United Kingdom (and EU regulation)

ESMA Q&As on MiFID II and MiFIR investor protection and intermediaries

On 11 July 2019, the European Securities and Markets Authority updated its Q&As on the implementation of investor protection topics under MIFID II and MiFIR. The new Q&As provide clarification on the following: Best execution – Classification of financial instruments under RTS 27 if ESMA has not published any calibrated market sizes.… Continue Reading

GFXC provides further detail on the 3 year review, announces new co-vice chair, and releases new work products

On 10 July 2019, the GFXC released further detail from its 22 – 23 May meeting during which the committee discussed its mandate to consider the case for a comprehensive review of the FX Global Code (Code) at least every three years. The GFXC also announced that Neill Penney, managing director and co-head of trading … Continue Reading

ESMA updates its Q&As regarding the BMR

On 11 July 2019, the European Securities and Markets Authority (ESMA) updated its Q&As on the Benchmarks Regulation (BMR). The new Q&As provide clarification on the following issues: Is the scope of the definition of commodity benchmarks for the purposes of the BMR identical to the scope of the definition of commodity derivatives for the … Continue Reading

EBA reveals the four key trends that will affect payment institutions’ and e-money institutions’ business models

The European Banking Association (EBA) has published a report titled “The Impact of Fintech on Payment Institutions’ and E-Money Institutions’ business models” (the Report). The Report acknowledges the significant changes that have taken place in the broader Fintech landscape over the last few years, focussing on the Payment Institution (PI) and E-Money Institution (EMI) space. … Continue Reading

HM Treasury AML / CTF supervision report 2017-18

On 8 July 2019, HM Treasury published its latest anti-money laundering and counter-terrorist financing (AML / CTF) supervision report for 2017-2018. The report incorporates activity undertaken during this period which supervisors provided to HM Treasury in their annual returns and takes into account observations from the Financial Action Task Force’s (FATF) mutual evaluation report of … Continue Reading

FCA TechSprint on global anti-money laundering and financial crime

On 10 July 2019, the FCA announced that from 29 July to 2 August 2019, it will be holding a follow-up to its 2018 AML & Financial Crime TechSprint. At this follow-up event international colleagues and participants from the US, Europe, Africa, Asia and the Pacific will come together at the FCA’s offices to develop … Continue Reading

FCA new measure of market cleanliness – the Abnormal Trading Volume ratio

On 9 July 2019, the FCA published a new webpage on measuring market cleanliness following the introduction of an additional metric, the Abnormal Trading Volume ratio (ATV). The ATV ratio expands on the traditional market cleanliness metric of measuring solely large movements in share prices before a public announcement by encompassing over 1,000 events. The … Continue Reading

Senior Managers and Certification Regime: Finalising FCA Rules

On 10 July 2019, the FCA published a new web page, ‘Senior Managers and Certification Regime: Finalising FCA Rules’. On the web page the FCA explains that the Senior Managers and Certification Regime (SM&CR) is due to be extended to FCA solo regulated firms including claims management companies (CMCs) from 9 December 2019. However, given … Continue Reading

EBA report on progress made on its roadmap to repair IRB models

On 9 July 2019, the European Banking Authority (EBA) published a progress report on the roadmap set out in 2016 to repair internal models used to calculate own funds requirements for credit risk under the internal ratings based (IRB) approach. The EBA’s IRB roadmap was set up to address concerns about undue variability of own … Continue Reading

ESAs publish recommendations on the supervision of retail financial services provided across borders

On 9 July 2019, the Joint Committee of the European Supervisory Authorities (ESAs) published a report on the cross-border supervision of retail financial services. The report provides an overview of the main rules that apply in the EU in respect of consumer protection, conduct of business, and the cooperation between Member State national competent authorities … Continue Reading

Statutory report on the implementation of the Consumer Contracts Regulations 2013

On 4 July 2019, the Department for Business, Energy & Industrial Strategy published its first ever statutory report on the implementation of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the Regulations). The Regulations implement the EU Consumer Rights Directive. The Regulations seek to do this in the UK by setting out: the … Continue Reading

ECB assesses impact of FinTech on payment institutions’ and e-money institutions’ business models

On 8 July 2019, the European Banking Authority (EBA) published a thematic report on the impact of FinTech on payment institutions’ (PIs) and electronic money institutions’ (EMIs) business models. Key points in the report include: the payments landscape in the EU is undergoing significant transformation due to the introduction of the revised Payment Services Directive … Continue Reading

ECB guide to internal models

On 8 July 2019, the European Central Bank (ECB) published finalised chapters to its guide to internal models covering credit risk, market risk and counterparty credit risk. These risk type-specific chapters complement earlier chapters on general topics such as internal governance and audit.   Articles 143, 283 and 363 of the Capital Requirements Regulation (CRR) … Continue Reading

Update of annual equity transparency calculations – application of the tick size regime for third-country shares

On 7 July 2019, the European Securities and Markets Authority (ESMA) published a statement regarding the updated results of the annual equity transparency calculations published on 21 June 2019. ESMA states that it is currently investigating  an issue with the updated calculations which appears to affect the results for shares whose main pool of liquidity … Continue Reading

UK Finance good practice guidelines – access to payment account services

On 4 July 2019, UK Finance published guidelines aimed at both credit institutions providing access to payment account services and applicants seeking access to such an account within the UK. The guidelines are voluntary and are intended to assist the banking industry in implementing the requirements of proportionality, objectivity and non-discrimination set out in Regulation … Continue Reading

Non-bank payment service providers – requirements for safeguarding of customer funds

On 4 July 2019, the FCA published a new web page concerning a multi-firm review it had undertaken with 11 non-bank payment service providers to assess how well they meet the requirements for safeguarding service users’ funds in the Payment Services Regulations 2017 and Electronic Money Regulations 2011. The new web page sets out the … Continue Reading

FATF Recommendations updated – interpretative note on virtual assets

On 21 June 2019, the Financial Action Task Force (FATF) updated its Recommendations by adding an interpretative note to Recommendation 15 which sets out in detail the application of the FATF Standards to virtual asset activities and service providers. The interpretative note establishes binding measures relevant for both countries and virtual asset service providers (as … Continue Reading

UK Government releases final Report on Independent Review of the Modern Slavery Act 2015

On 22 May 2019, the UK Government presented to Parliament its final Report following the conclusion of the Independent Review of the Modern Slavery Act 2015 (the “Act”). The Independent Review was launched in July 2018 by Frank Field MP, Maria Miller MP and Baroness Butler-Sloss. The Review focused on the following four areas relevant … Continue Reading

Commission adopts Delegated Regulation amending PRIIPs Delegated Regulation to align transitional arrangements

On 3 July 2019, the European Commission adopted a Delegated Regulation which lays down a transitional arrangement under Delegated Regulation (EU) 2017/653 that is consistent with the extended transitional arrangement in Regulation (EU) No 1286/2014. It allows manufacturers of packaged retail and insurance-based investment products (PRIIPs) that offer investment funds as the only underlying investment … Continue Reading

FSB publishes review of TLAC Standard

On 3 July 2019, the Financial Stability Board (FSB) published a technical review of the implementation of the total loss-absorbing capacity (TLAC) standard for global systemically important banks (G-SIBs) in resolution. The review finds that: progress has been steady and significant in both the setting of external TLAC requirements by authorities and the issuance of … Continue Reading

SRB publishes paper on public interest assessment

On 3 July 2019, the Single Resolution Board (SRB) published a paper outlining its approach to public interest assessment. The identification of public interest is a necessary pre-condition for taking resolution action in respect of a failing bank. Whenever the SRB concludes that there is public interest in resolving a bank and adopts a resolution … Continue Reading

FCA statement on the Joint Declaration on climate change

On 2 July 2019, the FCA published a Joint Declaration with the PRA, the Pensions Regulator and Financial Reporting Council, welcoming the publication of the Government’s Green Finance Strategy and setting out a shared understanding of the financial risks and opportunities of climate change. The FCA welcomes the Chancellor’s announcement that the FCA will have … Continue Reading

FCA proposes ban on sale of crypto-derivatives to retail consumers

On 3 July 2019, the FCA issued Consultation Paper 19/22: Restricting the sale to retail clients of investment products that reference cryptoassets (CP19/22). In CP19/22 the FCA are proposing to ban the sale, marketing and distribution to retail clients of derivatives and exchange traded notes (ETNs) referencing unregulated transferable cryptoassets. These measures will be applied … Continue Reading