FCA has reported on the practices of ‘flying’ and ‘printing’ in Market Watch 76. It has described these practices (which it originally raised in Market Watch 57) as: ‘Flying’ is...
Category - Supervision
Vida FatemiBoE updates enforcement approach
BoE has published its final policy and feedback to its consultation on its approach to enforcement. We covered the consultation here. The changes (including changes from the original consultation that BoE has made in...
PRA fines for deposit protection failings
PRA has fined 2 entities in the HSBC group £57m for long-lasting historic failure properly to implement its Depositor Protection Rules. The failings occurred in HSBC Bank plc (HBEU) between 2015 and 2022, and in HSBC UK...
Emma RadmoreFCA publishes TPR data
The FCA has published summary data on the firms that entered the TPR and on those which have successfully secured full UK authorisation: 1,191 solo-regulated firms entered the TPR, spanning 29 jurisdictions and covering...
Lucy HadrillFCA confirms rule updates
FCA’s latest Handbook Notice confirms rule changes its Board agreed in December, and the new motor finance complaints rules, as well as two changes agreed on 25 January. The two latest changes: update SUP 12.4...
BoE speaks on core payments infrastructure and policies
Victoria Cleland, Executive Director for banking, payments and innovation, spoke about how BoE is enhancing its core payments infrastructure and policies using technological innovation. The focus was on wholesale...
PRA reviews ring-fencing rules
PRA has published a report setting out conclusions to its review of its ring-fencing rules. PRA looked at the intents of the ring-fencing regime, its statutory objectives, the legal ring-fencing requirements and...
No firm decision on digital pound
The BoE and Treasury response on the consultation paper on the possible introduction of a digital pound say that there has been no final decision on whether the UK will introduce a CBDC. The regulators will continue...
FCA publishes guidance on motor finance complaints
FCA has published a new page on its website giving guidance to firms on what it expects of them, if they are affected by the DCA review. The guidance covers: keeping customers informed: responding in line with existing...
FCA social media guidance running late
FCA had initially planned to publish its guidance how its financial promotion requirements apply to promotions on social media before Christmas, but has updated its website to say it now plans to publish the finalised...
BoE responds on PRC remit
BoE Governor Andrew Bailey has written to the Chancellor, updating last year’s response to the letter setting out the Chancellor’s recommendations to the Prudential Regulation Committee (PRC). The letter...
FCA speaks on consumer tech
Chief Executive of FCA, Nikhil Rathi, has spoken on how consumer-facing technology helps to keep consumer markets “honest”. The key highlights from his speech were: FCA must use and adapt existing regulatory...
PRA consults on solvent exit planning for insurers
The PRA has issued a Consultation Paper (CP2/24) outlining proposals for PRA-regulated insurers to prepare for an orderly ‘solvent exit’ as part of their business-as-usual activities. The PRA aims to enhance...
FIN. TeamCorporate Transparency and Companies House – 2024 changes
We’ve written this article on the changes to the role of Companies House in improving corporate transparency under the EECTA from March.
Suzanne GadoBSA hopeful of update to 1986 Act
The Building Societies Association welcomed the upcoming 2nd reading of the Building Societies Act 1986 (Amendment) Bill which will take place on 19 January. The Bill aims to put building societies on a level playing...
FCA Practitioner Panel responds to D&I proposals
The FCA Practitioner Panel has responded to CP23/20, the consultation paper on diversity and inclusion in the financial sector. Key points in the response include: Mandating that firms collect data across all...
FCA establishes industry-led working group for financial advisers
As part of a package of measures to support the UK’s position as a world-leading, competitive centre for asset management and sustainable investment, the new industry-led working group for financial advisers is...
FCA sets expectations on crowdfunders
In two portfolio letters, FCA has set out its expectations for Loan-based Peer-to-Peer (P2P) Lending platforms and Investment-based crowdfunding platforms. It supervises both types of platform in the Consumer...
PRA writes to international banks on 2024 priorities
In a ‘Dear CEO’ letter, PRA has updated international banks and designated investment firms on its 2024 priorities. As with the other letters published today, the general themes will complement firm-specific...
PRA writes to insurers on supervisory priorities
Charlotte Gerken and Shoid Khan of PRA have written to insurers on PRA’s 2024 supervisory priorities. As with banks, the letter complements firm-specific communications from PRA following its periodic summary...
PRA consults on FSCS MELL 2024/25
PRA is consulting on the FSCS MELL for 2024/25. Under FSMA, PRA and FCA must set a limit for the total management expenses that the FSCS can levy on financial services firms. The MELL is the maximum amount that the FSCS...
PRA writes to deposit takers on 2024 priorities
David Bailey and Laura Wicks of PRA have written to UK deposit takers about supervisory priorities for 2024. The Dear CEO letter stresses that this sets out the regulator’s thematic priorities, and complements its...
Treasury consults on enhancements to the Special Resolution Regime
HM Treasury has issued a consultation on proposals for enhancing the Special Resolution Regime (SRR). Specifically, the consultation seeks views on plans to introduce a new mechanism to facilitate the use of certain...
Duncan ScottFCA takes action on motor finance complaints
FCA is unhappy that motor finance firms are rejecting high numbers of consumer complaints about commission arrangements. After FCA banned discretionary commission arrangements in 2021, many consumers complained and...
PRA writes to Treasury Committee on resourcing and CCyB increase impact
Sam Woods has written to Harriet Baldwin at the Treasury Committee in response to the Committee’s queries on resourcing of the PRA in relation to approval of firms’ IRB approaches and the impact of the...
FCA updates on Rule Review Framework
FCA has published its finalised Rule Review Framework. FSMA 2023 requires FCA to set this framework, which applies to all its Handbook rules, and explains how FCA sets, measures and monitors the outcome of the rules. It...
Responses to D&I in the Financial Services Sector
Following UK Finance’s response, several further responses to the PRA and FCA consultation papers (CP 23/20 and PRA’s CP 18/23) share insights into diversity and inclusion in the financial services sector...
FCA reflects on 2023
Nikhil Rathi has reflected on some of FCA’s key achievements and milestones from 2023. He highlighted: the implementation of the Consumer Duty and changes firms have already made as a result; FCA telling GAP...
UK and Switzerland sign groundbreaking cooperation agreement
The new Berne Financial Services Agreement will permit UK and Swiss financial services businesses to provide services more easily to each other’s domestic markets. Each country will mutually recognise the...
UK Finance responds on D&I
UK Finance has published its responses to the PRA and FCA papers on D&I in the financial sector. Key points in its response include: that the regulatory approach in terms of transparency and accountability should...
FCA updates on retained EU laws
FCA has updated its website with details of the current state of play in relation to the repeal and replacement of retained EU laws in the financial services sector. Coming up in 2024 will be many changes and papers...
BoE consults on use of requirements on FMIs
The BoE is consulting on how it plans to use its powers under FSMA 2023 to place requirements on CSDs and CCPs mandating that they take, or don’t take, a particular action. It must use its power proportionately...
Regulators publish 2023 cyber findings
The BoE, PRA and FCA have published their latest annual CBEST thematic report. The report, which has been published in full for the first time, contains cyber resilience good practice, lessons learned and insight...
BoE and CMA agree new MoU
The BoE and CMA have, for the first time, agreed a memorandum of understanding on how the two organisations will work together to help them achieve their statutory objectives. The MoU sets out agreed principles on...
PRA consults on omnibus reserve rules
PRA is consulting on new rules that will exclude reserves held on omnibus accounts (where the central bank reserves of several participants are comingled in a single account) from the leverage ratio, and consequential...
Complaints Commissioner criticises FCA over Premier FX failure
The Complaints Commissioner has published its report on complaints from people affected by the 2018 collapse of Premier FX Limited. The payments firm had failed when, following the death of its sole director, it...
BoE publishes FMI supervision report
BoE has published its annual report on its supervision of FMIs. The report looks at what FMIs are, and BoE’s supervisory focuses over the past year. Its priorities for the future will include enhancing both...
Regulators update margin standards
PRA and FCA have confirmed updates to the Binding Technical Standards on margin requirements for non-centrally cleared derivatives. The changes, which take effect from 18 December: extend the temporary exemption from UK...
Treasury makes Digital Sandbox Regulations
Treasury has made Regulations under FSMA 2023 to create the digital securities sandbox under which firms can apply for a place to test developing technology to help FMI activities. The sandbox is open to UK Recognised...
New Complaints Commissioner for 2024
Rachel Kent has been appointed the new Financial Regulators Complaints Commissioner. This is the first Commissioner appointment made by Treasury, as a result of changes in FSMA 2023. She starts a 5 year appointment on...
Government revokes more retained EU laws
The fourth Commencement Order of FSMA 2023 brings into force various provisions of the Act, and revokes a long list of retained EU legislation from 1 January 2024. Other provisions that come into force on that date...
FCA makes new rules
FCA has published new rules including amendments to: introduce the requirements on Sustainability Labelling and Disclosure (from 28 November 2023) update SYSC from 8 December in respect of changes to the proportionality...
FCA finalises new rules to replace IDD
FCA has published its policy statement and final rules which will replace the IDD Delegated Regulations with rules and guidance in the FCA Handbook. The Regulations included: the standardised IPID format; product...
BoE updates resolution approach
The BoE has set out the framework it would use to resolve failing banks, building societies and dual-regulated investment firms. It has updated its “Purple Book” which explains all the key features of the...
FOS data shows vehicle-related complaints on the increase
The latest FOS product complaints data, covering July – September, shows that complaints relating to vehicle issues account for a quarter of all complaints. Complaints about vehicle finance are at a 5-year high...
PRA publishes consent modification for pure reinsurance branches
PRA has published an update to its Modification by Consent which has been available for pure reinsurance third country branches since Brexit. The current MbC is due to expire on 31 December, and PRS is offering an...
FCA publishes Consumer Duty retail banking review
FCA has published its conclusions from a multi-firm review it carried out in the retail banking and lending sector, to help it understand how firms had approached reviewing their products and services against the...
PRA publishes letter to CROs on underwriting profit allowed in firms’ IMs
On 11 December 2023, the PRA published a Letter to general insurers’ chief risk officers (CROs) outlining the findings of its 2023 thematic review of expected underwriting profit allowed for in firms’...
FCA demands action on retained interest on customers’ cash balances
FCA has written a ‘Dear CEO’ letter to investment platforms and SIPP operators setting out its concerns on the way they deal with any interest earned on customers’ cash balances. After surveying 42...
PRA publishes near-final policy statement on Basel 3.1 standards implementation
The PRA has published a near-final policy statement which provides feedback to responses to various chapters in CP 16/22. In CP 16/22, PRA set out proposals to implement the parts of the Basel 3.1 standards that remain...
PRA Publishes Solvency II Review Considerations for year-end 2023
The PRA has published its Solvency II Review Considerations for year-end 2023. The statement outlines the upcoming changes to HM Treasury (HMT) and the Prudential Regulation Authority’s (PRA)’s Solvency II...
NAO encourages FCA to manage risks better
The National Audit Office has published a report looking at how FCA deals with its new responsibilities and past regulatory failures. The report says FCA is making good progress and has made significant changes, but it...
PRA updates on SDDT waivers
PRA has updated its website to include firms for the modifications by consent that Small Domestic Deposit Takers can apply for from 1 January 2024, together with its Directions relating to them. The modifications are...
PRA consults on approach to policy
Building on its 2022 discussion paper, the PRA is now consulting on its approach to policy. The paper sets out the PRA’s approach on: its primary and secondary objectives, including its new secondary...
FCA outlines aims for consumer investments policy initiatives
As a continuation of its Consumer Investments Strategy (CIS), the FCA has set out the direction of travel for its consumer investments initiatives. It will focus on the following five core initiatives: accessible...
Treasury response on regulator secondary objectives
In May, Treasury published a call for proposals on which metrics the FCA and PRA should publish in relation to the secondary growth and competitiveness objectives introduced under FSMA 2023. In its formal response to...
Different perspectives on Edinburgh Reforms progress
While the Treasury has heralded the progress made since the Edinburgh Reforms were announced a year ago, the Treasury Committee is less pleased. The Economic Secretary to the Treasury, Bim Afolami, focussed on the...
FCA consults on access to cash
FCA is using its powers under FSMA 2023 to consult on new rules to require designated banks and building societies to assess gaps in access to cash and act to fill them. FCA says that, currently, over 95% of people in...
Regulators consult on critical third party supervision
BoE, PRA and FCA are consulting on how to oversee the resilience of critical third party service providers, where those providers service UK regulated firms and FMIs. The debates leading up to the introduction of the...
Financial Stability report shows same challenges remain
The December 2023 Financial Stability Report shows little change from the previous version. Conditions remain challenging and households and businesses continue to face higher borrowing costs. However, the banking...
PRA and FCA confirm remuneration changes for small firms
PRA and FCA have published feedback on their consultations on enhancing proportionality in respect of the remuneration rules in respect of dual-regulated and small firms. While the regulators needed to feed back...
FCA updates on LIBOR transition powers
On 1 January 2018 the EU Benchmark Regulation (BMR) took full effect. Following the UK’s withdrawal from the EU and the end of the transition period, the BMR has been brought into UK law (UK BMR). Under the UK BMR, FCA...
Harshil PatelFCA consults on updating Money Market Funds regime
The FCA has published its consultation paper (CP23/28) setting out its proposals to enhance the resilience of Money Market Funds (MMFs) based in the UK. It has been developed in collaboration with the Treasury and the...
PRA publishes simpler-regime firms policy statement
The BoE has published its Policy statement: The Strong and Simple Framework: Scope Criteria, Liquidity and Disclosure Requirements (PS15/23) (5 December 2023) incorporating feedback from consultations regarding...
PRA consults on step-in risk assessments
PRA is consulting on proposed changes to rules and policy that will require CRR firms and consolidation entities that are not classified as small domestic deposit takers to regularly assess their step-in risk –...
FCA publishes quarterly consultation
FCA has published its regular quarterly consultation (CP23/25: Quarterly Consultation Paper No. 42) on proposed miscellaneous amendments to its Handbook. FCA is proposing to consult on making: amendments to the TC...
MoU between FCA and OFSI
On 1 December 2023,FCA published a Memorandum of Understanding (MoU) (dated 21 November 2023) between it and OFSI. The MoU sets out the collaboration and information exchange between FCA and OFSI. It replaces the...
FCA publishes regulatory initiatives grid
The FCA has published the Financial Services and Regulatory Initiatives Forum’s latest biannual Regulatory Initiatives Grid. This will allow the financial services industry and other stakeholders to understand and...
BoE consults on wholesale cash distribution market oversight
Following its commitment to safeguard access to cash across the UK, the Government granted the BoE powers to ensure that the wholesale cash distribution infrastructure remains effective, resilient and sustainable as...
FCA speaks on importance of culture and conduct
Emily Shepperd, FCA COO and Executive Director of Authorisations stressed that firms must consider how their own cultures can drive better outcomes. Key highlights of the speech include: How the Consumer Duty has raised...
BoE publishes fees regime for financial market infrastructure supervision
BoE has responded to consultation on Fees regime for financial market infrastructure supervision 2023/24, fee rates for the 2023/24 fee year and statement of policy. In its original consultation, the Bank put forward...
PRA and FCA consult on reformatted control change guidance
PRA has published a consultation paper containing proposals on how it and FCA plan to replace the EU guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector...
FCA publishes final report on IFPR implementation observations
FCA has published the final report on its review into firms’ progress in implementing the ICARA process and reporting requirements under the IFPR. The IFPR was introduced to streamline and simplify the prudential...
FSB publishes 2023 G-SIB list
FSB has published the 2023 list of globally systemically important banks (G-SIBs) using end-2022 data and applying the assessment methodology designed by the Basel Committee on Banking Supervision (BCBS). Compared to...
UK Finance reports on impact of AI in financial services
UK Finance has published a report that looks at the uses of AI in the financial sector. The report covers: how and where AI is being deployed; where there is promise for the future; how to make more of opportunities;...
Autumn Statement: financial regulatory issues
The Government’s Autumn Statement covered several new and ongoing actions relevant to the financial services sector, including: legislation to replace retained EU, mainly in the markets space (securitisations...
Government publishes PRIIPs replacement legislation
The Government has published draft legislation that will replace the PRIIPs Regulation and create a new UK retail disclosure framework for “consumer composite investments” (CCIs). The initiative is part of...
Treasury feeds back on Digital Securities Sandbox
Treasury has published the outcome to the consultation on a digital securities sandbox. The sandbox will be operated by BoE and FCA and is intended to help facilitate the use of digital asset technology in UK financial...
Treasury publishes Future of Payments Review
Treasury has published its Future of Payments Review, commissioned from Joe Garner, as part of the Autumn Statement package. The review asked: what are the most important consumer retail payment journeys both today and...
FCA consults on fee policy
FCA is consulting on its policy proposals for the 2024/5 fee year. For application fees, FCA did not increase these fees last year, but now feels it is appropriate to do so as its costs for processing applications are...
FCA updates AR pages
FCA has updated the page on its website that provides information for principals of ARs. The main purpose of the additions is to remind firms of the need to comply with the Consumer Duty if they have retail customers...
FCA speaks on importance of culture
Sheree Howard, FCA’s Executive Director of Risk and Compliance Oversight spoke about the importance of the execution of a plan being as vital as its ideology and purpose. She said firms must look at whether they...
FCA updates on secondary credit broker expectations
FCA has a new page on its website for secondary credit brokers, on which it sets out what it expects from applicants, including the difference between limited permission and full permission firms. The page links to...
FCA secures conviction of mortgage fraud broker
Larry Barreto, who had already pleaded guilty to 2 offences of arranging and advising on regulated mortgages without FCA authorisation, has been found guilty of 11 charges of fraud by false representation. For a period...
Lords recommends new Regulation Committee
The House of Lords Liaison Committee has recommended that a new financial services regulatory committee be created whose remit will be to look at financial regulation generally and particularly to scrutinise financial...
PRA writes to CFOs on Deposit Aggregators
PRA has written a letter to CFOs setting out the steps firms should consider taking to mitigate risks relating to deposit aggregators that firms may have relationships with. This follows a ‘Dear CEO’ letter...
PRA makes statement on recalculation of TMTP
The Solvency II Regulations 2015 allow firms to apply to the PRA for permission to undertake a recalculation of the deduction applied pursuant to the transitional measure on technical provisions (TMTP) every 24 months...
PSR consults on Direction review mechanism
PSR is consulting on the way in which it reviews its general directions and generally imposed requirements. FSMA 2023 has added new requirements for PSR to keep these under review and publish statements of policy about...
BoE launches new stress test phase
BoE has published the latest phase of the System Wide Exploratory Scenario, which it first launched in June. The SWES is intended to help BoE understand the risks to and from non-bank financial institutions, and the...
FSCS updates on levy and forecast
FSCS has published its latest “Outlook” newsletter. FSCS does not expect to request any additional levies from firms during the current financial year and will carry forward any surpluses in any class to...
UK Finance responds on SME lending
UK Finance has responded to the Treasury Select Committee call for evidence on availability of finance for SMEs. Its response notes that 2022 saw the highest SME lending since comparable records began in 2012, on the...
Regulators consult on BoE levy regulations
the BoE and Treasury are consulting on how to implement the new levy based arrangement which will replace the Cash Ratio Deposit scheme. Deposit-taking firms (except credit unions and friendly societies) with eligible...
FCA portfolio letter to wealth managers and stockbrokers
FCA has published its Dear CEO letter to wealth management and stockbroker firms setting out its supervisory priorities and expectations for the sector. The letter focuses on financial crime prevention and Consumer Duty...
Treasury to update Fin Prom exemptions
Following its consultation on exemptions in the FPO for promotions to high net worth individuals and sophisticated investors, Treasury has decided to make some updates. It will: increase the financial thresholds needed...
Applications open for fin proms gateway
On 6 November, the application window for the FCA’s financial promotions gateway opened. Firms now have three months to apply for approver permission if they want to continue approving financial promotions for...
FCA updates on fin prom data
FCA has published data for the quarter ending September 2023 on its actions against breaches of financial promotion rules and referrals and investigations into unauthorised activity. During the period: FCA actions...
FCA publishes crypto marketing guidance
FCA has published guidance it hopes will support firms complying with the new rules on crypto promotions. It is aimed both at registered crypto firms making promotions and at authorised forms who are communicating or...
FCA speech: next steps for Consumer Duty
Nisha Arora (Director of Cross Cutting Policy and Strategy at the FCA) has delivered a speech on the Consumer Duty and the next steps for firms. The speech highlighted the following examples of good practice identified...
FCA writes to RemCo chairs
FCA has written a “Dear Chair” letter to the chairs of Remuneration Committees of proportionality level one dual regulated firms. The letter: stresses that in times of continuing cost of living pressures...
FCA takes action on BNPL terms as product use grows
FCA has taken action using its powers under the CRA against potentially unfair terms in unregulated BNPL contracts issued by PayPal and QVC. It said it is particularly important to make sure consumers have the right...