Latest legal and regulatory news update - 8 November 2019

Latest legal and regulatory news update - 8 November 2019

Our November update covers Brexit, Risk & Compliance, Commercial, Corporate, Information Law & TMT and Employment. 

  • Brexit
  • Risk & Compliance
  • Commercial
  • Corporate
  • Information Law & TMT
  • Employment

Brexit
Brexit SI Bulletin

The Commons European Statutory Instruments Committee and the Lords Secondary Legislation Scrutiny Committee are responsible for the sifting process under the European Union (Withdrawal) Act 2018. These committees scrutinise proposed negative Brexit SIs and make recommendations on the appropriate parliamentary procedure before the instruments are laid in Parliament. This bulletin outlines the latest updates and recommendations, collated on 1 November. See News Analysis: Brexit SI Bulletin—latest drafts and sifting committee recommendations, 1 November 2019.

 

Risk & Compliance
AML & CTF

The National Crime Agency has published its annual UK financial intelligence unit (UKFIU) report into suspicious activity reports (SARs). The UKFIU reports that it received and processed 478,437 SARs between April 2018 and March 2019, including 34,543 requests for a defence against money laundering (representing a 52.72% increase) with refusals of a defence numbering a small 1372. These refused requests related to a total of £131,667,477 in funds which were restrained, seized, forfeited or recovered as a result (more than double on the previous year). 459 cases involved no previous or existing law enforcement investigation. See: LNB News 06/11/2019 31.

The Financial Action Task Force (FATF) is developing guidance to clarify how digital identity systems can be used for customer due diligence (CDD), and consulting on a draft. The guidance intends to help governments, financial institutions and other relevant entities apply a risk-based approach to the use of digital ID for CDD. Feedback is sought by 29 November 2019. See: LNB News 31/10/2019 80.

 

Cybersecurity

The National Cyber Security Centre (NCSC) has published the first full cybersecurity body of knowledge (CyBOK), which codifies foundational information in 19 knowledge areas and should be used as a tool to address the means and objectives of cybersecurity, understand failures and incidents and limit risk. See: LNB News 06/11/2019 51.

Europol has published a strategic report on spear phishing, one of the most prevalent cyber threats, detailing recommendations on prevention, response and investigation. See: LNB News 04/11/2019 30.

 

Commercial
Contracts

Fiona Whiteside, barrister at Twenty Essex, considers the judgment in New York Laser Clinic Ltd v Naturastudios Ltd, one of the few to explore the law relating to tripartite collateral warranties. It also confirms that, where a collateral warranty as to performance or quality is breached, damages are recoverable on the expectation basis (as if the warranty had been true) rather than the reliance basis (as if the warranty had never been made). See News Analysis: Tripartite collateral warranties—law and measure of damages (New York Laser Clinic Ltd v Naturastudios Ltd).

 

Consumer protection

The Competition and Markets Authority (CMA) has announced Currys is making improvements to the way it sells extended warranties. Electrical retailers are required to provide accurate information to customers when selling extended warranties so that they can make informed decisions about buying extra cover. The results of arranged mystery shopping concerned the CMA in two areas: the provision of information relating to cosmetic damage and the provision of approved quotes. Improvement action taken by Currys include extra training for staff, visual information explaining what is and isn’t covered and a new monthly mystery shopping programme. See: LNB News 05/11/2019 63.

 

Confidential information

MLex: Google, Facebook, Vodafone, Deutsche Telekom and other tech and telecom companies are eager to see whether EU governments can overcome two-and-half years of talks on a proposal to boost levels of confidentiality for online communication services, as a new draft text is circulated. See News Analysis: Google, Facebook, Vodafone await new draft of controversial ePrivacy regulation.

 

Corporate
Audit

The FRC has published a report, Developments in Audit 2019, in which it concludes that audit quality is not consistently reaching the expected standards, in particular when it comes to challenging management and performing routine procedures such as revenue recognition. Inspection reports show that auditors struggle the most with sufficiently challenging management, especially in more judgmental areas, such as long-term contracts, goodwill impairment or the valuation of financial instruments. See: LNB News 05/11/2019 75.

 

Corporate governance

The Business, Energy and Industrial Strategy (BEIS) Committee has proposed a series of recommendations on corporate governance, executive pay and bonuses, and audit reform in light of the collapse of Thomas Cook. In a letter to Andrea Leadsom, the Business Secretary, the BEIS committee calls for the government to push ahead with proposed legislation to replace the Financial Reporting Council (FRC) with the Audit, Reporting and Governance Authority, and reforms of auditing. See: LNB News 04/11/2019 49.

 LexisNexis® Webinar: Public M&A update: Q3 2019

This webinar, Public M&A update: Q3 2019, is a follow-on to the Market Tracker trend report UK Public M&A Trend Report update—1 July-30 September 2019, published last month.

Information Law & TMT
Data protection

The Joint Committee on Human Rights has released a report called The Right to Privacy (Article 8) and the Digital Revolution, arguing that the ‘consent model’ for the online use of personal data ‘is broken’. Joanne Vengadesan, partner of IP, IT and Commercial at Penningtons Manches Cooper and Emma Woollcott, head of reputation protection at Mishcon de Reya and specialising in privacy law and data protection, discuss the possible impact of the report. See: LNB News 04/11/2019 47.

The European Commission (Commission) recently issued a report on the third annual EU-US Privacy Shield review. In its report, the Commission confirmed that the Privacy Shield framework continues to ensure an adequate level of protection for personal data transferred from the EU to companies participating in the Privacy Shield program in the US (see: LNB News 23/10/2019 94). In concluding its report, the Commission provided additional action items necessary to ensure the continued functioning of Privacy Shield, including time limits for re-certifications and encouraging US authorities to expand their substantive review of Privacy Shield compliance spot-checks. Brian Hengesbaugh, Partner at Baker McKenzie LLP, analyses the report’s findings. See News Analysis: Third annual Privacy Shield review confirms commission's adequacy decision.

 

Cyber security

The Department for Digital, Culture, Media & Sport (DCMS) has issued a call for evidence, seeking views and advice on how the government can help improve cyber security across the UK economy. DCMS says it wants to understand the barriers which prevent organisations from improving their cyber security, and hear views on the effectiveness of existing interventions, including regulations like GDPR and the NIS Directive, and other guidance and support. Feedback is sought by 20 December 2019. See: LNB News 04/11/2019 70.

 

Employment
Pay

The Investment Association has published an updated version of its Principles of Remuneration together with an open letter to remuneration committee chairs, which highlight areas of focus for the 2020 AGM season. See: LNB News 01/11/2019 67.

 

Banking and financial services: employment issues

The Banking Standards Board (BSB) has published four good practice guidance documents intended to help firms reference their own policies and procedures against a statement of what ‘good’ looks like in relation to the Financial Conduct Authority (FCA)’s Senior Managers and Certification Regime (SM&CR). According to the BSB, this guidance facilitates the practical application of the rules in a way that respects both the purpose and spirit of the FCA’s requirements. See: LNB News 04/11/2019 58.

 

Pensions

Cybersecurity is a clear financial risk facing pension schemes’ assets, according to a new report jointly published by Nest and RPMI Railpen, the investment manager of the railways pension schemes. See: LNB News 06/11/2019 11.

Related Articles:
Latest Articles:
About the author:
Allison is a former partner of Shoosmiths, with extensive experience of legal management and practice compliance.