards set by the Financial Action Task Force, whilst also strengthening and ensuring clarity on how the anti-money laundering regime operates, following … Continue Reading

FCA issues statement for firms using certain exemptions to the Financial Promotions Order

By Matthew Gregory (UK) and Arup Sen on July 22, 2021 Posted in Financial Services, United Kingdom

The FCA has issued a statement to address an error made during the on-shoring of the The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the FPO). During the on-shoring of the FPO, the definition of Relevant Market inadvertently failed to include relevant UK markets. Presently, this means that the exemptions under Articles … Continue Reading

PRA issues PS18/21 to correct the definition of ‘higher paid material risk taker’

By Iona Wright (UK) and Arup Sen on July 22, 2021 Posted in Financial Services, United Kingdom

The Prudential Regulation Authority’s (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 9/21 ‘Remuneration: Correction to the definition of ‘higher paid material risk taker’. It also contains the PRA’s final policy, as follows: amendments to the Remuneration Part of the PRA Rulebook (Appendix 1); and an updated Supervisory Statement (SS) 2/17 … Continue Reading

Monthly Global FinTech regulatory updater

Every month we provide the Global Blockchain Business Council’s Post-Trade Distributed Ledger group with a global regulatory FinTech updater, the latest version of which can be found here. Post Trade Distributed Ledger (PTDL) Group is composed of over 40 prominent market infrastructure stakeholders whose shared vision of the use of distributed ledger technology has brought them … Continue Reading

Commission overhauls AML and CFT rules

By Lisa Lee Lewis (UK), John Coley (UK) and Simon Lovegrove (UK) on July 21, 2021 Posted in France, Germany, Italy, Money laundering, Money laundering, Money laundering, The Netherlands, United Kingdom

On 20 July 2021, the European Commission published a package of legislative proposals designed to strengthen the EU’s anti-money laundering and countering the financing of terrorism (AML/CFT) rules. The legislative package consists of a: Regulation establishing a new EU AML/CFT Authority. In the financial sector, this new European Authority directly supervise financial sector entities that … Continue Reading

FCA consults on post-Brexit divergence for PRIIPS regulation

By Matthew Gregory (UK) and Simon Lovegrove (UK) on July 21, 2021 Posted in Retail, United Kingdom

On 20 July 2021, the FCA published Consultation Paper 21/23: PRIIPs – Proposed scope rules and amendments to Regulatory Technical Standards (CP21/23). The proposals in CP21/23 will be of particular interest to consumers, consumer organisations and those firms and individuals that manufacture Packaged Retail and Insurance based Investment Products (PRIIPs) and those who advise on … Continue Reading

Basel Committee consults on an amendment to the process for reviewing the G-SIB methodology

On 20 July 2021, the Basel Committee of Banking Supervision published a consultation document setting out a technical amendment to the Basel framework. The amendment sets out a new process that will be used by the Committee to review the assessment methodology for global systemically important banks (G-SIBs). The Committee plans to replace the existing … Continue Reading

ESMA publishes fourth annual report on use of sanctions for UCITS

By Iona Wright (UK) on July 21, 2021 Posted in Enforcement, Enforcement, Enforcement, Enforcement, France, Germany, Investigations and enforcement, Italy, The Netherlands, United Kingdom

On 20 July 2021, the European Securities and Markets Authority (ESMA) issued its latest report in the use of supervisory sanctions by Member State competent authorities (NCAs) under the UCITS IV Directive. The report has been prepared in accordance with Article 99e(1) of the UCITS IV Directive and covers the period from 1 January 2020 … Continue Reading

ESMA makes new Q&As available

By Simon Lovegrove (UK) on July 21, 2021 Posted in Germany, Italy, Regulation and Compliance, Regulation and compliance, Regulation and compliance, Regulation and compliance, The Netherlands, United Kingdom

On 20 July 2021, the European Securities and Markets Authority announced that it had updated Q&As covering: Alternative Investment Fund Managers Directive. UCITS Directive. MiFIR data reporting. Prospectus Regulation. Benchmarks Regulation.… Continue Reading

ESMA publishes second report on sanctions under AIFMD

By Iona Wright (UK) on July 21, 2021 Posted in Enforcement, Enforcement, Enforcement, Enforcement, France, Germany, Investigations and enforcement, Italy, The Netherlands, United Kingdom

On 20 July 2021, the European Securities and Markets Authority (ESMA) issued its second annual report on the use by Member State competent authorities (NCAs) of sanctions under the Alternative Investment Fund Managers Directive (AIFMD). The report has been prepared in accordance with Article 48(3) AIFMD. It contains information on the penalties and measures imposed … Continue Reading

Commission sets out proposed Directive as regards access of NCAs to centralised bank account registries through the single access point

By Simon Lovegrove (UK) on July 21, 2021 Posted in France, Germany, Italy, Money laundering, Money laundering, Money laundering, The Netherlands, United Kingdom

On 20 July 2021, the European Commission published a draft Directive as regards access of Member State competent authorities to centralised bank account registries through the single access point. Article 32a of the Fifth Anti-Money Laundering Directive requires Member States to put in place centralised automated mechanisms, such as central registers or central electronic data … Continue Reading

HM Treasury consultation on SMCR for FMIs

By Simon Lovegrove (UK) on July 21, 2021 Posted in Clearing and settlement, United Kingdom

On 20 July 2021, HM Treasury issued a consultation document detailing a proposed Senior Managers and Certification Regime (SMCR) for financial market infrastructures (FMIs) supervised by the Bank of England (BoE). In practice, the FMIs are central counterparties, central securities depositories and payment systems recognized under the Banking Act 2009, and specified service providers to … Continue Reading

PRA launches Solvency II quantitative impact study and sets out its view on the matching adjustment and risk margin

By Laura Hodgson (UK) on July 21, 2021 Posted in Insurance, United Kingdom

The Prudential Regulation Authority (PRA) has published a ‘Dear CEO’ letter from Charlotte Gerken, Executive Director, Insurance, at the PRA concerning the launch of the data gathering exercise for the UK review of Solvency II. The data gathering exercise is known as a quantitative impact study (QIS). Firms have been invited by the PRA to … Continue Reading

FCA Dear CEO letter – authorized ESG and sustainable investment funds: improving quality and clarity

By Daniel Nevzat (UK) on July 20, 2021 Posted in ESG, United Kingdom

On 19 July 2021, the FCA published a Dear CEO letter which it had sent to authorised fund managers setting out its expectations on the design, delivery and disclosure of environmental, social and governance (ESG) and sustainable investment funds. The FCA notes that it receives a high volume of applications for the authorisation of funds … Continue Reading

FCA FAQs on Finalised Guidance on the fair treatment of vulnerable customers

By Matthew Gregory (UK) on July 20, 2021 Posted in Retail, United Kingdom

On 19 July 2021, the FCA published a document that answers the most frequently asked questions (FAQs) from its earlier webinar on Finalised Guidance 21/1: Guidance for firms on the fair treatment of vulnerable customers (FG21/2). The FAQs are grouped by theme, and the FCA’s answers link to key chapters and paragraphs in FG21/2, Feedback … Continue Reading

ESMA consults on remuneration requirements under MiFID II

By Iona Wright (UK) on July 20, 2021 Posted in Germany, Italy, Regulation and Compliance, Regulation and compliance, Regulation and compliance, Regulation and compliance, The Netherlands, United Kingdom

On 19 July 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper on draft guidelines on certain aspects of the MiFID II remuneration requirements. The purpose of these draft guidelines is to enhance clarity and foster convergence in the implementation of certain aspects of the new MiFID II remuneration requirements, replacing the … Continue Reading

ESMA finds NCAs imposed sanctions of €8.4 million for MiFID II breaches in 2020

By Simon Lovegrove (UK) on July 20, 2021 Posted in Enforcement, Enforcement, Enforcement, Enforcement, France, Germany, Investigations and enforcement, Italy, The Netherlands, United Kingdom

On 19 July 2021, the European Securities and Markets Authority (ESMA) published its third report on the use of sanctions and measures by Member State competent authorities (NCAs) under MiFID II. Overall, in 23 (out of 30) EU/EEA Member States, NCAs imposed a total of 613 sanctions and measures in 2020 for an aggregated value … Continue Reading