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The Financial Conduct Authority (FCA) and the Dutch Authority for the Financial Markets (AFM) signed a joint agreement to formalise their partnership; agreeing to work more closely together to protect and enhance the integrity and stability of the countries’ financial systems. The agreement aims
to foster a stronger and sustainable relationship between the regulators. The agreement will apply whether the UK withdraws from the EU with or without a withdrawal agreement and will accompany the multilateral memorandum of understanding (MoU) between
the FCA and EU regulators announced in February 2019.
The House of Lords EU Financial Affairs Sub-Committee announced that it discussed the UK’s financial services exports in the context of Brexit in a one-off evidence session held on 5 June 2019. The session was attended by Anjalika Bardalai, chief economist
and head of research at TheCityUK.
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The Prudential Regulation Authority (PRA) published its Regulatory Digest for
April 2019. The issue contains banking publications and updates; systemic risk buffer rates for ring-fenced banks and large building societies; insurance publications and updates including CP11/19 ‘Solvency II: Maintenance of the transitional
measure on technical provisions’; information on PRA open consultations that close in June 2019; upcoming prudential regulation communications; other PRA publications and speeches during May 2019; and the regular Bank Underground, Bank Overground,
KnowledgeBank, and European and international developments sections.
The Chancellor of the Exchequer, Philip Hammond, announced that Ben Broadbent,
Deputy Governor of the Bank of England (BoE) with responsibility for monetary policy, was reappointed for a further term, effective from 1 July 2019. The Chancellor also announced the appointment of three new non-executive directors to the BoE’s
Court of Directors.
The FCA announced that Baroness Zahida Manzoor CBE was appointed
chair of the Financial Ombudsman Service (FOS). The appointment was made by the FCA board with the approval of HM Treasury. Baroness Manzoor will take up the role on 2 August 2019, succeeding Sir Nicholas Montagu.
The chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, addressed the
opening of the Federation of European Securities Exchanges’ 2019 convention in Dublin. He focused on cross-border regulation and supervision, the equivalence process and the impact of Brexit on the exchange of secondary market data.
ESMA invited volunteers to partake in its Consultative
Working Group (CWG), which advises its Investor Protection and Intermediaries Standing Committee (IPISC). CWG members are selected for a renewable term of two years. Applicants are asked to send their application by 4 July 2019.
The European Central Bank (ECB) published an updated version (Part I,
Part II and Part III) of the AnaCredit Reporting Manual. The Manual was updated to acknowledge and
incorporate additional explanations provided in the Q&As published on the ECB’s website between July 2017 and December 2018. It also incorporates a number of adjustments to address previous inconsistencies.
The European Commission published the May 2019 edition of its Banking and Finance Newsletter, which contains an interview with Michelle
Barnier discussing the negotiations with the UK, how Brexit will affect European financial markets, and what lessons the EU should draw from the UK’s decision to leave. The issue also contains a look ahead at the European leaders meeting in
Sibiu later in June 2019, where financial challenges priorities for the next few years will be discussed.
HM Treasury is consulting on the government’s proposed regulatory framework for bringing funeral plans within the remit of the FCA. Following concerns about the risk of consumer detriment in the pre-paid funeral plan market, the government
launched a call for evidence on the regulation of the sector in June 2018, which confirmed the need for compulsory regulation. Feedback is sought by 25 August 2019.
The FCA made available its webinar aired on 3 June 2019: Preparing for the Senior Managers & Certification Regime (SM&CR). The
webcast can now be viewed on-demand. The webinar considers how solo-regulated firms should prepare for the SM&CR, which comes into effect on 9 December 2019. The SM&CR will replace the Approved Persons Regime for firms that are solely regulated
Commission Implementing Regulation (EU) 2019/912 of
28 May 2019 amending Implementing Regulation (EU) 650/2014 laying down implementing technical standards (ITS) with regard to the format, structure, contents list and annual publication date of the supervisory information to be disclosed
by competent authorities in accordance with Directive 2013/36/EU (the Capital Requirements Directive (CRD IV)) was published in the Official Journal of the EU.
The Advisory Scientific Committee of the European Systemic Risk Board (ESRB) published a
report discussing how excessive regulatory complexity can contribute to systemic risk, and possible ways to address the issue, in view of the existing significant complexity and uncertainty in the financial system. The report aims to contribute to
the ongoing debate on the optimal form of financial regulation, taking an approach focused on addressing systemic risk in the whole financial system within the context of a continuously evolving environment.
The secretary general of the Financial Stability Board (FSB), Dietrich Domanski, gave a speech on ‘Co-operation
for the common good’, the evolving risk backdrop, and on global financial resilience at the Federal Reserve Bank of San Francisco and Monetary Authority of Singapore (MAS) symposium on Asian banking and finance.
TheCityUK, in collaboration with PwC, published a report:
‘Operational resilience in financial services: time to act’. The report makes a series of recommendations for industry and regulators to enhance operational resilience. In a speech given at the launch by Lyndon Nelson, deputy CEO & executive director, regulatory operations and supervisory risk specialists, the BoE welcomed the report. At the same time UK Finance,
in collaboration with EY, published ‘Perspectives:
Operational resilience in financial services’. Both reports address issues raised in the joint discussion paper ‘Building the UK financial sector’s operational resilience’, published in July 2018 (BoE DP1/18, PRA DP1/18 and
The FCA issued a press release reporting that
the FCA and the PRA fined R. Raphael & Sons plc (Raphaels) for failing to manage its outsourcing arrangements properly between April 2014 and December 2016. Raphaels received separate fines of £775,100 from the FCA and £1,112,152 from
the PRA in respect of these breaches (resulting in a combined fine of £1,887,252).
The FCA published decision notices
concerning Cathay International Holdings Limited and two of its directors, Mr Jin-Yi Lee and Mr Eric Siu. The FCA considers that Cathay breached the FCA’s Listing Principles and Disclosure Rules and Transparency Rules (DTR) and imposed a fine
of £411,000. In the FCA’s view, Mr Lee was knowingly concerned in the company’s breaches and so was fined £214,300. The FCA also considers that Mr Siu was knowingly concerned in one of the company’s breaches and was fined
The FCA issued a press release noting that it prohibited former Martins Brokers (UK) Ltd broker
Terry Farr from performing any function in relation to any regulated financial activity, on the basis that he acted dishonestly and lacked integrity, and as a result is not fit and proper to perform any function in relation to any regulated activity.
The Office of the Complaints Commissioner published final reports (FCA00484 and
FCA00535) criticising the FCA for its supervision of a firm where complaints
were made involving allegations of inappropriate investments and fraudulent activity. The FCA also published its response to the reports (FCA Response to Report FCA00484 and FCA Response to Report FCA00535).
The Financial Services Compensation Scheme (FSCS) issued an update on its investigation into London Capital & Finance
(LCF). Over the last few weeks the FSCS reviewed whether there may be grounds for compensation, and it believes there are sufficient grounds to carry on exploring these issues.
The FCA announced that Baroness Zahida Manzoor CBE was appointed
chair of the FOS. The appointment was made by the FCA board with the approval of HM Treasury. Baroness Manzoor will take up the role on 2 August 2019, succeeding Sir Nicholas Montagu.
The US Securities Exchange Commission (SEC) approved the Financial Industry Regulatory Authority’s (FINRA)
proposed amendments to the relevant rules of the FINRA Code of Arbitration Procedure for Industry Disputes and the FINRA Code of Arbitration Procedure for Customer Disputes to extend time periods for non-parties to respond to subpoenas and other orders
and to make related changes to enhance the discovery process for users. The amendments will be effective for cases filed on or after 1 July 2019.
Following consultation, the FCA published PS19/14 introducing rules aimed at preventing
harm to investors without stifling innovation in the peer-to-peer (P2P) sector. The new rules are designed to help better protect investors and allow firms and fundraisers to operate in a long-term, sustainable manner. They include a limit on investments
in P2P agreements for retail customers new to the sector of 10% of investable assets. P2P platforms need to implement the changes by 9 December 2019, except for the application of the Mortgage and Home Finance Conduct of Business (MCOB), which applies
with immediate effect.
The FCA is holding a series of afternoon events across
the UK to discuss issues around the retail distribution review (RDR) and the financial advice market review (FAMR). The reviews aim to improve consumer outcomes from financial advice and guidance. The FCA is reviewing their impact on the market to
date, and assessing how the market may develop in the future. The events are open to participants from regulated firms and invited stakeholders.
The FCA published a Dear CEO letter it sent to claims management companies
(CMCs) that are within the FCA's CMC temporary permission regime. The letter reminds CMCs of its expectations when acting for customers and/or carrying out financial promotions. The FCA reiterates in the letter its expectations, including reminders
about which claims management activities come under its regulation, that CMCs should always get letters of authority before acting for customers, and that financial promotions should be fair, clear and not misleading.
Britain's competition regulator announced it is investigating short-term
lender Non-Standard Finance (NSF)’s proposed £1.3bn ($1.64bn) hostile takeover of rival Provident Financial, citing concerns that jettisoning parts of its business could still reduce options for consumers who struggle to borrow cash from
mainstream lenders. The Competition and Markets Authority (CMA) also said it's accepting comments on the impact of the merger, which if approved would combine rivals and some of the UK’s largest home credit providers.
The CMA is investigating the potential acquisition
by OneSavings Bank PLC of Charter Court Financial Services Group PLC. The CMA is considering ‘whether it is or may be the case that the transaction, if carried into effect, will result in the creation of a relevant merger situation under the
merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services’. Comments
are sought by 19 June 2019. The anticipated deadline for the CMA’s phase 1 decision is 30 July 2019.
Banking Competition Remedies Ltd (BCR), the independent body established to implement the £775m Royal Bank of Scotland (RBS) State Aid Alternative Remedies Package, announced the opening of the second application window for the Incentivised Switching Scheme (ISS). The second application window is open to entities who meet the published criteria (which remain
unchanged) but are not yet part of ISS.
The board of the International Organization of Securities Commissions (IOSCO) and the FSB drafted reports that examine instances of financial activities where supervisory practices and regulatory policies may give rise to market fragmentation, ahead of
the G20 finance ministers and central bank governors meeting on 8-9 June 2019 in Fukuoka. The IOSCO report focuses
on market fragmentation in wholesale securities and derivatives markets that arises as an unintended consequence of financial regulation. The areas the FSB report examines are the trading and clearing of over-the-counter derivatives across borders; banks’ cross-border management of capital and liquidity; and the sharing of data and other information
The Committee on Payments and Market Infrastructures (CPMI) and IOSCO released a report in which they conclude that the
US legal, regulatory and oversight frameworks for systemically important payment systems, central security depositories (CSDs) and securities settlement systems (SSSs) are complete and consistent with the principles for financial market infrastructures
IOSCO issued a press release stating that its members met at IOSCO´s 44th Annual Meeting in Sydney in May
2019 to discuss priority issues facing securities market regulators and supervisors. The meeting, which was hosted by the Australian Securities and Investments Commission (ASIC), was attended by some 350 IOSCO members. Participants discussed different
aspects of IOSCO´s priority work, including cryptoassets, fintech, sustainability, data privacy, market fragmentation, asset management and retail distribution and digitalization. It also discussed technical assistance and capacity building.
The FSB published a new guide on overnight risk free rates (RFR) which outlines how such
rates are calculated and clarifies how the rates are used in cash products. In providing the guide, the FSB noted that it supports the development and adoption of the rates where appropriate, for example in business where term properties are not needed,
or where exposure to bank credit risk is not necessary or desirable, to enhance financial stability.
The PRA and the FCA published a statement in
which they set out some observations from their work to date on firms’ preparations for the transition from the London interbank offered rate (LIBOR) to RFRs, including key themes, good practice and next steps. The deputy governor for markets
& banking at the BoE, Dave Ramsden, discussed the findings at an event on ‘last orders’ for new exposures to LIBOR, in which he focused on sterling LIBOR and its successor, the sterling overnight index average (SONIA).
The FCA also published a feedback statement on its Dear CEO
letter on LIBOR transition.
The ECB calculated the spread between the euro short-term rate (€STR) and
the euro overnight index average (EONIA) at 0.085% (8.5 basis points). The spread is based on the methodology recommended by the working group on euro RFRs and adopted by the European Money Market Institute (EMMI) for the recalibration of the EONIA
methodology as of 2 October 2019 and until its discontinuation by EMMI.
EMMI adopted changes to the methodology for calculating
EONIA to ensure a smooth transition to €STR. On 31 May 2019 EMMI published the feedback summary. In view of the responses received, EMMI adopted the new methodology recommended by the working group, which will take effect on 2 October 2019.
The BoE’s Working group on sterling RFRs published its
newsletter for May 2019, with updates on RFR transition in sterling markets and others. The newsletter sets out milestone dates, market developments, official sector updates, key liquidity indicators and non-sterling RFR updates.
The Federal Reserve’s top official for supervision urged banks to take seriously the impending end of LIBOR and start preparing for it now, saying the biggest banks can expect to feel more pressure from the agency’s examiners to make sure
they’re ready. In pre-recorded remarks to a New York audience, Fed vice chairman
Randal Quarles said the financial industry already possesses the tools it needs to begin moving away from LIBOR, the troubled interest-rate benchmark that trillions of dollars of financial instruments are tied to but that UK regulators have pledged
to support only through the end of 2021.
The European Securities and Markets Authority (ESMA) published a
supervisory briefing to ensure compliance with the Regulation (EU) No 600/2014 (Markets in Financial Instruments Regulation (MiFIR)) pre-trade transparency requirements in commodity derivatives. The briefing was developed after ESMA became
aware that the provisions were not implemented in a consistent manner across the EU. It aims to increase supervisory convergence among national competent authorities (NCAs) in their implementation of the requirements, and to provide a common timetable
for the enforcement of the commodity derivatives pre-trade transparency regime, with the objective of ensuring a level playing field across EU trading venues.
ESMA launched a common supervisory
action (CSA) on the application of the requirements in Directive 2014/65/EU (the recast Markets in Financial Instruments Directive (MiFID II)) on the assessment of appropriateness. Participant NCAs will carry out the CSA simultaneously in
the second half of 2019.
ESMA issued the official translations
of its Guidelines on the application of C6 and C7 of Annex 1 of MiFID II. National competent authorities to which these Guidelines apply must now notify ESMA whether they comply or intend to comply with the Guidelines, within two months.
ESMA updated its Q&As on transparency issues under MiFID II
and MiFIR. The updated Q&As are on the mandatory systematic internaliser (SI) regime, the voluntary SI regime, and the quoting obligation for SIs in non-trading on a trading venue (non-TOTV) instruments.
A corrigendum to Commission Delegated Regulation
(EU) 2018/815 of 17 December 2018 supplementing the Transparency Directive 2004/109/EC with regard to regulatory technical standards (RTS) on the specification of a single electronic reporting format was published in the Official Journal
of the EU.
The FCA published PS19/12 setting out the near-final
rules on the changes the FCA plans to make to the Handbook to align it with the Prospectus Regulation. It also summarises the feedback received to the consultation paper (CP19/6) and the FCA's response. The consultation closed on 28 March 2019.
The CPMI and IOSCO published a discussion paper on central counterparty (CCP) default management auctions. Comments should
be submitted by 9 August 2019. A default management auction is one of the tools that a CCP may use to transfer a defaulting participant's positions to a non-defaulting participant, thereby restoring the CCP to a matched book.
Several trade associations sent a joint letter to
US regulators asking them to provide clarification that covered swap entities and their counterparties which will become subject to the initial margin (IM) requirements of the margin and capital requirements for covered swap entities or the margin
requirements for uncleared swaps for swap dealers and major swap participants as of 1 September 2019 (Phase IV) and on or after 1 September 2020 (Phase V) do not need to comply with the specified documentation requirements unless the bilateral IM
amount exceeds $50m.
The BoE released Staff Working Paper No 800, which discusses the topic of clearing fragmentation. The paper contends that fragmenting clearing
across multiple CCPs is costly, as dealers providing liquidity on a global scale cannot net trades cleared in different CCPs, increasing their financial costs, which in turn are passed on to their clients through price distortions. Using proprietary
data, the authors of the paper provide an economically significant CCP basis for dollar swap contracts cleared at both the Chicago Mercantile Exchange and the London Clearing House. They provide empirical evidence consistent with a collateral cost
explanation of this basis.
The Council of the EU published an ‘I/A’ item note inviting the Council to
adopt a directive amending Directive 2009/65/EC (the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive) and Directive 2011/61/EU (the Alternative Investment Fund Managers Directive (AIFMD)) with
regard to cross-border distribution of collective investment undertakings. It also published an ‘I/A’ item note inviting
the Council to adopt a regulation on facilitating cross-border distribution of collective investment undertakings and amending Regulation (EU) 345/2013 (the European Venture Capital Funds (EuVECA) Regulation), Regulation (EU) 346/2013 (the
European Social Entrepreneurship Funds (EuSEF) Regulation) and Regulation (EU) 1286/2014 (the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation).
ESMA updated its Q&As on the application of the AIFMD and the
The FCA published a
PS19/13 following CP19/7 on proposals to implement requirements of the revised Shareholder Rights Directive (SRD II) and improve shareholder engagement. The policy statement summarises the feedback the FCA received to the consultation—which
closed on 27 March 2019—and the FCA’s response to it. It also sets out the final rules.
The FCA published an update following the announcement on 3 June 2019 that dealing
in the units of the LF Woodford Equity Income Fund (the Fund) were suspended. The FCA’s statement provides additional information about the purpose of suspension, the FCA's role, and addresses commentary around the decision to list some of the
Fund’s assets in Guernsey.
A leading UK pensions association called on the FCA to investigate
the lack of transparency around fund managers’ voting polices—particularly around climate change, executive pay and gender diversity—complaining of ‘opacity and lack of comparability’. The Association of Member Nominated
Trustees (AMNT)—which represents UK pension schemes—said a review of fund manager voting policies found poor transparency and accountability that is preventing pension scheme trustees from operating a stewardship policy on the environmental,
social and governance (ESG) of the companies in which they invest via fund managers.
The FSB published a discussion
paper for public consultation on public disclosure of resolution planning and resolvability. The discussion paper explores 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). The FSB also published a discussion paper on solvent wind-down of derivatives and trading portfolios by G-SIBs. The discussion paper sets out considerations that may be relevant for authorities and firms for
both recovery and resolution planning.
The Presidency of the Council of the European Union published a progress report on banking
union for the permanent representatives committee (COREPER). It invites COREPER to suggest that the Council endorse the
report. The report addresses progress on risk reduction measures and the establishment of the European deposit insurance scheme (EDIS). The report is designed to facilitate the task of the incoming Presidency.
The European Commission published a letter of
23 May 2019 agreeing to a six-month extension of the timetable for delivery of the EBA’s advice for the purposes of a benchmarking of national loan enforcement frameworks (including insolvency frameworks) from a bank creditor perspective.
BCR, the independent body established to implement the £775m RBS State Aid Alternative Remedies Package, announced the opening of the second application window for the ISS. The second application window is open to entities who meet the published criteria (which remain unchanged) but are not yet part of ISS.
UK Asset Resolution Limited (UKAR), which incorporates Bradford & Bingley plc (B&B) and NRAM Ltd (NRAM) issued its
results for the year ended 31 March 2019. UKAR says its mission is to maximise value for the taxpayer, whilst serving its customers well and treating all its stakeholders fairly. Since formation in 2010 UKAR says it made significant progress and after
the year end all outstanding B&B and NRAM government loans from HM Treasury were repaid, enabling it to move to the final stage of achieving its overarching objective of disposing of the government’s investments in both companies.
A London judge dismissed a claim brought by a developer seeking to compel Bank of Cyprus to write off his outstanding loans, concluding that the alleged written agreement on which the suit was based was not genuine or binding. Property developer Phytos
Stavrinides and two of his companies will need to pay Bank of Cyprus £5.5m in overdue loan repayments, after Judge John Kimbell dismissed their claim at the High Court. For the full judgment, see: Stavrinides and others v Bank of Cyprus Public Co Ltd
 EWHC 1328 (Ch).
In Michel Schyns v Belfius Banque SA Case (C 58/18) EU:C:2019:120, Advocate General Kokott was asked to clarify the relationship between different pre-contractual obligations on the creditor under the Consumer Credit Directive (Directive 2008/48/EC) (CCD).
In particular, following a referral from a Belgian court, the specific points at issue were, first, the extent of the pre-contractual obligation to provide explanations under Article 5(6) of the CCD and, second, the potential importance of the assessment
of the creditworthiness of the consumer provided for in Article 8 of the CCD for the conclusion of the agreement.
The Treasury Committee published correspondence with the FOS on the FOS’s approach to dealing with mortgage prisoner complaints. The FOS identifies three groups of mortgage prisoners but does not put forward a specific mortgage prisoner category within its data. The
FOS says that it is not possible to provide an exact figure for mortgage prisoner complaints, but that over the last six financial years the FOS received between 9,000 and 12,500 complaints each year in total about mortgages across a wide range of
issues and mortgage prisoner cases make up a small proportion of those.
The European Insurance and Occupational Pensions Authority (EIOPA) launched a
consultation on a draft opinion on sustainability within Solvency II. The draft opinion forms part of EIOPA's strategic activities on sustainable finance and follows a call for opinion from the European Commission. Feedback is sought by 26 July 2019.
EIOPA says it will consider the responses it receives to the consultation and finalise the opinion for submission to the EU institutions by 30 September 2019.
The ‘I/A’ item note states that on 16 April 2019, the European Parliament adopted
its position at first reading on the European Commission’s proposal. The outcome of voting in the European Parliament reflects the compromise agreement reached between the institutions and should, therefore, be acceptable to the Council. However,
statements from the Czech Republic and the Netherlands show some resistance to the proposal.
The Money and Pensions Service appointed Chris
Curry as principal of the Pensions Dashboard Industry Delivery Group. Pensions dashboards aim to ensure people get easy access to key information about what pensions they are entitled to, who manages them and what they are worth, ‘revolutionising
how people engage with their pensions throughout their lives’.
A leading UK pensions association called on the FCA to investigate
the lack of transparency around fund managers’ voting polices—particularly around climate change, executive pay and gender diversity—complaining of ‘opacity and lack of comparability’. The AMNT—which represents
UK pension schemes—said a review of fund manager voting policies found poor transparency and accountability that is preventing pension scheme trustees from operating a stewardship policy on the ESG of the companies in which they invest via fund
The Payment Systems Regulator (PSR) published Specific Direction 9 requiring
Visa Europe to review and adopt appropriate incident communication strategy and response plans. The Direction is intended to make sure Visa does all it can to ensure its participants, service users and other stakeholders are given enough information,
in case any future incident occurs where Visa's services are unexpectedly unavailable. The PSR also published responses to its consultation on the Direction.
The PSR published an open letter to Pay.UK Limited (the body that currently
operates important payment systems, including Bacs and Faster Payments). The open letter sets out the PSR’s thinking about potential risks and issues in relation to its statutory objectives—in particular, competition and innovation—which
could arise from potential outcomes of Pay.UK’s procurement process for the New Payment Architecture central infrastructure services.
The FCA published Handbook Notice No. 66, which includes changes to chapter 16 of the Supervision
Manual (SUP) in the FCA Handbook made by the FCA board on 30 May 2019 to ensure the accuracy of capital adequacy reporting. It also includes feedback on the Quarterly Consultation Paper No 22 (CP18/24).
The BoE published a speech by its
executive director for banking, payments and innovation, Victoria Cleland, at the European Women Payments Network annual conference in Amsterdam. Ms Cleland reflected on the importance of having a diverse workforce, and the benefits of having a diverse
The FSB published a report on crypto-assets, which considers work under
way, regulatory approaches and potential gaps. The report is being delivered to G20 Finance Ministers and Central Bank Governors for their meeting in Fukuoka, Japan on 8-9 June 2019. It recommends that the G20 keep the topic of regulatory approaches
and potential gaps, including the question of whether more coordination is needed, under review.
The ECB and the Bank of Japan (BoJ) jointly published the results of phase
3 of Project Stella, their joint research project which has contributed to the ongoing debate surrounding the emergence of distributed ledger technologies (DLT) and its potential use in the future for financial market infrastructures which support
payments and securities settlement. Phase 3, ‘Synchronised cross-border payments’, builds on the insights gained from the previous two phases to bring the research into the broader sphere of cross border payments.
The FCA published a speech by its director of innovation, Nick Cook, on the role of innovation
in financial services and in the FCA itself, in which he said the regulator wants to help create a culture where innovation and new ways of approaching old problems are considered business as usual, rather than being undertaken in a ring-fenced or
siloed function unique and distinct from the organisation that it sits in.
The BoE published a speech delivered by its
executive director of UK deposit takers supervision, James Proudman, at the FCA conference on governance in banking, in which he looked at the rise of artificial intelligence (AI) in financial firms. The speech looked at a number of challenges for
boards raised by AI and its governance. Mr Proudman noted that the introduction of AI and machine learning poses significant challenges around the proper use of data, and said boards should attach priority to its modelling and testing.
Fintech associations in Singapore, Hong Kong and Japan joined forces to launch the Asia-Pacific
(APAC) Regtech Network, aimed at combating financial crime and promoting the implementation of technology to streamline regulatory processes. The APAC Regtech Network is comprised of the regtech committees of the Singapore Fintech Association, the
Fintech Association of Japan and the Fintech Association of Hong Kong, and will hold regular meetings to address central issues in regulatory technology, according to a video posted by the Asia Capital Markets Institute announcing the initiative.
The FSB’s Task Force on Climate-related Financial Disclosures (TCFD) published its 2019 status report. The report provides an overview of the extent to which companies in their 2018 reports included information aligned with the core TCFD recommendations published
in June 2017. The report finds encouraging progress on climate-related financial disclosure, but also a need for further progress to consider financial risks.
The Growth and Emerging Market Committee (GEMC) of IOSCO published a report: Sustainable finance in emerging markets
and the role of securities regulators. It provides 10 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments. Among other things, the recommendations include
requirements for reporting and disclosure of material ESG specific risks, aimed at enhancing transparency.
EIOPA launched a consultation on a draft
opinion on sustainability within Solvency II. The draft opinion forms part of EIOPA's strategic activities on sustainable finance and follows a call for opinion from the European Commission. Feedback is sought by 26 July 2019. EIOPA says it will consider
the responses it receives to the consultation and finalise the opinion for submission to the EU institutions by 30 September 2019.
The Treasury Committee launched an
inquiry into the decarbonisation of the UK economy and green finance. The inquiry will scrutinise the role of HM Treasury, regulators and financial services firms in supporting the government’s climate change commitments, and examine the economic
potential of decarbonisation for the UK economy. The inquiry aims to consider how to leverage the opportunities for the UK to lead the way in green finance and environmental innovation, and to ensure that the UK’s climate policies are effectively
The Islamic Financial Services Board (IFSB) published its 10th research (WP-10) in the IFSB Working Paper series which explores the
risk-sharing practices in the Islamic banking sector. This working paper describes the views of both Islamic banks and regulatory and supervisory authorities on the practices of Islamic banks in IFSB member jurisdictions. This is in relation to the
governance rights of unrestricted profit-sharing investment account (UPSIA) holders, as well as likely reasons that may account for the limited usage of equity-based contracts (such as muḍārabah and mushārakah) especially on the asset side of the
balance sheet of Islamic banks.
The IFSB issued a working paper which explores the inter-sectoral linkages within the Islamic financial
services industry (IFSI) and between IFSI and the real sector via a financial network analysis. The paper extracted Islamic banking balance sheet data covering 2013 to 2017 from the IFSB Prudential and Structural Islamic Financial Indicators (PISIFIs)
database to generate a bilateral exposure adjacency matrix that indicates assets and liabilities across sectors of the IFSI and the real economy.
The IFSB announced that the 14th edition of the IFSB Global Summit will be held from 12 to 14 November
2019 in Jakarta, Indonesia. Bank Indonesia is hosting the Summit, in conjunction with the Indonesia Sharia Economic Festival (ISEF) which will be held on 12 to 15 November 2019. A MoU was signed by Bank Indonesia and the IFSB which signifies the collaboration
and commitment of both parties in ensuring the success of this landmark event.
6 June 2019
European regulator updates
Regulatory fees and levies
The deadline for feedback to the ECB’s
consultation on proposed changes to the ECB Regulation on supervisory fees is 6 June 2019.
The deadline for applications to be appointed as a member of the Administrative
Board of Review of the ECB is 6 June 2019.
The FSB, G20 Finance Ministers and Central Bank Governors will meet in
Fukuoka, Japan on 8-9 June.
Financial market infrastructure
The deadline for feedback to BoE ‘CP: Fees regime for financial market infrastructure supervision 2019/20 and other related policy changes’
is 10 June 2019.
The deadline for responses to HM Treasury’s
consultation on the transposition of the Fifth Money Laundering Directive (MLD5) is 10 June 2019.
Deadline for Member States to implement SRD II.
The Proxy Advisors (Shareholders’ Rights) Regulations 2019 will enter into force on 10
Mortgages and home finance
The next edition of the FCA and PRA mortgage lending statistics will be published on 11 June 2019.
As part of its live and local series the FCA will host its ‘Ask the regulator’ Q&A roundtable
discussion with FCA and industry panel on 11 June 2019 in Leeds.
Commission Delegated Regulation (EU) 2019/819 supplementing
the EuSEF Regulation with regard to conflicts of interest, social impact measurement and information to investors in the area of European social entrepreneurship funds will enter into force on 11 June 2019.
Commission Delegated Regulation (EU) 2019/820 supplementing
the EuVECA Regulation with regard to conflicts of interest in the area of European venture capital funds will enter into force on 11 June 2019.
As part of its live and local series the FCA will host its ‘Regulatory update focusing on the extension of the SM&CR and the Insurance Distribution Directive’ Workshop in Basingstoke on 11 June 2019.
According to its administrative timetable the
CMA statutory deadline for implementing remedial action (following its final report on its market investigation of investment consultancy and fiduciary management services) is 11 June 2019.
As part of its consultation ‘CP10/19: Enforcement: Changes to the PRA’s settlement policy consultation paper’
the PRA will host a roundtable event for law firms working in this area on 11 June 2019.
Markets and trading
The deadline for feedback to the ECB’s working group on
euro RFRs public consultation on its draft recommendations to address the legal implications for new and legacy contracts referencing EONIA as a result of the proposed transition from EONIA to €STR is 12 June 2019.
Payment systems and services
PRA Pillar 2
The deadline for responses to
the PRA’s CP5/19, in which it proposes to update the Pillar 2 capital framework to reflect continued refinements and developments in setting the PRA buffer (also referred to as Pillar 2B) is 13 June 2019.
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