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SI 2019/1198: This enactment is made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for Brexit. This enactment brings into force a certain provision of the 2018 Act, relating to the repeal of the European Communities Act 1972, in the UK on 17 August 2019.
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An opinion of the European Economic and Social Committee (EESC) on the Communication from the European Commission to the European Parliament, the Council of the EU, the European Central Bank (ECB), the EESC, the Committee of the Regions and the European Investment Bank (EIB) entitled ‘Investment Plan for Europe—stock taking and next steps’ (COM(2018) 771 final) was published in the Official Journal of the EU (OJ).
An opinion of the EESC on the Communication from the European Commission to the European Parliament, the European Council (Euro Summit), the Council of the EU, the ECB, the EESC and the Committee of the Regions entitled ‘Towards a stronger international role of the euro’ (COM(2018) 796 final) was published in the OJ.
The chair of the ECB’s Supervisory Board, Andrea Enria, wrote to three members of the European Parliament (MEPs) in response to a letter from those MEPs regarding a bank under ECB supervision. The ECB says it cannot comment on individual credit institutions and their business decisions for professional secrecy reasons under the Capital Requirements Directive 2013/36/EU (CRD IV), but instead it sets out some considerations that may help the MEPs to better understand the ECB’s supervisory role.
EBA updates reporting framework 2.9
The European Banking Authority (EBA) published phase two of its technical package on reporting framework 2.9. The new release of reporting framework 2.9 includes the validation rules, the DPM data dictionary and XBRL taxonomies. The update reflects the amendments to the Implementing Technical Standards (ITS) under the Capital Requirements Regulation on supervisory reporting related to FINREP and those to the ITS on benchmarking of internal approaches, both published on 16 July 2019.
The chair of the ECB’s Supervisory Board, Andrea Enria, wrote to three MEPs in response to a letter from those MEPs regarding a bank under ECB supervision. The ECB says it cannot comment on individual credit institutions and their business decisions for professional secrecy reasons under the CRD IV, but instead it sets out some considerations that may help the MEPs to better understand the ECB’s supervisory role.
The FSB published the five public responses it received to its consultation on the public disclosure of resolution planning and resolvability. The discussion paper, issued on 3 June 2019, explored how general and firm-specific disclosures on resolution planning and resolvability could be further enhanced, focusing mainly on disclosures of resolution planning for global systemically important banks (G-SIBs) although many of the disclosure approaches discussed are also relevant to domestic systemically important banks and other firms subject to a resolution planning requirement.
The FSB published the three public responses it received to its consultation on the solvent wind-down of derivatives and trading portfolios by G-SIBs. The discussion paper, issued on 3 June 2019, sets out considerations that may be relevant for authorities and firms for both recovery and resolution planning.
The Bank for International Settlements (BIS) published a speech by Claudia Buch, vice-president of the Deutsche Bundesbank, at the seminar ‘Statistics on Fintech—Bringing Together Demand and Supply to Measure its Impact’ in Kuala Lumpur on 17 August 2019. In the speech, Ms Buch discussed digitalisation, competition and financial stability in the banking markets.
The Financial Stability Board (FSB) published responses to its consultation on its evaluation of the effects of post-crisis financial regulatory reforms on the financing of small and medium-sized enterprises (SMEs).
The Financial Action Task Force (FATF) published an updated overview of the anti-money laundering (AML) and counter-terrorist financing (CTF) ratings of the 205 jurisdictions that have each committed to implementing the FATF Recommendations. It also published follow-up reports on the AML and CTF regimes in Bangladesh, Cambodia, Fiji and Myanmar.
The Serious Fraud Office (SFO) wrote to investors in London Capital & Finance (LCF) setting out details of its investigation into the sale of mini-bonds and ISA bonds, and providing advice on the steps investors need to take now. The Financial Conduct Authority (FCA), whose investigation will proceed jointly with the SFO’s, also updated its webpage with similar advice and information for those affected.
The amount of money criminals plundered from bank and credit card accounts rose 57% in the first half of this year, bucking a trend for falling sums in other kinds of fraud, according to a report published.
The Financial Ombudsman Service (FOS) published its latest quarterly data showing the number of complaints it received between April and June 2019. A significant number of complaints relate to PPI, however, the FOS highlights that it is upholding a high proportion of complaints about high cost credit. For the first time, the FOS also published data relating to the complaints it received about claims management companies (CMCs) since becoming responsible for complaints about CMCs in April 2019.
CMA launches merger inquiry into MUFG Bank’s proposed acquisition of DVB Bank’s aviation business
The Competition and Markets Authority (CMA) announced that it is investigating the anticipated acquisition by MUFG Bank Ltd relating to the aviation business of DVB Bank SE. The inquiry will consider whether the proposed acquisition would result in a relevant merger situation under the Enterprise Act 2002 and, if so, whether that situation might be expected to result in a ‘substantial lessening of competition’ within any UK market or markets for goods or services. The CMA is inviting comments from interested parties by 3 September 2019, to help it to reach its decision by the current statutory deadline of 14 October 2019.
The BIS published a speech by Claudia Buch, vice-president of the Deutsche Bundesbank, at the seminar ‘Statistics on Fintech—Bringing Together Demand and Supply to Measure its Impact’ in Kuala Lumpur on 17 August 2019. In the speech, Ms Buch discussed digitalisation, competition and financial stability in the banking markets.
The FSCS updated its webpage for customers of Alpha Insurance A/S, the Danish insurance company declared bankrupt on 8 May 2018. In the update, the FSCS confirms that it will compensate Alpha Insurance latent defect premium insurance policyholders, following the collapse of the deal arranged by BCR Legal Group Ltd to provide replacement cover for Alpha’s 10-year latent defect and structural damage insurance policies due to various last-minute issues.
The FOS published its latest quarterly data showing the number of complaints it received between April and June 2019. A significant number of complaints relate to PPI, however, the FOS highlights that it is upholding a high proportion of complaints about high cost credit. For the first time, the FOS also published data relating to the complaints it received about CMCs since becoming responsible for complaints about CMCs in April 2019.
The SFO wrote to investors in LCF setting out details of its investigation into the sale of mini-bonds and ISA bonds, and providing advice on the steps investors need to take now. The FCA, whose investigation will proceed jointly with the SFO’s, also updated its webpage with similar advice and information for those affected.
Following the referral of a 2016 Decision Notice issued by the FCA, the Upper Tribunal found that Andrew Tinney, a former chief operating officer (COO) of Barclays Wealth and Investment Management, breached his obligation as an approved person to act with integrity. The Upper Tribunal found that Mr Tinney was reckless in giving the impression that a critical document he saw did not exist, though it said that the FCA did not prove separate allegations that Mr Tinney made false or misleading statements regarding the document. The judgment is available at [2019] UKUT 227 (TCC).
The Advertising Standards Authority (ASA) ruled that an advert for the cryptocurrency trading platform BitMEX, seen on 3 January 2019, misleadingly exaggerated the return on investment and failed to illustrate the risk of the investment, and was therefore in breach of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code).
The ECB published a report by the private sector working group on euro risk-free rates, which sets out recommendations on the transition from the euro overnight index average (EONIA) to the euro short-term rate (€STR) for cash and derivatives products. The report urges market participants to prepare for the change in EONIA’s publication time that will follow the change in EONIA’s methodology as of 2 October 2019 and the discontinuation of EONIA on 3 January 2022.
The International Accounting Standards Board (IASB) added the second phase of its project focused on potential financial reporting implications linked to the interest rate benchmark reform—IBOR reform—to its work plan.
The International Swaps and Derivatives Association (ISDA) wrote to the European Commission and the European Securities and Markets Authority (ESMA), in support of an urgent request by the chair of the EU Risk-free Rate Working Group for a statement clarifying that changes made to existing transactions for benchmark reform purposes would not result in margin or clearing obligations being imposed under the European Market Infrastructure Regulation (EU) 648/2012 (EMIR).
The ECB published an opinion of 16 August 2019 on the sale and purchase of credit facilities (CON/2019/30), following a request from the Ministry of Finance of Cyprus for an opinion on a draft law amending Cyprus’s ‘law on the sale and purchase of credit facilities’.
The International Securities Lending Association (ISLA), the Futures Industry Association (FIA), the International Capital Market Association (ICMA) and ISDA are consulting on a new master reporting agreement, which will provide for both mandatory and delegated reporting of securities financing transactions under Regulation (EU) 2015/2365 (SFTR) and derivative transactions under EMIR entered into under standard industry documentation. Feedback is sought by 23 August 2019.
The Financial Markets Law Committee (FMLC) published a letter it sent to HM Treasury regarding the Treasury’s review of the Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013, which implemented EMIR in the UK. The review may result in proposed changes to the Part VII of the Companies Act 1989.
ISDA wrote to the European Commission and ESMA, in support of an urgent request by the chair of the EU Risk-free Rate Working Group for a statement clarifying that changes made to existing transactions for benchmark reform purposes would not result in margin or clearing obligations being imposed under EMIR.
The WFE published a white paper on sustainability and commodity derivatives, which explores sustainability in the context of commodity derivatives markets and is intended to stimulate discussion among WFE members and the wider commodity derivatives industry about how they might respond to the potential impact of sustainability issues on commodity markets.
The Investment Association (IA) published an updated version of its model trust deed for charity authorised investment funds (CAIFs). The model trust deed is available on the IA’s website alongside a guide, produced jointly by the IA, the Charity Investors Group and the Charity Law Association, for managers wishing to set up a CAIF.
The Advertising Standards Authority (ASA) ruled that adverts for investment advisory service Stockmarket Insider, seen in March 2019, were in breach of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code). The ASA concluded the adverts were misleading as they contained unsubstantiated claims regarding the service’s performance, in addition to customer testimonials for which there was no evidence relating to their veracity.
A decision by the ECB on the procedure for recognising non-euro area Member States as reporting Member States under Regulation (EU) 2016/867 on the collection of granular credit and credit risk data (the AnaCredit Regulation) was published in the OJ. The decision was adopted by the ECB on 18 July 2019 and will enter into force on 5 September 2019.
The CMA announced that it is investigating the anticipated acquisition by MUFG Bank Ltd relating to the aviation business of DVB Bank SE. The inquiry will consider whether the proposed acquisition would result in a relevant merger situation under the Enterprise Act 2002 and, if so, whether that situation might be expected to result in a ‘substantial lessening of competition’ within any UK market or markets for goods or services. The CMA is inviting comments from interested parties by 3 September 2019, to help it to reach its decision by the current statutory deadline of 14 October 2019.
The CMA revoked the directions given to Lloyds Banking Group (LBG) on 1 April 2019 on confirmation by the implementation trustee that LBG was compliant with Article 14.1 of the Retail Banking Market Investigation Order 2017 with respect to app-to-app redirection functionality.
The EBA published phase two of its technical package on reporting framework 2.9. The new release of reporting framework 2.9 includes the validation rules, the DPM data dictionary and XBRL taxonomies. The update reflects the amendments to the ITS under the Capital Requirements Regulation on supervisory reporting related to FINREP and those to the ITS on benchmarking of internal approaches, both published on 16 July 2019.
The Open Banking Implementation Entity published the latest service quality indicators application programming interfaces (APIs). The indicators are one of the measures required by the CMA following its investigation into the UK retail banking market. This data is published every six months and ultimately enables people to compare service levels provided by banks.
The ECB closed its Banks’ Integrated Reporting Dictionary (BIRD) website until further notice. It said unauthorised parties breached the security measures protecting the website, which is hosted by an external provider. Neither ECB internal systems nor market-sensitive data were affected.
Insurance Europe published its response to the International Association of Insurance Supervisors’ (IAIS) consultation on its new holistic framework for assessing systemic risk in insurance. Insurance Europe considers that a greater focus by the IAIS on potentially systemic activities of the insurance sector as a whole is warranted.
The Chancery Division held that it was not appropriate in the present case to exercise the court's discretion under s 111(3) of the Financial Services and Markets Act 2007 on an application to sanction a scheme for the transfer of annuity policies to a new company. Even though an independent expert was of the opinion, with which the regulators did not disagree, that the implementation of the scheme would cause no material adverse effect upon the security or benefits and reasonable expectations of the transferring policyholders as regards service standards and governance, such views were not determinative of whether it was appropriate in all the circumstances to exercise the discretion to sanction the scheme, and there were a number of factors that weighed heavily against the exercise of the court's discretion.
The FCA published a video to help consumers understand pension transfer advice. The video, entitled ‘FCA explains: Our expectations of financial advisers when advising you on your pension transfer,’ is designed to assist those who have transferred out of their defined benefit pension and are unclear whether they received good quality advice—including former members of the British Steel Pension Scheme. It will also be of interest to those who are considering transferring out of a defined benefit pension scheme and want to understand what the process should look like before they start.
The ECB decision of 26 July 2019 on the procedure and conditions for exercise by a competent authority of certain powers in relation to oversight of systemically important payment systems was published in the OJ. The decision will enter into force on 5 September 2019.
Following the FCA announcement of an agreed industry plan to give the payments and e-commerce industry extra time to implement strong customer authentication under the revised Payment Services Directive (EU) 2015/2366 (PSD2), the FCA published a Dear CEO letter which details its approach. The FCA’s announcement reflected the EBA’s opinion that more time was needed to implement SCA given the complexity of the requirements, a lack of preparedness and the potential for a significant impact on consumers.
The EBA and ESMA published a joint response to a letter from the European Commission dated 19 July regarding crypto-assets, including ‘stablecoins’. In their response, the EBA and ESMA welcomed the Commission’s work to address the issues identified by the authorities in their January 2019 reports on crypto-assets and initial coin offerings, and agree it is vital that further work progresses with urgency to inform potential actions by the new European Commission.
The ASA ruled that an advert for the cryptocurrency trading platform BitMEX, seen on 3 January 2019, misleadingly exaggerated the return on investment and failed to illustrate the risk of the investment, and was therefore in breach of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code).
An opinion of the EESC on the Communication from the European Commission to the European Parliament, the European Council, the Council of the EU, the EESC, the Committee of the Regions and the EIB entitled ‘Clean Planet for All—European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy’ (COM(2018) 773 final) was published in the OJ.
The World Federation of Exchanges (WFE) published a white paper on sustainability and commodity derivatives, which explores sustainability in the context of commodity derivatives markets and is intended to stimulate discussion among WFE members and the wider commodity derivatives industry about how they might respond to the potential impact of sustainability issues on commodity markets.
The Personal Investment Management & Financial Advice Association (PIMFA) published its response to the BSI draft technical advice (PAS 7340) framework for embedding sustainable finance principles in financial services organisations. PIMFA explains the vital role the financial services sector must play in promoting sustainable development and re-orientating the global economy towards a sustainable investment model.
23 August 2019
Payment services and systems
The deadline for responses to the European Payments Council’s (EPC) consultation on Electronic Invoice Presentment and Payment – draft documents for submission to ISO 20022 of new servicing messages is 23 August 2019.
The deadline for responses to the Payment Systems Regulator’s (PSR) CP19/6—Call for views: The PSR’s research into cash access, use and acceptance is 23 August 2019.
The deadline for submission of feedback to the FIA, ICMA, ISDA and ISLA, concerning a new master reporting agreement, which will provide for both mandatory and delegated reporting of SFTR and derivative transactions under EMIR entered into under standard industry documentation, is 23 August 2019.
The deadline for responses to the EPC’s consultation on draft mobile initiated Single Euro Payments Area (SEPA) credit transfer (MSCT) interoperability implementation guidelines (including SEPA credit transfer instant) is 24 August 2019.
Regulated activities
Consumer protection
The deadline for responses to HM Treasury’s consultation on the government’s proposed regulatory framework for bringing funeral plans within the remit of the FCA is 25 August 2019.
The deadline for feedback to the EPC’s public consultation on possible modifications to the SEPA Proxy Lookup Scheme Rulebook is 26 August 2019.
The deadline for responses to ESMA’s consultation on guidelines on periodic information and notification of material changes to be submitted to ESMA by trade repositories is 27 August 2019.
Brexit
Regulation of capital markets
The deadline for feedback to FCA CP19/26: Draft technical standards on the content and format of STS notifications under the onshored Securitisation Regulation is 27 August 2019.
Risk management and controls
Financial stability
The deadline for responses to the FSB’s survey on responses to and recovery from cyber incidents is 28 August 2019.
The final deadline for consumers to make a complaint about potentially being mis-sold a PPI policy.
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