Weekly highlights—23 November 2017

Welcome to the weekly Financial Services highlights from the Financial Services team for the week ending 23 November 2017.

Brexit

Government responds to UK trade options beyond 2019 inquiry—financial services aspects

The House of Commons International Trade Committee (ITC) published the government's response to the ITC's March 2017 report into UK trade options beyond 2019 following Brexit. In relation to trade in financial services, in recommendation 9, the report stated that the government should seek the nearest achievable approximation to passporting and in recommendation 14 that there should be a plan in place for transitional arrangements to ensure that passporting in financial services will not come to a sudden end. The report also sought clarity in recommendation 10, regarding how complex disputes in the financial sector would be resolved without the involvement of the European Court of Justice (ECJ).

Barnier—EU27 wants ‘close relationship’ with UK, but ‘Brexit means Brexit’

In a speech to the Centre for European Reform on the future of the EU, the EU’s chief Brexit negotiator, Michel Barnier, underlined the desire for the EU27 to seek a ‘close relationship with the UK’ once Brexit happens. Barnier spoke about building a ‘stronger’ EU and addressed matters such as the Eurozone, Ireland and the single market, highlighting in particular that, while the UK will lose the benefits of the single market, the EU ‘does not want to punish’.

ECB critical of banks' 'empty shell' Brexit relocation plans

The European Central Bank (ECB) reprimanded several banks for seeking to move some of their regulated services from the UK to the EU as a result of Brexit on the basis that their banking applications were inadequate as they involve setting up 'empty shell' operations in the EU that are not properly staffed.

EBA welcomes decision on new location

The EBA welcomed the Council of the EU’s decision on its relocation to Paris, given the UK's intention to withdraw from the EU. The EBA says the decision reassures its staff over the new location and puts an end to a period of uncertainty.

UK Finance offers model framework for post-Brexit EU and UK financial services

UK Finance published a report proposing an alternative model for a future trade framework for banking and capital markets services between the EU and the UK. The report says the model is ‘both robust and flexible’.

ISDA webinar on Brexit—an update and implications for derivatives

The International Swaps and Derivatives Association (ISDA) published a webinar update on the implications of Brexit for the derivatives market. The webinar covers the current state of UK/EU negotiations, the UK's European Union Withdrawal Bill, and central counterparty supervision and location policy.

Financial Conduct Authority updates

FCA Regulation round-up—November 2017

The Financial Conduct Authority (FCA) published the November 2017 edition of its regulation round-up. Topics discussed include the first of its Approach documents—the FCA's Future Approach to Consumers. The round-up also includes details about the terms of reference for the FCA's wholesale insurance broker market study, as well as the publication by the Treasury of its update to the National Risk Assessment (NRA) of money laundering and terrorist financing.

FCA announces additional regional events for mortgage and general insurance firms

The FCA announced details of the first set of regional events taking place in 2018 for regulated mortgage and general insurance firms, as part of its Live & Local programme.

Regulatory architecture

Autumn Budget 2017—Financial Services

The Chancellor of the Exchequer announced several measures relevant to financial services, including an expansion of the Open Banking initiative and a new strategy for the UK investment management industry in the Autumn Budget 2017. The government says it is committed to supporting competition in banking, and the Autumn Budget set out several actions which are intended to promote innovation in banking services, strengthen challenger banks, and improve access to affordable credit for consumers.

Joint Committee of ESAs publishes 2018 work programme

The Joint Committee of the European Supervisory Authorities (ESAs) released its work programme for 2018, setting out the ways the European Insurance and Occupational Pensions Authority (EIOPA), the EBA and the European Securities and Markets Authority (ESMA) will work together. The Committee says it will continue to focus its work on consumer protection issues such as supporting the implementation of the new Packaged Retail and Insurance-based Investment Products (PRIIPs) rules, analysing the adequacy of cross-border supervision of financial services, and FinTech developments.

ESMA chair discusses priority topics for 2018

The chair of ESMA, Steven Maijoor, delivered a speech on ESMA’s priorities for 2018, in which he discussed costs and charges of investment funds, investment fund stress testing, and supervisory convergence in the context of Brexit.

Valdis Dombrovskis outlines forthcoming proposals

The vice-president of the European Commission, Valdis Dombrovskis, spoke on the EU’s ‘two flagship projects’—banking union and capital markets union—and sketched out forthcoming proposals to help strengthen the single currency ‘in the face of unforeseen challenges’. Mr Dombrovskis said further integrating financial markets would help to absorb shocks through private risk-sharing, better protect taxpayers from having to pay for the mistakes of the banking sector, and reduce the need for public risk-sharing within the Economic and Monetary Union.

ECB executive discusses NPLs, Brexit and risk management

The ECB published a speech by Sabine Lautenschläger, a member of its executive board and vice-chair of its supervisory board, in which she discussed non-performing loans (NPLs), Brexit, and risk management. Ms Lautenschläger called on the banks to devise ambitious, realistic and credible plans to get rid of their NPLs and suggested now was the time to do so as economic conditions were fair. Concerning Brexit, Ms Lautenschläger warning to the banks was stark: ‘Don’t procrastinate. No one will wait for you’.

BIS reactivates the FSI Advisory Board

The Bank for International Settlements (BIS) announced that it has decided to reactivate the Financial Stability Institute (FSI) Advisory Board that was originally created in 1998 (and ceased to operate some time later) to help achieve closer interaction with central banks and financial supervisory agencies, which are its main stakeholders.

Lords pass Financial Guidance and Claims Bill with amendments

The Financial Guidance and Claims Bill received its third reading by the House of Lords on 21 November 2017. The Lords passed the Bill with a number of amendments and sent it to the Commons for its consideration. Among other things, the amendments envisage the creation of a debt respite scheme and call for a fee cap for claims management services provided in connection with a payment protection insurance (PPI) claim.

Authorisation, approval and supervision

FCA updates information on cancelling authorisations

The FCA updated its webpage giving information on how to cancel an authorisation.

Law Society responds to the FCA consultation on extension of the SM&CR regime

The Law Society published a response to the FCA's consultation on Individual accountability: Extending the Senior Managers & Certification Regime (SM&CR) to all FCA firms. The Law Society remains strongly of the view that the legal function should be excluded from the scope of the SM&CR.

Prudential requirements

ESMA issues final report on the Money Market Funds Regulation

ESMA published a final report on the Money Market Funds Regulation (EU) 2017/1131 (MMF Regulation), containing final versions of the technical advice, draft implementing technical standards (ITS), and guidelines on stress test scenarios carried out by MMF managers under the MMF Regulation. The key requirements relate to asset liquidity and credit quality, the establishment of a reporting template and stress test scenarios carried out by MMF managers.

EBA publishes final guidelines on risk parameters under the IRB approach

The EBA published its final guidelines on the estimation of risk parameters for non-defaulted exposures. The guidelines cover the probability of default (PD) and the loss given default (LGD) and the treatment of defaulted exposures under the advanced IRB Approach, including estimation of parameters such as ELBE and LGD in-default. The guidelines, which are part of the EBA's regulatory review of the IRB approach, aim to restore market participants' trust in internal models by reducing the unjustified variability in their outcomes, ensuring comparability of risk estimates while at the same time preserving risk sensitivity of capital requirements.

Council of the EU publishes Commission Delegated Regulation on RTS for valuation difference in resolution

The Council of the EU published a draft Commission Delegated Regulation supplementing the Bank Recovery and Resolution Directive (Directive 2014/59/EU) (BRRD) on the regulatory technical standards (RTS) specifying the methodology for the valuation of the difference between the treatment that shareholders or creditors of an institution under resolution have received, and the treatment they would have received had the institution entered normal insolvency proceedings.

Council of the EU publishes Commission Delegated Regulation on RTS for valuation of assets and liabilities in a resolution scenario

The Council of the EU published a draft Commission Delegated Regulation supplementing the BRRD on the RTS specifying the criteria relating to the methodology for assessing the value of assets and liabilities of institutions or entities. The RTS set out the methodology to be used for valuation in a resolution scenario.

EBA publishes methodology for the 2018 EU-wide stress test

The EBA published its final methodology for the 2018 EU-wide stress test. The methodology covers all relevant risk areas and, for the first time, incorporates IFRS 9 accounting standards. The stress test exercise will be formally launched in January 2018, with the results to be published by 2 November 2018.

FSB publishes 2017 G-SIB list

The Financial Stability Board (FSB) published the 2017 list of global systemically important banks (G-SIBs), using end-2016 data and an assessment methodology designed by the Basel Committee on Banking Supervision (BCBS). The list still comprises 30 banks, but with Royal Bank of Canada joining and Groupe BPCE having been removed.

EBA presentation on draft ITS on supervisory information under CRD IV

The EBA published a presentation given at a public hearing on 17 November 2017 on draft ITS amending Commission Implementing Regulation (EU) 650/2014 on the format, structure, contents list and annual publication date of the supervisory information to be disclosed by competent authorities in accordance with Article 143(3) of the Capital Requirements Directive 2013/36/EU (CRD IV).

EBA: good progress on supervisory convergence but challenges remain

The EBA published its third annual report on the convergence of supervisory practices across the EU. The report reviews consistency in the application of the Supervisory Review and Evaluation Process (SREP) in order to promote comparable supervisory approaches and consistency in supervisory outcomes across the single market.

EBA presentation on its review of the resolution reporting ITS

The EBA published a presentation on its review of the implementing technical standards on reporting for resolution plans, delivered at a public hearing on 26 September 2017.

How to serve the PRA with written statements on ring-fencing transfer schemes

The Prudential Regulation Authority (PRA) published a webpage providing information about how to serve the PRA with copies of written statements to a firm's ring-fencing transfer scheme (RFTS).

Thematic reviews aim to improve corporate reporting and auditing

The Financial Reporting Council (FRC) announced that, in 2018/19, it will supplement its routine monitoring programme with a series of thematic reviews of corporate reports and audits. The objective of the supplementary reviews is to stimulate improvement in corporate reporting and auditing.

EBA updates list of CET1 instruments

The EBA published its sixth updated list of capital instruments that competent authorities across the EU have classified as Common Equity Tier 1 (CET1). The list was last updated in May 2017.

Risk management and controls

Investigation opened into Mitie Group plc’s reports and accounts

The FRC opened an investigation in relation to the preparation and approval of the financial statements for Mitie Group plc for the year ended 31 March 2016. The FRC also has an ongoing investigation in relation to the conduct of Deloitte LLP’s audit of Mitie under the audit enforcement procedure.

FCA COO discusses cyber security in the financial services industry

The chief operating officer at the FCA, Nausicaa Delfas, delivered a speech on how to address cyber issues within firms at the Cyber Security Summit and Expo 2017. Ms Delfas said the FCA’s role was to help firms to become more resilient to cyber attacks, to enhance market integrity and to protect consumers, but she also pointed out that cyber resilience is in a sense ‘beyond compliance’—it should be business led.

ECB executive discusses cyber resilience and the Eurosystem

The director general for market infrastructure and payments at the ECB, Marc Bayle de Jessé, delivered a speech setting out the ECB’s views on the regulation of cyber security. Mr Bayle de Jessé warned that if the European system of central banks or the financial ecosystem were compromised, it could not only cause disruption but potentially undermine confidence in the financial system, majorly impact the Eurosystem’s reputation and affect financial stability.

ECB speech looks at the role of the internal auditor

The ECB published the text of a speech by a member of its supervisory board, Pentti Hakkarainen, on the role of internal auditors in ensuring sound governance, setting out how supervisors and internal auditors can work together.

Financial crime

Anti-Money Laundering Bill contains ‘inappropriate powers’, Lords Committee finds

The Sanctions and Anti-Money Laundering Bill, the first Brexit bill to be scrutinised by the House of Lords, contains inappropriately broad powers for ministers, the Lords Constitution Committee warned. The Committee is particularly concerned by a provision under the Bill which allows ministers to create criminal offences punishable by up to ten years’ imprisonment, while also setting the rules on evidence consideration and defence to those offences.

Money laundering group jailed after paying £1.8m drugs money into UK banks

A woman has been jailed for six years and three months after being convicted of four counts of money laundering at Kingston Crown Court. A National Crime Agency (NCA) investigation found she was part of a Chinese money laundering group which paid more than £1.8m in criminal cash into London high street banks between 30 July and 15 August 2016. Two others have also been prosecuted in relation to the money laundering.

JMLSG proposes further revisions to AML/CTF guidance

The Joint Money Laundering Steering Group (JMLSG) proposed minor revisions to its anti-money laundering and counter-terrorist financing guidance. The guidance was most recently updated in June 2017 to reflect the entering into force of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (2017 MLRs). The deadline for comments on the new revisions is 4 December 2017.

Sanctions and Anti-Money Laundering Bill [HL]

Bill to make provision enabling sanctions to be imposed where appropriate for the purposes of compliance with United Nations obligations or other international obligations or for the purposes of furthering the prevention of ​terrorism or for the purposes of national security or international peace and security or for the purposes of furthering foreign policy objectives; to make provision for the purposes of the detection, investigation and prevention of money laundering and terrorist financing and for the purposes of implementing Standards published by the Financial Action Task Force relating to combating threats to the integrity of the international financial system; and for connected purposes. The House of Lords committee stage (day 2) is due 29 November 2017.

Enforcement and redress

Directors banned for using money from a pension liberation scheme to pay off company debts

Three directors of a payday loan company who used money from a pension liberation scheme to pay off company debts have been banned for a total of 20 years following an investigation by the Insolvency Service.

Markets and trading

ESMA consultation on guidelines on position calculation under EMIR

ESMA published a consultation on its proposed guidelines on position calculation under the European Market Infrastructure Regulation 648/2012 (EMIR). The purpose of the guidelines is to ensure that trade repositories (TRs) calculate positions in derivatives in a harmonised and consistent manner in accordance with Article 80(4) of EMIR. The consultation closes on 15 January 2018.

Rules on indirect clearing of derivatives published in the Official Journal

Two Commission Delegated Regulations on RTS for indirect clearing arrangements under EMIR and Markets in Financial Instruments Regualtion /600/2014 (MiFIR) were published in the Official Journal of the EU. The regulations shall apply from 3 January 2018.

Council of the EU publishes compromise text on OTC derivatives transparency regulation

The Council of the EU published a compromise text on the proposal for a regulation amending EMIR. The regulation seeks to contribute to reducing systemic risk by increasing the transparency of the over-the-counter (OTC) derivatives market and reducing the counterparty credit risk and the operational risk associated with OTC derivatives.

Commission adopts RTS specifying derivatives subject to MiFIR trading obligation

The European Commission adopted the Commission Delegated Regulation of 17.11.2017 supplementing MiFIR with regard to RTS on the trading obligation for certain derivatives (C(2017) 7684 final).

Commission publishes Commission Delegated Regulation on ESMA’s trade repository fees

The European Commission published a Commission Delegated Regulation supplementing the Securities Financing Transactions Regulation (Regulation (EU) 2015/2365) (SFTR) with regard to the fees charged by ESMA to trade repositories. In its annex, the Delegated Regulation specifies the calculation method and payment terms for the first-year interim supervisory fees defined in Article 13. The Commission is seeking feedback on the text by 14 December 2017.

Capital markets union: Council adopts securitisation rules

The Council of the EU adopted rules to develop a securitisation market in Europe, which it says will help create new investment possibilities and provide an additional source of finance, particularly for SMEs and start-ups. The Council set out that the new rules are part of the EU’s plan to develop a fully functioning capital markets union by the end of 2019.

Commission publishes report on European corporate bond markets

The European Commission published a report on improving European corporate bond markets, saying integrated, efficient and resilient corporate bond markets are a vital and core pillar of a successful capital markets union. The Commission says strong corporate bond markets will give businesses access to more diverse sources of funding and offer Europeans more investment opportunities.

Robeco Hollands Bezit NV and others v Stichting Autoriteit Financiële Markten

Article 4(1)(14) of Directive (EC) 2004/39 (MiFID) should be interpreted as meaning that the concept of a 'regulated market' within the meaning of that provision covered a trading system in which multiple fund agents and brokers represented, respectively, 'open end' investment funds and investors, the sole purpose of which was to facilitate those investment funds in their obligation to execute the purchase and selling orders for shares placed by those investors. The Court of Justice of the European Union so held in proceedings concerning the imposition of charges on the applicant companies for costs incurred by the Netherlands Financial Markets Authority in performing its supervisory duties. The judgment is available at: C-658/15.

FCA fines trader £60,090 for market abuse

The FCA fined Paul Walter, a former Bank of America Merrill Lynch International Limited (BAML) bond trader, £60,090 for engaging in market abuse. The FCA found that Mr Walter, an experienced trader, had engaged in market abuse by creating a false and misleading impression as to supply and demand in the market for Dutch State Loans (DSL) on 12 occasions in July and August 2014.

ESMA issues clarification on rotation periods of CRA analysts

ESMA published an update to its Q&A on the application of the Credit Rating Agencies Regulation (CRA Regulation) (Regulation (EC) 1060/2009) to add a new section in Part VI to cover organisational requirements.

ESMA clarifies endorsement regime for third-country credit ratings

ESMA published updated guidelines on the application of the regime for endorsement of third-country ratings under Article 4(3) of the CRA Regulation. The guidelines replace the earlier guidelines adopted in May 2011.

ESMA updates its EMIR Q&As

ESMA published an update of its Q&As on practical questions regarding EMIR.

ESMA updates CSDR Q&As

ESMA published an update of its Q&As on the implementation of the Central Securities Depository Regulation (CSDR). The updated Q&S provide detailed answers to questions on relevant authorities, conduct of business rules, protection of securities and prudential requirements.

ESMA updates the Market Abuse Regulation Q&As

ESMA updated its Q&A document regarding the implementation of the Market Abuse Regulation. ESMA has added two new Q&As, which relate to the interpretation of Article 19 on insider dealing and on the types of ‘transaction’ by a person discharging managerial responsibilities prohibited during a closed period.

ESMA makes GFMA LEI Webinar available

ESMA staff recently participated in a Global Financial Markets Association (GFMA) webinar on the topic of Legal Entity Identifier (LEI) requirements under MiFID II and EMIR. A full video of the webinar can be viewed on ESMA’s YouTube channel (ESMA’s participation begins at the 09:20 minute mark) or download the presentation slides.

HSBC Private Bank fined HK$400m for ‘systemic failures’

HSBC Private Bank (Suisse) SA, the Hong Kong branch of the Switzerland-based private banking business of HSBC Group, has been fined a record sum of HK$400m, or over £38m. This comes after the Securities and Futures Appeals Tribunal (SFAT) upheld the Securities and Futures Commission (SFC’s) disciplinary action against the bank for ‘material systemic failures in relation to the sale of derivative products’. The failures were against Lehman Brothers-related Notes and Leveraged Forward Accumulators, in the run-up to the global financial crisis in 2008. The SFAT concluded that the bank’s culpability was ‘extensive, putting many clients at unnecessary risk of loss and indeed resulting in substantial losses for many’.

GFXC to clarify principle 17 of FX global code

The Global Foreign Exchange Committee (GFXC) issued a press release concerning its meeting on 14 November 2017, in which it discussed the response received to its request for feedback on Last Look practices in the Foreign Exchange Market.

EACH responds to European Commission’s post-trade consultation

The European Association of CCP Clearing Houses (EACH) responded to the European Commission’s consultation on post-trade in a capital market union: dismantling barriers and strategy for the future. The consultation seeks views on a range of issues, including the current state of post-trade markets, the main trends and challenges faced by post-trade services providers and users, and the best ways to remove barriers, including through financial technology.

Investment funds and wealth management

Joint Committee of ESAs updates Q&A on PRIIPs KID

The Joint Committee of the European Supervisory Authorities (ESAs) published an updated version of the Q&A document relating to the key information document (KID) requirements for PRIIPs, as laid down in Commission Delegated Regulation (EU) 2017/653.

Fund Objectives Working Group meeting

The FCA published a summary of points discussed by the Fund Objectives Working Group at its meeting on 25 September 2017, and papers setting out the issues to be raised in the first and second sessions of the working group, including some initial thoughts on the questions for discussion.

Consumer credit, mortgage and home finance

ABI launches guide for firms on vulnerable customers and long-term savings

The Association of British Insurers (ABI) published guidance to help firms in the long-term savings market better identify, understand and support vulnerable customers. The ABI says the guide was developed by a working party of leading life and pension providers, and draws on examples of good practice to raise awareness across the market of how to best identify and support vulnerable customers.

Insurance and pensions

EIOPA sets out path towards increased supervisory convergence

The chair of EIOPA, Gabriel Bernardino, says that more supervisory convergence is needed to ensure financial stability and protect policyholders in the EU. Speaking at EIOPA's 7th Annual Conference in Frankfurt, Mr Bernardino also gave an update on EIOPA's review of Solvency II, and suggested some priorities for the roll-out of the proposed European Personal Pension Product (PEPP).

European Parliament seeks IDD application delay

The European Parliament asked the Commission to adopt a legislative proposal to postpone the application date of the Insurance Distribution Directive (EU) 2016/97 (IDD) until October 2018. It says a proposal is needed swiftly in order to enhance legal certainty concerning the provisions applicable and to allow for the necessary organisational and technical changes needed to comply with the provisions.

Proposal for technical revision of EU-Switzerland Agreement on non-life insurance

The Council of the EU published the European Commission's proposal for a Council decision on the position to be taken on behalf of the EU in the EU-Switzerland Joint Committee (ESJC) on a technical revision of the agreement on direct insurance other than life insurance (COM(2017) 666 final). The Annex to the proposal contains a form of decision to be adopted by the ESJC.

EIOPA identifies a search-for-yield trend in the investment behaviour of insurers

EIOPA published survey results analysing trends in the investment behaviour of European insurers over the past five years, which revealed trends that could be associated with search-for-yield behaviour in the insurance industry.

Pensions freedoms have led to reduced consumer choice, says Pensions Institute

Recent government reforms and rapid market changes have led to reduced consumer choice over pensions products, leaving the UK facing a potential crisis in the retirement income market, according to a report from the Pensions Institute.

OECD updates guidelines on insurer governance

The Organisation for Economic Co-operation and Development (OECD) published an updated version of its guidelines on insurer governance. The guidelines have been revised and expanded for the second time since they were first adopted in 2005 to reflect evolving market practices and updates to international guidance following the financial crisis.

FSB says no new G-SII list for 2017

The Financial Stability Board (FSB), in consultation with the International Association of Insurance Supervisors (IAIS) and national authorities, decided not to publish a new list of global systemically important insurers (G-SIIs) for 2017. The policy measures set out in the FSB’s 2016 communication on G-SIIs, as updated in February 2017, on the higher loss absorbency (HLA) standard, will continue to apply to the firms listed in the 2016 communication.

Payment services and systems

ECB regulations and decisions on SIPS published in the Official Journal

Two ECB regulations and two decisions on systemically important payment systems (SIPS) were published in the Official Journal of the EU.

  • Regulation (EU) 2017/2094 of the ECB of 3 November 2017 amending Regulation (EU) No 795/2014 on oversight requirements for SIPS (SIPS Regulation)
  • Regulation (EU) 2017/2095 of the ECB of 3 November 2017 amending Regulation (EC) No 2157/1999 on the powers of the ECB to impose sanctions
  • Decision (EU) 2017/2097 of the ECB of 3 November 2017 on the methodology for calculating sanctions for infringements of the oversight requirements for SIPS, and
  • Decision (EU) 2017/2098 of the ECB of 3 November 2017 on procedural aspects concerning the imposition of corrective measures for non-compliance with Regulation (EU) No 737/2014

ECON scrutiny paper on PSD2 and the IFR

In advance of the European Parliament's Committee on Economic and Monetary Affairs (ECON) scrutiny session on 21 November 2017, ECON published a briefing on the revised Payment Services Directive (PSD2) (Directive (EU) 2015/2366) and the RTS on Strong Customer Authentication and Secure Communication and the RTS on the separation of payment card schemes and processing entities under the Interchange Fee Regulation (IFR) (Regulation (EU) 2015/751).

SEPA Instant Credit Transfer scheme goes live

The European Payments Council (EPC) announced that the SEPA Instant Credit Transfer scheme is operational. The system allows for transfers of up to 15,000 euros in less than ten seconds. The EPC called the launch a ‘significant step towards faster, more innovative and digital payments in Europe’.

EPC updated SEPA guidelines and clarification paper on SEPA credit transfer rulebooks

The EPC published a number of updated guidelines and clarification papers for rulebooks relating to the Single Euro Payments Area (SEPA).

CAT private action—summary of damages action in British Telecommunications Plc and Others v MasterCard Inc and Others published

The Competition and Markets Authority (CAT) published a summary of notice of a claim for damages brought under section 47A of the Competition Act 1998 by British Telecommunications plc, EE Limited, Plusnet plc and DABS.COM Limited against MasterCard. The claim is for damages resulting from an alleged overcharge for credit card transactions over the period 11 September 2011 to 9 December 2015 following the introduction and operation of Multilateral Interchange Fee (MIFs). The claimants argue they have suffered loss and damage as a result of this overcharge and claim damages as the difference between the MIF which the claimants paid and the MIF which the claimants would have paid had a lawful scheme been in operation.

Fintech and virtual currencies

Machine learning and the future of financial regulation

The FCA published a speech given by its head of behavioural economics and data science, Stefan Hunt, on the power of machine learning and artificial intelligence for regulators. In the speech, which was delivered on 19 October 2017 at the Beesley Lecture Series on regulatory economics, Mr Hunt explores how machine learning can improve regulatory tools and improve the efficiency and effectiveness of regulators.

Report on FinTech and financial institution collaborations

TheCityUK, Santander UK and Shearman & Sterling published a report setting out how greater collaboration between financial services institutions and FinTechs can smooth the path to developing innovative new digital products and services.

Dates for your diary

Date Topic Event
25 November 2017 Insurance Distribution Directive Deadline for responses to FCA consultation ‘CP17/33: Insurance Distribution Directive implementation—Consultation Paper 3’.
26 November 2017 Investment funds and wealth management Deadline for responses to Legal Entity Identifier (LEI) Regulatory Oversight Committee (ROC) consultation a proposed limited update to the way relationships affecting funds are recorded in the global LEI system (GLEIS).
27 November 2017 Investment funds and wealth management Deadline for responses to the European Commissions inception impact assessment on crowdfunding, seeking views on possible ways of regulating the sector.
28 November 2017 Prudential requirements The results of the Bank of England (BoE) 2017 stress test scenarios for the seven major UK banks and building societies will be published on this date.
28 November 2017 Regulatory architecture The Financial Policy Committee will publish a report on this date.
30 November 2017 Prudential requirements Deadline for responses to the European Commissions consultation on common minimum levels of capital that EU banks must set aside to cover incurred and expected losses on newly originated loans that turn non-performing (NPLs).
30 November 2017 Benchmarks Regulation Deadline for responses to ESMA ‘Consultation Paper: Draft guidelines on non-significant benchmarks (ESMA70-145-105)’.
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