United Kingdom

Topic: Regulation and compliance

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ESMA consults on remuneration requirements under MiFID II

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

Commission Delegated Regulation supplementing MiFID II by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level

On 14 July 2021, the European Commission adopted a Delegated Regulation supplementing MiFID II by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level. Article 2(4) of MiFID II empowered the Commission to adopt regulatory technical standards (RTS) specifying the criteria for … Continue Reading

Letter from PRA to Treasury Committee on conditions for assessing a proposed change in control of a regulated firm

On 14 July 2021, the House of Commons’ Treasury Committee published a letter it had received from Sam Woods (Deputy Governor and CEO, PRA) which discussed the conditions for assessing a proposed change in control of a regulated firm. During an appearance before the Treasury Committee Mr Woods was asked to set out his thoughts … Continue Reading

Supervisory approach on the MiFIR open access provisions for ETDs

On 13 July 2021, the European Securities and Markets Authority (ESMA) issued a public statement concerning its supervisory approach on the MiFIR open access provisions for exchange traded derivatives (ETDs). The statement notes that: Article 54(2) of MiFIR provides Member State national competent authorities (NCAs) with the possibility to temporarily exempt trading venues and central … Continue Reading

PRA statement: Update on shareholder distributions by large UK banks

On 13 July 2021, the PRA issued a statement that provides an update on shareholder distributions by large UK banks. The PRA previously issued a statement last December on capital distributions by large UK banks and set out certain guardrails for distributions to ordinary shareholders in relation to full-year 2020 results. The PRA has reviewed … Continue Reading

ESMA warns firms and investors about risks arising from payment for order flow

On 13 July 2021, the European Securities and Markets Authority (ESMA) issued a public statement to remind firms that the receipt of payment for order flow (PFOF) raises significant investor protection concerns. The statement also reminds firms of their key MiFID II obligations intended to ensure that firms act in their clients’ best interest when … Continue Reading

G20 communiqué – third Finance Ministers and Central Bank Governors meeting

On 10 July 2021, the G20 published a communiqué following the third Finance Ministers and Central Bank Governors meeting in Venice. Among other things the communiqué: Reiterates the commitment to a timely and effective implementation of the G20 Roadmap to enhance cross-border payments by relevant authorities. In particular, it looks forward to the Financial Stability … Continue Reading

New FCA webpage – UK MiFIR data reporting and LIBOR transition

On 9 July 2021, the FCA published a new webpage concerning UK MiFIR data reporting and LIBOR transition. Specifically, the new webpage deals with the following questions: Should a transaction report be submitted when the reference rate for a previously reported contract changes from LIBOR to an alternative rate (whether as a result of the … Continue Reading

ESMA consults on the review of transparency requirements under MiFIR

On 9 July 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper setting out proposals to amend Commission Delegated Regulation 2017/587 (RTS 1) and Commission Delegated Regulation 2017/583 (RTS 2).   RTS 1 and RTS 2 specify the MiFIR pre- and post-trade transparency requirements for equity instruments and non-equity instruments. The consultation … Continue Reading

New FCA webpage – Agreements with overseas regulators

On 8 July 2021, the FCA published a new webpage setting out the multilateral and bilateral Memoranda of Understanding (MoUs) and other agreements it has signed with overseas regulators. The MoUs include those that the FCA has entered into with the European Supervisory Authorities, EEA national competent authorities and competent authorities in other jurisdictions including … Continue Reading

PRA, FCA, BoE Discussion Paper – Diversity and inclusion in the financial sector – working to drive change

On 7 July 2021, the PRA, FCA and the Bank of England in its capacity of supervising financial market infrastructure firms (together the regulators) issued a joint Discussion Paper on diversity and inclusion in the financial sector. In the Discussion Paper the regulators begin by setting out their role including how improving diversity and inclusion … Continue Reading

FCA multi-firm review – Authorised fund managers’ assessments of their funds’ value

On 6 July 2021, the FCA set out the findings from its recent review concerning the processes used by different Authorised Fund Managers (AFMs) when they carry out assessments of value for the funds they operate. The FCA found that most of the 18 fund managers it had reviewed between July 2020 and May 2021, … Continue Reading

Regulation of funeral plans

On 5 July 2021, there was published: HM Treasury consultation concerning pre-paid funeral plan providers and the Financial Services Compensation Scheme (FSCS). In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the FCA with effect from 29 July 2022. In its March 2021 consultation … Continue Reading

PRA Consultation Paper 15/21: Designating investment firms

On 5 July 2021, the PRA published Consultation Paper 15/21: Designating investment firms (CP15/21). In CP15/21 the PRA sets out proposals to make minor changes to its policy on designating investment firms. In particular, the PRA is proposing to amend the Statement of Policy ‘Designation of investment firms for prudential supervision by the PRA’ to: … Continue Reading

New HM Treasury papers on UK regulatory reform

On 1 July 2021, HM Treasury published the following papers: Mansion House speech by the Chancellor, Rishi Sunak MP. In his speech the Chancellor discusses the future of financial services in the UK. Among other things the Chancellor reports that the government is negotiating a “ground-breaking” deal with Switzerland which will be the “most ambitious … Continue Reading

MoU between HM Treasury and the Monetary Authority of Singapore

On 30 June 2021, the Chancellor announced a new financial partnership between the UK and Singapore. The Partnership is backed up by a non-legally binding memorandum of understanding (MoU) which aims to reduce frictions for firms serving UK and Singapore markets. Under the Partnership, the UK and Singapore will explore opportunities for greater financial cooperation, … Continue Reading

The Financial Markets and Insolvency (Transitional Provision) (EU Exit) (Amendment) Regulations 2021

On 30 June 2021, there was published on the legislation.gov.uk website The Financial Markets and Insolvency (Transitional Provision) (EU Exit) (Amendment) Regulations 2021. The statutory instrument amends The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (the 2019 Regulations). The 2019 Regulations provide for the continued operation of the legal framework … Continue Reading

The Markets in Financial Instruments (Capital Markets) (Amendment) Regulations 2021

On 30 June 2021, there was published on the legislation.gov.uk website The Markets in Financial Instruments (Capital Markets) (Amendment) Regulations 2021 (the Regulations). Together with planned FCA changes to the relevant requirements (see Consultation Paper 21/9: Changes to UK MiFID’s conduct and organisational requirements), the Regulations remove the obligation on trading and execution venues to … Continue Reading

FCA review finds weaknesses in some ‘host’ authorised fund management firms’ governance and operations

On 30 June 2021, the FCA published the findings of its multi firm review into the activities of host authorised fund manager firms (AFMs). The FCA reports that it found that whilst some firms were operating well, others are not. The FCA found weaknesses in governance structures, conflicts of interest management and operational controls.  The … Continue Reading

FCA PS21/6: Implementation of Investment Firms Prudential Regime

On 29 June 2021, the FCA published Policy Statement 21/6: Implementation of Investment Firms Prudential Regime (PS21/6). PS21/6 is the FCA’s first policy statement on the UK Investment Firm Prudential Regime (IFPR). In PS21/6 the FCA provides feedback on the comments it received on its first consultation paper on IFPR (Consultation Paper 20/24: A new … Continue Reading
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