FS weekly highlights—8 August 2019

In this issue

 

Brexit news
UK, EU and international regulators and bodies
Authorisation, approval and supervision
Prudential requirements
Financial crime
Crowdfunding
Consumer protection and claims management regulation
Enforcement and redress
Markets and trading
MiFID II
Regulation of capital markets and Capital Markets Union
Regulation of derivatives
Investment funds and asset management
Banks and mutuals
Consumer credit, mortgage and home finance
Regulation of insurance
Regulation of personal pension and stakeholder products
Payment services and systems
Fintech and cryptoassets
Sustainable finance
Dates for your diary

 

Brexit news

 

FCA issues amended Brexit directions for e-money and payment firms

The Financial Conduct Authority (FCA) issued two amended directions under the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018. The amended directions extend the deadline for electronic money institutions and payment service providers to submit notifications to the FCA under the temporary permissions regime (TPR), in preparation for a no-deal Brexit, to 30 October 2019. The amended directions are:

Amended direction regulation 2018: notification before exit day (e-money)

Amended direction regulation 2018: notification before exit day (payments)

Commission publishes letter on impact of UK withdrawal from MiFID II framework on RTS 2 phase-in schedules

The Council of the European Union published a letter from Olivier Guersent, Director-General of the European Commission, to Steven Maijoor, Chair of ESMA, regarding the Regulatory Technical Standards (RTS) 2 annual review report. Guersent calls for ESMA to undertake the review of the non-equity transparency provisions, necessary for contingency planning for a withdrawal of the UK from the MiFID II framework, as a matter of urgency. 

 

Back to top of page

 

UK, EU and international regulators and bodies

 

ESMA seeks data experts for new industry advisory group

The European Securities and Markets Authority (ESMA) issued a call for candidates for its newly-established Data Advisory Group. It is seeking individuals with expertise on issues related to market data regulatory reporting and record keeping of derivative contracts, positions, transactions in financial instruments (including securities financing), order book, instrument reference data, investment funds and prospectus data. Applications from interested candidates should be submitted to ESMA by 16 September 2019.

Treasury Committee—firms are gaming the FCA’s perimeter of regulation

The Treasury Committee published a report on the FCA’s perimeter of regulation, which expresses concerns about the complexity of the perimeter and the grey area at its edge. The report follows on from the Committee’s recent work on a number of topics that exist in this grey area, including SME lending (eg RBS’ Global Restructuring Group), mortgage prisoners, mini bonds (eg London Capital and Finance) and crypto-assets, and from the FCA’s Perimeter report 2018–19, published on 19 June 2019.

FCA publishes August policy development update

The FCA published its latest policy development update, current as of 2 August 2019. The policy development update provides some information on the FCA’s recent and upcoming publications but should not be regarded as comprehensive.

FCA publishes non-legal changes document

The FCA published a list of non-legal corrections and clarifications in the FCA Handbook. The document lists the minor corrections and clarifications that the FCA made to the Handbook. These changes are regarded as having no legal effect. None of these changes represents a change in policy.

Dame Jayne-Anne Gadhia to withdraw from external appointment to FPC

HM Treasury confirmed that Dame Jayne-Anne Gadhia will not be taking up her external appointment to the Bank of England’s (BoE) Financial Policy Committee (FPC), which she was due to begin in April 2020. It said the BoE and Dame Jayne-Anne agreed that her recent appointment to an executive position at Salesforce UK meant she would not be able to commit the necessary time required to serve on the FPC. 

 

Back to top of page

 

Authorisation, approval and supervision

 

FCA updates SM&CR information for solo-regulated firms

The FCA updated the information provided on its website for FCA solo-regulated firms that will become subject to the Senior Managers and Certification Regime (SM&CR) on 9 December 2019.

FCA publishes SM&CR banking stocktake report

The FCA published the findings of its review into the embedding of the SM&CR in the banking sector. The FCA carried out the review because it wanted to better understand how the SM&CR is embedded in the banking sector, following three years since it was introduced. The FCA was interested to understand whether there are any issues that warrant more focus from firms and the FCA. This is not a full post-implementation review and the FCA does not propose to make any policy changes based on it.

FCA Podcast on Culture and SM&CR

The FCA published an ‘Inside FCA Podcast’ in which Jonathan Davidson, FCA Executive Director of Supervision, Retail and Authorisations, and Dame Jayne Anne Gadhia, former Chief Executive of Virgin Money, discuss the FCA’s work to improve culture in financial services and the SM&CR. 

 

Back to top of page

 

Prudential requirements

 

ESRB decision postponing due date of reports on countercyclical capital buffer rates and voluntary reciprocity published in OJ

Decision ESRB/2019/15 of the European Systemic Risk Board (ESRB) of 28 June 2019 on the postponement of certain reports on actions and measures taken pursuant to Recommendation ESRB/2014/1 and Recommendation ESRB/2015/2 was published in the Official Journal of the EU (OJ). Recommendation ESRB/2014/1 established a common approach to setting the countercyclical capital buffer under the Capital Requirements Directive 2013/36/EU (CRD IV), and Recommendation ESRB/2015/2 set out a framework on voluntary reciprocity for macroprudential policy measure.

PRA publishes 'PS16/19—Regulatory reporting—EBA Taxonomy 2.9'

The Prudential Regulation Authority (PRA) published policy statement (PS)16/19 following consultation paper (CP)19/18 ‘Regulatory reporting: European Banking Authority Taxonomy 2.9’. It sets out the final rules updating the PRA reporting requirements for ring-fenced bank reporting, Capital+ reporting and the scope of Financial Reporting (FINREP) to be reported by certain firms that are not currently required under the Capital Requirements Regulation (EU) 575/2013 (CRR) to report FINREP. Following PS16/19, the PRA updated supervisory statement (SS)34/15 ‘Guidelines for completing regulatory reports’.

Commission calls for further technical advice on Basel III implementation

The Commission published a letter to the European Banking Authority (EBA) calling for further technical advice on the implementation of the final Basel III reforms. The Commission made an earlier call for technical advice on Basel III in May 2018.

EBA publishes advice to the European Commission on the implementation of the final Basel III framework

The EBA published its advice contained in four policy advice reports on the implementation of Basel III in the EU, which includes a quantitative analysis of the estimated impact based on data from 189 banks, and a set of policy recommendations. This work responds to a Commission's call for advice. The EBA supports the full implementation of the final Basel III standards, which will contribute to the credibility of the EU banking sector and ensure a well-functioning global banking market. The documents published were:

Basel III reforms: Impact study and key recommendations

Policy advice on Basel III reforms on securities financing transactions (SFTs)

Policy advice on the Basel III reforms: Operational risk

Policy advice on the Basel III reforms: Output floor

Policy advice on the Basel III reforms: Credit risk

EBA updates guidance on Q&A process

The EBA issued an updated version of the guidance on its Q&A process. The update reflects the inclusion of the EU banking reform package amendments to CRD IV, the CRR and the Bank Recovery and Resolution Directive 2014/59/EU (BRRD) in the scope of the Q&A process.

EBA publishes findings from review of Single Rulebook Q&A use, usefulness and implementation

The EBA published an overview of the findings from its review of the use, usefulness and implementation of the Single Rulebook Questions and Answers (Q&A) that provide common answers to stakeholders’ questions on the EU regulatory framework. The review, which focused on final Q&A relating to the CRR and the CRD, found that, overall, competent authorities (CAs) and institutions were satisfied with the utility of the Single Rulebook Q&A tool and its answers but had important and sometimes far-reaching suggestions for improvement.

AFME publishes pre-CRR3 position paper on sustainable finance

The Association for Financial Markets in Europe (AFME) published a ‘Pre-CRR3 position paper’ on sustainable finance. The paper reflects on the European Commission’s Action Plan on financing sustainable growth and its interaction with prudential regulation in the context of Regulation (EU) 2019/876 (CRR2), and sets out AFME’s views including its expectation that the EU’s commitment to sustainability may continue to be considered in future changes to the Capital Requirements Regulation (referred to as CRR3).

Central Bank of Ireland reciprocates French measure lowering large exposure limit under CRR

The Council of the EU published a notification by the Central Bank of Ireland in which it informs the European institutions that it decided voluntarily to reciprocate the French measure made under Article 458 of the CRR and set out in the ESRB Recommendation ESRB/2018/8. The French measure lowered the limit for large exposures for French global systemically important institutions and other systemically important institutions in respect of their exposures to French non-financial corporations (NFCs) that are ‘highly indebted’.

European Central Bank responds to bailout of Banca Monte Paschi

Andrea Enria, Chair of the European Central Bank’s (ECB) Supervisory Board, responded to a written question from Markus Ferber, MEP, regarding the bailout of Banca Monte Paschi. Ferber questioned when the ECB first learned about the bank’s solvency issues, how it justified the bailout in 2017 despite the bank’s precarious financial position and whether there was any pressure from a political or central bank level to come to a different conclusion. 

 

Back to top of page

 

Financial crime

 

FATF publishes global AML/CTF ratings

The Financial Action Task Force (FATF) published an updated overview of the anti-money laundering (AML)/counter-terrorist financing (CTF) ratings of the 205 jurisdictions that committed to implementing the FATF Recommendations.

Millions of pension savers could put their retirement savings at risk to scammers

The FCA and The Pensions Regulator are joining forces again this summer to warn the public about fraudsters targeting people’s retirement savings. The warning comes as new research suggests that 42% of pension savers, which would equate to over five million people across the UK, could be at risk of falling for at least one of six common tactics used by pension scammers.

Corporate co-operation guidance added to SFO's Operational Handbook

The Serious Fraud Office (SFO) updated its operational handbook with a chapter on 'Corporate Co-operation Guidance'. The guidance is intended to assist organisations in understanding what will be expected of them in order for their work to count as co-operation for the purposes of a deferred prosecution agreement.

Corporate Transparency and Register Reform—City of London Law Society response

The Company Law and Financial Law Committees of the City of London Law Society submitted a joint response to the Department for Business, Energy and Industrial Strategy (BEIS) consultation on Corporate Transparency and Registration Reform.

Anderson and others v Sense Network Ltd

The claimants, alleged victims of a fraudulent Ponzi scheme, failed in their claims against the defendant company for which the company of the scheme's mastermind became an appointed representative under the Financial Services and Markets Act 2000. The Court of Appeal, Civil Division, in agreement with the Commercial Court, dismissed claims based on s 39 of the Financial Services and Markets Act 2000, ostensible and actual authority, and breach of the supervisory duties. 

 

Back to top of page

 

Crowdfunding

 

TISA publishes guidance on implementation of the appropriateness test by P2P platforms

The Investing and Saving Alliance (TISA) published Peer-to-peer Lending: approach to implementation of the appropriateness test, which sets out a recommended approach to assessing whether a peer-to-peer (P2P) agreement or portfolio is appropriate for a client. Firms will be required to make this assessment from 9 December 2019, when the amendments to COBS 10 set out in FCA Policy Statement 19/14 Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms—Feedback to CP18/20 and final rules (PS19/14), take effect.

 

Back to top of page

 

Consumer protection and claims management regulation

 

UK competition policy: CMA and FCA agree amended MoUs on competition powers and consumer protection

On 7 August 2019, the CMA published the updated versions of its memorandums of understanding (MoUs) with the FCA in relation to their concurrent competition powers and their consumer protection powers in the financial services sector. The MoUs were amended on 7 August 2019 to reflect the changes introduced by the Financial Guidance and Claims Act 2018, which extended FCA’s concurrent competition powers to include the provision of claims management services in Great Britain. 

 

Back to top of page

 

Enforcement and redress

 

The FCA announces August and September information events for former members of the British Steel Pension Scheme

The FCA will hold information sessions for former members of the British Steel Pension Scheme (BSPS) on Wednesday 21 August and Thursday 5 September 2019. These events are aimed at former members of BSPS who transferred out of the BSPS and who potentially received unsuitable pensions transfer advice in connection with such transfers.

New FOS webpages for consumer complaints and information for businesses on home credit, guarantor loans, unaffordable lending and financial difficulties

The Financial Ombudsman Service (FOS) published new webpages providing information for consumers with complaints relating to home credit, guarantor loans and financial difficulties. The webpages address how the FOS handles such complaints, the most common areas for complaint, and how customers can complain. The FOS updated its unaffordable lending and guarantor loans webpages for businesses covered by FOS’ compulsory or voluntary jurisdictions.

Complaints Commission criticises FCA’s ‘substantive failures’ in supervising regulated firm

The Complaints Commission (CC) upheld a complaint against the FCA regarding the FCA’s supervision of a regulated firm. In its final report, the CC criticises the FCA’s persistent and ‘substantive failures’—and the failures of its predecessor, the Financial Services Authority —and recommends that the FCA offers the firm a compensatory payment of £1,500 plus a further £250 for shortcomings in handling the complaint. In its response, the FCA confirmed it accepted and acted on the CC’s recommendations.

Upper Tribunal finds FCA decision to cancel Part 4a permission ‘reasonable’

In North London Van Centre Ltd v The Financial Conduct Authority [2019] UKUT 0233 (TCC), the Upper Tribunal (Tax and Chancery Chamber) considered a decision by the FCA to cancel North London Van Centre Ltd’s (NLVC) Part 4A permission under the Financial Services and Markets Act 2000 (FSMA 2000). The FCA determined that NLVC was failing to satisfy the ‘suitability’ threshold condition set out in FSMA 2000, largely due to consistent failures by NLVC to comply (on time or at all) with reporting requirements. The Tribunal concluded that the FCA’s decision was within ‘the bounds of reasonable decisions’ and dismissed NLVC’s reference of the decision to the Tribunal.

FCA probes securities firm amid ‘serious concerns’

The FCA said that it opened a regulatory investigation into collapsed stockbroker SVS Securities, after it identified ‘serious concerns’ about the way the business was operating. 

 

Back to top of page

 

Markets and trading

 

FCA research note on resilience of liquidity provision in ETF primary markets

The FCA published research note ‘Fixed income exchange-traded funds (ETFs)—primary market participation and resilience of liquidity during periods of stress’. The authors conclude that ETF primary markets are highly concentrated, particularly for fixed income ETFs, where concerns about ‘liquidity mismatch’ were raised. However, preliminary analysis of stress events provides some evidence that alternative liquidity providers ’step in’ during times of market disruption. The authors do not observe other immediate features of participation that raise concerns about financial stability.

The FCA publishes Market Watch 60 on controlling access to inside information

The FCA published Market Watch 60, its newsletter on market conduct and transaction reporting issues. This edition contains information about controlling the access to inside information, findings of the FCA’s review and summary and key recommendations.

ISDA-AFME publish feedback on interim TEG report on Climate Benchmarks and Benchmarks’ ESG disclosures

The International Swaps and Derivatives Association (ISDA) and AFME published feedback on the interim report on Climate Benchmarks and Benchmarks’ ESG disclosures by the EU Technical Expert Group (TEG) on Sustainable Finance.

BoE working group publishes responses to discussion paper on referencing SONIA in new contracts

The BoE published the Working Group on Sterling Risk-Free Reference Rates statement and aggregated summary of responses to the March 2019 discussion paper on sterling overnight interbank average rate (SONIA) conventions and referencing SONIA in new contracts. The discussion paper captured the most significant conventions identified at the time by the working group. Responses will be discussed in the working group’s forthcoming meetings. 

 

Back to top of page

 

MiFID II

 

The Investment Association publishes guide on MiFID II product governance and information flows

The Investment Association (IA) published a guide on the provision of information required to meet the investment product manufacturer’s regular product review obligation under the revised Markets in Financial Instruments Directive (MiFID II).

ESMA publishes quarterly liquidity assessment for bonds subject to MiFID II transparency requirements

ESMA started to make available quarterly liquidity assessments for bonds available for trading on EU trading venues. For the period covered by the assessment published today, there are 594 bonds which are deemed liquid and are therefore subject to MiFID II transparency requirements from 16 August to 15 November 2019.

ESMA publishes data for SI calculations for equity and bonds

ESMA published data for the systematic internaliser (SI) calculations for equity, equity-like instruments and bonds required to be made under MiFID II and MiFIR. The data comprises the total number of trades and total volume over the period January–June 2019 for 22,961 equity and equity-like instruments and 333,459 bonds.

Commission publishes letter on impact of UK withdrawal from MiFID II framework on RTS 2 phase-in schedules

The Council of the European Union published a letter from Olivier Guersent, Director-General of the European Commission, to Steven Maijoor, Chair of ESMA, regarding the RTS 2 annual review report. Guersent calls for ESMA to undertake the review of the non-equity transparency provisions, necessary for contingency planning for a withdrawal of the UK from the MiFID II framework, as a matter of urgency. 

 

Back to top of page

 

Regulation of capital markets and Capital Markets Union

 

ESMA publishes quarterly liquidity assessment for bonds subject to MiFID II transparency requirements

ESMA started to make available quarterly liquidity assessments for bonds available for trading on EU trading venues. For the period covered by the assessment published today, there are 594 bonds which are deemed liquid and are therefore subject to MiFID II transparency requirements from 16 August to 15 November 2019.

ESMA publishes data for SI calculations for equity and bonds

ESMA published data for the SI calculations for equity, equity-like instruments and bonds required to be made under MiFID II and MiFIR. The data comprises the total number of trades and total volume over the period January–June 2019 for 22,961 equity and equity-like instruments and 333,459 bonds. 

 

Back to top of page

 

Regulation of derivatives

 

ISDA launches member surveys as its review of post-trade services begins

ISDA launched three targeted surveys to gather member feedback in the key areas of collateral management, legal documentation and post-trade services and processes. The surveys are part of a major initiative to drive efficiencies in post-trade services, with the aim of identifying opportunities for greater automation, reduced operational risk and lower costs. The surveys close on 5 September 2019.

ESMA ceases renewal of temporary product intervention measures relating to contracts for differences

ESMA announced that it will not renew its temporary restriction on the marketing, distribution or sale of contracts for differences to retail clients in the EU. ESMA found that most national regulators took permanent national measures that are at least as stringent as ESMA’s measures.

BoE working group publishes responses to discussion paper on referencing SONIA in new contracts

The BoE published the Working Group on Sterling Risk-Free Reference Rates statement and aggregated summary of responses to the March 2019 discussion paper on SONIA conventions and referencing SONIA in new contracts. The discussion paper captured the most significant conventions identified at the time by the working group. Responses will be discussed in the working group’s forthcoming meetings. 

 

Back to top of page

 

Investment funds and asset management

 

The Investment Association publishes guide on MiFID II product governance and information flows

The Investment Association (IA) published a guide on the provision of information required to meet the investment product manufacturer’s regular product review obligation under the revised Markets in Financial Instruments Directive (MiFID II).

The Investment Association publishes the UK Funds Regime Working Group’s final report to HM Treasury Asset Management Taskforce

The UK Funds Regime Working Group (UKFRWG)’s final report to the HM Treasury Asset Management Taskforce (Taskforce) was published by the Investment Association. The report sets out UKFRWG’s proposals, including details of a proposed UK Long-Term Asset Fund and an Onshore Professional Fund. It is also looking at how capital and income are treated within UK funds, as well as innovation, optimisation and promotion.

FCA research note on resilience of liquidity provision in ETF primary markets

The FCA published research note ‘Fixed income exchange-traded funds (ETFs)—primary market participation and resilience of liquidity during periods of stress’. The authors conclude that ETF primary markets are highly concentrated, particularly for fixed income ETFs, where concerns about ‘liquidity mismatch’ were raised. However, preliminary analysis of stress events provides some evidence that alternative liquidity providers ’step in’ during times of market disruption. The authors do not observe other immediate features of participation that raise concerns about financial stability.

FCA advocates establishing a different, not higher, liquidity standard for UCITS

The FCA published the response of Andrew Bailey, Chief Executive of the FCA, to a written question of 19 July 2019 from Lord Myners, regarding the case for the UK establishing its own requirements for liquidity standards for undertakings for collective investment in transferable securities (UCITS) at higher levels than specified by EU Directives. Bailey explains there are significant drawbacks to this approach and there is merit in considering a different rather than higher UCITS standard which is based on a purposive test of liquid status supported with requirements around governance and systems and controls.

ESAs address Commission on the exclusion of performance scenarios options from PRIIPs consumer testing exercise

EIOPA published a letter from the European Supervisory Authorities (ESAs) to Olivier Guersent, Director General of the European Commission, on the exclusion of performance scenarios options from a packaged retail investment products (PRIIPs) consumer testing exercise.

 

Back to top of page

 

Banks and mutuals

 

EBA publishes advice to the European Commission on the implementation of the final Basel III framework

The EBA published its advice contained in four policy advice reports on the implementation of Basel III in the EU, which includes a quantitative analysis of the estimated impact based on data from 189 banks, and a set of policy recommendations. This work responds to a Commission's call for advice. The EBA supports the full implementation of the final Basel III standards, which will contribute to the credibility of the EU banking sector and ensure a well-functioning global banking market. The documents published were:

Basel III reforms: Impact study and key recommendations

Policy advice on Basel III reforms on securities financing transactions (SFTs)

Policy advice on the Basel III reforms: Operational risk

Policy advice on the Basel III reforms: Output floor

Policy advice on the Basel III reforms: Credit risk

EBA updates guidance on Q&A process

The EBA issued an updated version of the guidance on its Q&A process. The update reflects the inclusion of the EU banking reform package amendments to CRD IV, the CRR and the Bank Recovery and Resolution Directive 2014/59/EU (BRRD) in the scope of the Q&A process.

PRA publishes 'PS16/19—Regulatory reporting—EBA Taxonomy 2.9'

The PRA published PS16/19 following CP19/18 ‘Regulatory reporting: European Banking Authority Taxonomy 2.9’. It sets out the final rules updating the PRA reporting requirements for ring-fenced bank reporting, Capital+ reporting and the scope of FINREP to be reported by certain firms that are not currently required under the CRR to report FINREP. Following PS16/19, the PRA updated SS34/15 ‘Guidelines for completing regulatory reports’.

EBA publishes findings from review of Single Rulebook Q&A use, usefulness and implementation

The EBA published an overview of the findings from its review of the use, usefulness and implementation of the Single Rulebook Q&A that provide common answers to stakeholders’ questions on the EU regulatory framework. The review, which focused on final Q&A relating to the CRR and the CRD, found that, overall, competent authorities (CAs) and institutions were satisfied with the utility of the Single Rulebook Q&A tool and its answers but had important and sometimes far-reaching suggestions for improvement.

European Central Bank responds to bailout of Banca Monte Paschi

Andrea Enria, Chair of the ECB’s supervisory Board, responded to a written question from Markus Ferber, MEP, regarding the bailout of Banca Monte Paschi. Ferber questioned when the ECB first learned about the bank’s solvency issues, how it justified the bailout in 2017 despite the bank’s precarious financial position and whether there was any pressure from a political or central bank level to come to a different conclusion. 

 

Back to top of page

 

Consumer credit, mortgage and home finance

 

New FOS webpages for consumer complaints and information for businesses on home credit, guarantor loans, unaffordable lending and financial difficulties

The FOS published new webpages providing information for consumers with complaints relating to home credit, guarantor loans and financial difficulties. The webpages address how the FOS handles such complaints, the most common areas for complaint, and how customers can complain. The FOS updated its unaffordable lending and guarantor loans webpages for businesses covered by FOS’ compulsory or voluntary jurisdictions. 

 

Back to top of page

 

Regulation of insurance

 

PRA publishes letter to chief risk officers of life insurers on proxy models

The PRA published a letter from Sid Malik, the PRA’s head of division – life insurance and pensions risk, to the chief risk officers of life insurers. The letter sets out the results of the PRA’s May 2018 Proxy Modelling Survey and the best practice observed by the PRA from the survey responses. Internal model firms will also receive specific feedback, which will not be made public.

ESAs address Commission on the exclusion of performance scenarios options from PRIIPs consumer testing exercise

The European Insurance and Occupational Pensions Authority (EIOPA) published a letter from the ESAs to Olivier Guersent, Director General of the European Commission, on the exclusion of performance scenarios options from a PRIIPs consumer testing exercise. 

 

Back to top of page

 

Regulation of personal pension and stakeholder products

 

The FCA announces August and September information events for former members of the British Steel Pension Scheme

The FCA will hold information sessions for former members of the BSPS on Wednesday 21 August and Thursday 5 September 2019. These events are aimed at former members of BSPS who transferred out of the BSPS and who potentially received unsuitable pensions transfer advice in connection with such transfers.

Millions of pension savers could put their retirement savings at risk to scammers

The FCA and The Pensions Regulator are joining forces again this summer to warn the public about fraudsters targeting people’s retirement savings. The warning comes as new research suggests that 42% of pension savers, which would equate to over five million people across the UK, could be at risk of falling for at least one of six common tactics used by pension scammers.

Commission calls for technical advice from EIOPA on PEPP delegated acts

The Council of the EU published a request by the European Commission for EIOPA to provide technical advice on possible delegated acts concerning Regulation (EU) 2019/1238 on a PEPP. The technical advice is due to be provided by 14 August 2020—12 months after the entry into force of the PEPP Regulation—and will cover issues relating to supervisory reporting and EIOPA’s product intervention powers under the PEPP Regulation.

Commons committee criticise government over pensions transparency

The House of Commons Work and Pensions Committee published a report stating they are ‘unconvinced’ that the pensions industry provides ‘transparent information to pensions schemes’. The committee calls on the government to ‘legislate for mandatory disclosure to a set format, for both defined contribution and defined benefit schemes’ and not wait for the industry to act by itself. The committee also offer recommendations to the FCA over pension scams and charge caps. Wyn Derbyshire, partner at Gunnercooke describes the findings as ‘disappointing’, but is carefully optimistic that a ‘practical solution’ can be found. 

 

Back to top of page

 

Payment services and systems

 

FCA issues amended Brexit directions for e-money and payment firms

The FCA issued two amended directions under the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018. The amended directions extend the deadline for electronic money institutions and payment service providers to submit notifications to the FCA under the TPR, in preparation for a no-deal Brexit, to 30 October 2019. The amended directions are:

Amended direction regulation 2018: notification before exit day (payments)

Amended direction regulation 2018: notification before exit day (e-money)

Confirmation of Payee to be implemented on 31 March 2020

The Payment Systems Regulator (PSR) issued PS19/4 – Specific Direction 10 which will require members of the UK’s six largest banking groups (comprising of Bank of Scotland plc, Barclays Bank UK plc, Barclays Bank plc, HSBC Bank plc, HSBC UK Bank plc, Lloyds Bank plc, National Westminster Bank plc, Nationwide Building Society, Royal Bank of Scotland plc, Santander UK plc and Ulster Bank Limited) to fully implement Confirmation of Payee (CoP) by 31 March 2020.

ECB publishes decision on oversight of systemically important payment systems with consultation responses

The ECB published a decision on the procedure and conditions for exercise by a competent authority of certain powers in relation to the oversight of systemically important payment systems (SIPS) (the decision). Alongside the decision, the ECB published details of response it received to the earlier public consultation concerning the draft decision.

BoE issues RTGS and CHAPS annual report

The BoE published the first combined annual report for the Real-Time Gross Settlement (RTGS) system and CHAPS. The report covers BoE’s long- and short-term strategy for RTGS and CHAPS and developments between November 2017 and February 2019.

Current Account Switch Service publishes white paper on switching savings accounts

Pay.UK (formerly the New Payment Systems Operator) published a white paper on the savings account market by the Current Account Switch Service (CASS), which it owns and operates. Research carried out by CASS, and set out in the white paper, indicates that consumers are not receiving the best deals and rates for their savings by staying with the same account.

PSR publishes June 2019 board minutes

The PSR published the minutes of its June 2019 board meeting. Topics discussed included Pay.UK and the new payments architecture, as well as developments in the access to cash strategy. The board also discussed the findings of its board effectiveness review. 

 

Back to top of page

 

Fintech and cryptoassets

 

ECB publication on understanding crypto-assets

The ECB published an article entitled ‘Understanding the crypto-asset phenomenon, its risks and measurement issues’, which discusses the crypto-asset phenomenon with a view to understanding its potential risks and enhancing its monitoring.

ICO calls for openness on proposed Libra cryptocurrency

The Information Commissioner’s Office (ICO) signed a statement calling for more openness about the proposed Libra digital cryptocurrency. The statement is signed by authorities representing people in Europe, the Americas, Africa and Australasia. The statement requests details of how customers’ personal data will be processed in line with data protection laws as well as assurances that only the minimum required data will be collected and that the service will be transparent.

FCA Insight: Artificial Intelligence in the boardroom

Magnus Falk, senior adviser at the FCA, wrote an FCA Insight article entitled ‘Artificial Intelligence in the boardroom.’ Falk emphasises that Artificial Intelligence (AI) should be considered not just by the IT department or at an operational level, but in the boardroom. Boardrooms must tackle the major issues arising from AI—notably around ethics, accountability, transparency and liability.

Seek authorisation, FCA tells firms offering cryptoassets

The FCA set out details of which cryptoasset activities it regulates so that financial companies offering digital assets can seek authorisation, as the watchdog seeks to protect consumers from potentially risky products. 

 

Back to top of page

 

Sustainable finance

 

ISDA-AFME publish feedback on interim TEG report on Climate Benchmarks and Benchmarks’ ESG disclosures

ISDA and AFME published feedback on the interim report on Climate Benchmarks and Benchmarks’ ESG disclosures by the EU TEG on Sustainable Finance.

AFME publishes pre-CRR3 position paper on sustainable finance

AFME published a ‘Pre-CRR3 position paper’ on sustainable finance. The paper reflects on the European Commission’s Action Plan on financing sustainable growth and its interaction with prudential regulation in the context of CRR2, and sets out AFME’s views including its expectation that the EU’s commitment to sustainability may continue to be considered in future changes to CRR3.

 

Back to top of page

 

Dates for your diary

 

DateSubjectEvent

 

8 August 2019

 

Regulation of insurance

 

Commission Delegated Regulation (EU) 2019/981 (the Solvency II Delegated Regulation) will enter into force on 8 August 2019. Certain provisions (points (50), (59) to (61), (66) and (74) of Article 1) will apply from 1 January 2020.

9 August 2019Prudential regulation

The deadline for feedback to the Basel Committee on Banking Supervision’s consultation on the consolidated version of its standards is 9 August 2019.

 

9 August 2019Markets and trading

The deadline for comments to be submitted on the Committee on the Payments and Market Infrastructures and International Organization of Securities Commissions discussion paper on central counterparty default management auctions is 9 August 2019.

 

9 August 2019Consumer credit

The deadline for applications to join the Personal Finance Society’s Financial Planning Practitioner Panel is 9 August 2019.

 

9 August 2019SM&CR and individual accountability

Section 21 of and Schedule 4 to the Bank of England and Financial Services Act 2016 will come into force on 9 August 2019 to bring the amendments set out in the, Bank of England and Financial Services Act 2016 (Commencement No 6 and Transitional Provisions) Regulations 2019, fully into force for other purposes in relation authorised individuals other than ‘solo–regulated firms’.

 

13 August 2019Complaints and redress

The deadline for feedback to the FOS’s consultation on its proposed future funding system is 13 August 2019.

 

14 August 2019Regulation of personal pension and stakeholder products

Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on PEPP will enter into force on 14 August 2019.

 

14 August 2019Investment funds and asset management

Exchange traded fund (ETFs) providers should submit their applications by 14 August 2019 for inclusion in the initial batch of ETFs to be added to the IA’s sectors, after which they will be added on a rolling basis.

 

15 August 2019Regulation of insurance

The deadline for feedback to the International Association of Insurance Supervisors (IAIS)’s public consultation on IAIS supervisory material is 15 August 2019.

 

 

Back to top of page

Relevant Articles
Area of Interest