ESMA has issued a warning to remind firms of the investor protection concerns around receipt of payment for order flow. It has previously said that it is unlikely that the receipt of PFOF would be compatible with MiFID...
Category - Investments
Emma RadmoreG20 Finance Ministers and Central Bank Governors meeting
The G20 Finance Ministers and Central Bank Governors (FMCBGs) have had their third official meeting under the Italian G20 Presidency. Highlights include: The global outlook has improved, mainly thanks to the roll out of...
Emma RadmoreFCA consults on reforms to improve the effectiveness of UK primary markets
The FCA has launched a consultation on proposed reforms to improve the effectiveness of UK primary markets in combination with a discussion about how the FCA might continue to develop the listing regime to ensure the UK...
FIN. TeamPRA consults on designating investment firms
The PRA is proposing minor changes to its policy on designating investment firms. This includes a proposal to increase the base capital resources requirement for PRA-designated investment firms, thereby aligning it with...
EBA publishes standards for supervision of investment firms
The EBA has published final draft regulatory technical standards (RTS) on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms. The draft RTS provide...
ESAs report on F&P, internal governance and remuneration
EBA and ESMA have reported on: assessment of suitability of members of the management body and key function holders under CRD V and MiFID 2. The guidelines focus on the revisions brought in by the IFR and their affect...
Appeal refused on FCA action against unauthorised firm
The application to appeal has been refused in the case of FCA v 24 Hr Trading Academy. In this case, the High Court had held that 24 Hr Trading Academy had beached the regulated activities and financial promotion...
FCA publishes first policy statement on IFPR
Following its consultation in December 2020, the FCA has published the first of its policy statements (PS) on the introduction of the UK Investment Firms Prudential Regime (IFPR). In general, the FCA has implemented its...
FCA bans crypto exchange Binance
Binance Markets Limited is not permitted to carry on any regulated activity in the UK without the prior written consent of the FCA. The FCA has also issued a warning about Binance.com, advising consumers to be wary of...
FCA publishes VOP refusal
FCA has published its final notice explaining its reasons for refusing a firm’s application to vary its permission. Gedik International Limited was authorised in February 2020 as an agency brokerage with a set of...
Treasury Committee calls for FCA culture shift
The Treasury Committee has published a unanimously agreed report on FCA’s regulation of London Capital and Finance, in which it expresses the view that FCA cannot justify expecting firms it regulates to comply...
EBA report: management and supervision of ESG risks for credit institutions and investment firms
The EBA has published its Report on Environmental, Social and Governance (ESG) risks management and supervision. The report provides institutions with common definitions of ESG risks and their transmission channels and...
More of FS Act comes into force
The second Commencement Order under the FS Act 2021 brings into force: on 28 June the provisions on forfeiture of money in relation to EMIs and payment institutions, as they extend to Northern Ireland; and on 1 July...
Treasury publishes outcome of IFPR consultation
HM Treasury has published the outcome of its consultation on the UK’s approach to the implementation of the Investment Firms Prudential Regime (IFPR). The consultation outlined how the government proposed to...
Taskforce reports on regulatory reform
The Taskforce on Innovation, Growth and Regulatory Reform has provided its report on reshaping regulation in the UK to the Prime Minister. The report calls for: a common law approach proportionality in application...
New expert group to help tackle ‘greenwashing’
The Green Technical Advisory Group (GTAG) has been set up to provide independent, non-binding advice to the government on standards for green investment. GTAG will oversee the government’s delivery of a...
EBA consults on the reclassification of investment firms
The Investment Firms Directive ((EU) 2019/2034) (IFD) and the Investment Firms Regulation ((EU) 2019/2033) (IFR) establish a new framework for prudential requirements for investment firms. To aid implementation of the...
FS Act 2021 starts to come into force
The first commencement order for the FS Act 2021 bring into force: on 9 June, sections 3-5 and Schedule 3 on prudential regulation of credit institutions by PRA on 26 June, section 7 and part of Schedule 4 on amendments...
EBA and ESMA update on IFR permitted funds
EBA and ESMA have published a provisional list of additional instruments and funds that some of the smallest investment firms may use as own funds under the IFR. The list is designed to help firms in advance of the IFR...
Market Watch looks at use of orderbook data
The latest edition of Market Watch explains how FCA uses orderbook data to help conduct surveillance to identify suspected market manipulation. It uses its own data combined the STORs and other notifications it...
Ombudsman News looks at annual complaints data
Following the publication of the FOS complaints data for 2020/21, the latest edition of Ombudsman News looks at key trends FOS has seen in a year impacted by Covid-19. Highlights include: Banking – banks’...
ASA rules against Cryptocurrency Ad
ASA has ruled against Luno Money’s poster ad for its cryptocurrency exchange service for failing to contain any risk warning that the value of Bitcoin could go down as well as up, in breach of CAP Code 3.1, 3.3...
ESMA calls for evidence on digital finance
ESMA has launched a call for evidence which aims to gather information on various issues relating to digital finance. It is particularly seeking to understand: more fragmented or non-integrated value chains, which arise...
FOS publishes Annual Complaints Data
FOS has published its annual complaints data for April 2020 – March 2021. Key highlights include: an overall increase in new complaints of 2% from the previous year – but a 58% increase when PPI complaints...
FCA intervenes on high risk CFDs
FCA has stopped ICC Intercertus, a Cypriot firm operating under the TPR, from conducting any regulated or marketing activities in the UK. The firm’s wider group traded as “EverFX” and used the...
FCA orders firm to terminate AR agreements
FCA has published a first supervisory notice to Marshall Sterling Investment Management Limited, requiring it to terminate its relationships with 2 appointed representative firms within 14 days of the notice, and with a...
BoE publishes “Productive Finance” statement
The Bank of England (BoE) has published a statement on the progress of the Working Group on Productive Finance (the Working Group) which was set up in November 2020 by BoE, HM Treasury and FCA. The statement provides a...
Stephen WilsonDormant Assets Bill introduced in Lords
The Dormant Assets Bill has been introduced into the House of Lords and has had its first reading. The Bill proposes expansions to the current scheme to include not only bank and building society assets, but also long...
FSCS confirms 2021/22 levy forecast
FSCS has confirmed its levy forecast for 2021/22 at £833m. This is slightly lower than the indicative levy announced in January, partly because extensions of government support are likely to mean some firms will...
FCA updates supervisory statement on MiFID markets regime
FCA has updated its statement on the operation of the MiFID markets regime post-Brexit to include the latest published non-equity transparency results for the UK. These results cover the 2021 annual bonds threshold...
Up next from FCA
The latest Policy Development Update from FCA heralds: a consultation on a new ESG sourcebook for enhancing climate-related disclosure requirements, coming in June; and a consultation on exit fees in investment...
Financial Services Bill – what changed?
Read our article for Compliance Monitor on the key changes from the original Financial Services Bill to the Act given Royal Assent – and some of the proposals that weren’t included.
FCA fines for financial crime failings in cum/ex trading
FCA has imposed its first fine for failings in cum/ex trading, dividend arbitrage and withholding tax reclaim schemes. It fined Sapien Capital £178,000 for systems and controls failings that led to the risk of...
FCA publishes DP on high risk investment promotions
Following feedback to its Call for Input on Consumer Investments, FCA has published a discussion paper on proposals to strengthen its financial promotion rules for high-risk investments. The paper focuses on three main...
FCA consults on changes to UK MiFID firm organisational requirements
FCA is consulting, as part of its wider capital markets reform work, on a set of changes to the conduct and organisational requirements on research and best execution. The aim is that the rules continue to achieve...
FCA speaks to FLA on post-Covid regulation
Charles Randell, Chair of FCA and PSR has given a speech to the Finance & Leasing Association in which he outlined the ways in which the financial services sector has changed post-Covid and how FCA must adapt to...
FCA concerned about Provident scheme of arrangement
FCA has published a letter setting out its concerns over Provident SPV Ltd’s proposed scheme of arrangement. FCA attended the hearing at which Provident applied to the High Court for permission to hold meetings of...
Commission adopts sustainable finance measures
The European Commission has adopted a package of measures to help improve the flow of money towards sustainable activities across the EU. The package includes: the EU Taxonomy Climate Delegated Act which aims to support...
Commission seeks views on retail investment strategy roadmap
The European Commission has published the proposed ‘Roadmap‘ for its retail investment strategy. The strategy, which forms part of the Commissions September 2020 Capital Markets Union Action Plan, aims to...
FCA publishes statement on approach to Connaught complaints
FCA has published a statement confirming the broad approach it intends to take to complaints made to it in relation The Connaught Income Fund Series 1 and connected companies. The majority of complaints received from...
FCA publishes statement on approach to LCF complaints
FCA has published a statement confirming the broad approach it intends to take to complaints made specifically to it in relation to London Capital & Finance (LCF). This approach will reflect what FCA considers...
Treasury announces mini-bond compensation scheme
HM Treasury has set out details of a scheme to compensate bondholders who lost money due to the collapse of London Capital & Finance (LCF). The scheme will provide 80% of LCF bondholders’ initial investment up...
Treasury consults on regulation of mini-bond issuance
Treasury has published an open consultation on bringing the issuance of mini-bonds (or, as the consultation refers to them “non-transferable debt securities) within the scope of regulation, as part of the package...
FCA stops Cypriot firm offering CFDs in UK
FCA has stopped a Cypriot firm that was operating in the UK under the TPR from conducting any regulated activities in the UK and to close all its trading positions and return money to customers. It found the firm, which...
Financial Services Bill continues in Lords
The House of Lords has continued its scrutiny of the Financial Services Bill during the report stage. The proposals debated on 14 April include amendments to: remove the prohibition under the Market Abuse Regulation on...
FCA responds to Treasury Committee on LCF
Andrew Bailey has responded to the Treasury Committee on aspects of its supervision in respect of the LCF investigation. Key elements of the response looked at: the need for the report to separate accountability with...
FCA feeds back on Open Finance
FCA has published a policy statement following its call for input on Open Finance. The statement looks at how Open Banking is paving the way for more innovation, and notes the large number of regulatory sandbox...
High Court finds company and individual in breach of FSMA
The High Court has delivered a summary judgement after FCA issued proceedings against 24HR Trading Academy Limited and Mohammed Maricar, who ran the firm. It found the firm breached FSMA by providing unauthorised...
Government urged to reduce barriers to UK-EU services trade
The House of Lords EU Services Sub-Committee has published a report which examines the UK-EU Trade and Cooperation Agreement (TCA) and the future UK-EU relationship on trade in services. In terms of financial services...
FMLC responds on cryptoasset regulation
FMLC has responded to Treasury’s call for evidence on the regulation of cryptoassets and stablecoins. Unsurprisingly, it notes many legal uncertainties, not least how to identify a “token”, and...
FCA gives speech on diversity and inclusion
Georgina Philippou, Senior Adviser to FCA on the Public Sector Equality Duty gave a speech at the launch of a report by the Investment Associate and Eversheds entitled “Building Ethnic Diversity and Inclusion in...
Investment Association reports on diversity
The Investment Association has published a report which sets out steps to improve ethnic diversity and inclusion in investment management. The report found that: 75% of firms currently collect, or have begun work...
Complaints Commissioner criticises FCA internal communications
The Financial Services Complaints Commissioner has published a final report in respect of a complaint raised against FCA for failing to keep a complainant informed as to the progress of its investigation into the firm...
Up next from FCA
FCA’s latest Policy Development update heralds the annual consultation on fees in April, and the proposed consultation on exit fees in investment platforms and comparable firms at some stage this year.
FS Bill finishes Lords Committee stage
The Financial Services Bill has finished its discussions at Committee Stage in the Lords. The next stage, the Report stage, has not yet been announced.
IHRP review independent report provided to FCA
John Swift QC, the Independent Reviewer appointed to look at FCA’s regulatory interventions in respect of the sale of of Interest Rate Hedging Products to SMEs. has provided FCA with his draft report. It is...
Proprietary injunction and Bankers Trust Order made in fraud case involving cryptocurrency
In the unreported case of Ion Science Ltd v Persons unknown and others (21 December 2020 – Commercial Court), the Commercial Court granted a proprietary injunction, worldwide freezing order and ancillary...
FCA fines and bans trader for market abuse
FCA has fined and banned a former market making trader for market abuse. Adrian Horn, formerly of Stifel Nicolaus Europe Limited executed trades with himself in a series of 129 wash trades in a particular security over...
FCA publishes details of STORs
FCA has published the number of STORs it received in 2020. There was a small dip at the beginning of the pandemic, but the amounts increased as the year went on, peaking at 421 in October, with a total of 3553 for the...
FCA publishes MiFID 2 product governance review
FCA has published the results of a review that looked at product governance in 8 asset management firms who are manufacturers of products. It examined particularly how the firms take into account the interests of end...
Treasury and FCA discuss perimeter report
Treasury and FCA have met to discuss the September 2020 report on the regulatory perimeter. Discussions focused on: high risk investments and the potential need to review the current exemptions that allow marketing to...
Up next from FCA
FCA’s latest Policy Development Update gives very little indication of any imminent papers, promising only the consultation on exit fees in investment platforms and comparable firms, feedback on the SEAR and a...
ESAs agree PRIIPs KID changes
The ESAs have suggested to the European Commission a package of changes to the PRIIPs KID. The main proposals for change are: new methodologies to calculate appropriate performance scenarios and a revised presentation...
Treasury publishes ToR for ring-fencing and proprietary trading review
Treasury has announced the members of the panel for the review into ring-fencing and proprietary trading. It has also published the panel terms of reference. The panel has around a year to report on the impact of ring...
ESMA goes on product governance drive
ESMA is launching a “common supervisory action” with national regulators to assess progress manufacturers and distributors of financial products have made in applying key product governance requirements...
ESMA consults on MiFID 2 appropriateness and execution-only
ESMA is consulting on guidelines covering key aspects of the MiFID 2 requirements on appropriateness in non-advised services. The paper looks at how different national regulators have dealt with this – and notes...
IOSCO publishes retail complaint handling guidance
IOSCO has published guidance on sound practices in complaint handling procedures for retail customers. The guidance includes a comparative analysis of processes and IOSCO hopes it will help jurisdictions identify and...
UK makes Swiss MiFIR equivalence rules
The Markets in Financial Instruments (Swiss Equivalence) Regulations 2021 take effect on 3 February, and designate BX Swiss AG and SIX Swiss Exchange AG as “equivalent” for the purposes of trading under...
ESMA reminds firms about MiFID 2 reverse solicitation and Brexit
ESMA has written to firms noting that some “questionable practices” around reverse solicitation in the context of MiFID 2 have become apparent since Brexit. It gives as an example, pop up “I...
UK Government announces expansion of the Dormant Assets Scheme
The UK Government has announced the expansion of the Dormant Assets Scheme, which is a major boost as the UK recovers from the coronavirus pandemic. £800 million is set to be made available to communities across the UK...
Market Watch on recordings and alternative working arrangements
The latest edition of FCA’s Market Watch looks at FCA’s expectations on firms on recording telephone conversations and electronic communications while alternative working arrangements are in place. FCA had...
PRA consults on supervision of international banks
The PRA is consulting on proposals regarding its approach to supervising the UK activities of PRA-authorised banks and designated investment firms that are headquartered outside of the UK. This includes those firms...
FCA publishes Covid resilience survey results
FCA has published the results of the survey it sent to 23,000 forms on the real-time effect the pandemic is having on their resilience. Among its conclusions are: failures of firms due to the economic downturn are...
FCA reminds firms to be prepared for Brexit
With the end of the Brexit transition period in sight, the FCA has issued a press release reminding firms to be prepared. The FCA expects firms to have assessed the impact of the changes that will take effect, on both...
FCA fines Charles Schwab over client asset failings
FCA has fined Charles Schwab UK Ltd nearly £9m for failing adequately to protect client assets, carrying out a regulated activity without permission and making a false statement to FCA . FCA found the firm changed its...
ESMA publishes cloud outsourcing guidelines
ESMA has published its final report on outsourcing to cloud service providers. The guidelines cover: risk assessment and due diligence on providers; governance, organisational and control frameworks for monitoring CSP...
Final reports on FCA supervision of LCF and Connaught make damning reading
The Government has published its final report on the outcome of the Independent Investigation into FCA’s regulation and supervision of London Capital & Finance plc. Dame Elizabeth Gloster delivered her report...
Treasury updates special resolution code
Treasury has updated its code of practice that sets out the tools and powers available under the Banking Act 2009 in respect of the special resolution regime.
FCA makes Remuneration Code changes
FCA has published its final rules on updating the dual-regulated firms’ Remuneration Code to reflect CRD V. It has finalised its guidance on proportionality for the dual-regulated firms code, and published a set...
FCA fines and bans individual for market abuse
FCA has fined a former portfolio manager, partner and CIO £100,00 and banned him as a result of market abuse. Corrado Abbattista worked for Fenicial Capital Management LLP. FCA found he had created a false and...
BoE Financial Stability Report
The Bank of England published the Financial Stability Report for December. The report sets out the Financial Policy Committee’s view on the stability of the UK financial system and what it is doing to remove or...
FCA consults on prudential regulation of MiFID firms
FCA is consulting on the first phase of its proposed rules for the UK Investment Firm Prudential Regime, aimed at simplifying the prudential requirements for solo-regulated firms that fall within MiFID and are subject...
FCA fines firms for unsuitable pensions advice
FCA has fined LJ Financial Planning Ltd £107,200 for recommending that 114 customers transfer their pensions to the value of around £6m into SIPPs over a period of nearly 3 years from March 2010. FCA found the firm...
FCA confirms mini-bond marketing ban
FCA has confirmed that it will permanently ban marketing of speculative illiquid securities, including mini-bonds, to retail investors, from 1 January 2021. The permanent rules will also include a ban on listed bonds...
PRA consults on designating firms within certain banking UK consolidation groups
The PRA has published a consultation paper setting out its proposed approach to designating entities within certain banking UK consolidation groups as responsible for ensuring that consolidated prudential requirements...
PRA publishes feedback on recovery planning consultation
The PRA has published a Policy Statement providing feedback to responses to the PRA’s consultation on simplified recovery planning, as well as the PRA’s final policy decision. The respondents were supportive...
PRA notes FCA “long-term absence” consultation
PRA has drawn the attention of firms to a joint chapter in FCA’s latest quarterly consultation on clarifying regulatory expectations for temporary long-term absences. The regulators plan to clarify what they...
FCA updates on MAR and Brexit
The FCA has updated its website to explain what will happen to the EU Market Abuse Regulation (EU MAR) after 31 December 2020. At the end of the transition period, EU MAR will be onshored into UK law by virtue of the...
FCA publishes RDR and FAMR evaluation
FCA has published an evaluation of the impact of the RDR and FAMR. On the whole, it found a positive impact. It notes that the FAMR has: led to a small increase in the number of adults who receive financial advice, and...
FCA launches UK Benchmarks Register
In preparation for the end of the Brexit transition period, FCA has announced the launch of the new UK Benchmarks Register. The Register, which can be accessed from 11pm on 31 December 2020, will replace the ESMA...
FCA writes portfolio letters to SIPP operators
FCA’s latest portfolio supervision letter is to SIPP operators. In the letter, FCA notes that, when SIPPs were originally launched, they were designed for higher net worth individuals looking to manage their own...
FOS loses judicial review hearing
The Court has found against FOS in a judicial review hearing brought by a forex firm. TF Global Markets (UK) Ltd has suspended a number of accounts, including those of three individuals who subsequently complained to...
HM Treasury extends consultation deadlines
Financial Services Future Regulatory Framework Review Phase II Consultation – further to the consultation document published on 19 October 2020, the consultation has been extended by one month to 19 February 2021...
EU statement on EU-Japan Joint Financial Regulatory Forum
The European Commission has published a statement on the second meeting of the EU-Japan Joint Financial Regulatory Forum which took place on 20 November. Topics of discussion at the meeting included the impact of Covid...
LCF report due to be published before Christmas
In a statement to Parliament, John Glen confirmed that Dame Elizabeth Gloster has delivered her final written report on her investigation into London and Capital Finance to FCA. He has asked FCA now to work with...
FCA fines FX options broker for market misconduct
FCA has fined TFS-ICAP Ltd £3.44m for communicating misleading information to clients. It found that over a 7 year period brokers at the firm had “printed” trades – which meant the told clients a trade...
FCA consults on use of FSB Benchmark powers
FCA is consulting on how it proposes to use its new powers under the FS Bill to ensure an orderly wind-down of LIBOR, following the announcement by ICE Benchmark Administrations that it plans to cease its euro...
ECON reports on proposed amendments to MiFID II
In July 2020, the European Commission published a proposal for a Directive to amend the MiFID II Directive (2014/65/EU) to assist the EU’s economic recovery from the Covid-19 pandemic. The European Parliament’s...
FSB publishes 2020 Resolution Report
The Financial Stability Board (FSB) has published its 2020 Resolution Report which highlights the need for resolution preparedness. It also looks at lessons learnt from the Covid-19 pandemic, which stressed the...
Regulators update on FS Bill reforms
Treasury, PRA and FCA have updated the industry on the planned timelines for the introduction of the UK Investment Firms Prudential Regime and implementation of remaining Basel 3 reforms. The targeted implementation...