Qualifying securitisation | What is it and what does it mean for the market?

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The EU Commission is expected to bring forward a legislative proposal in September 2015 on ‘high-quality’ securitisation as part of the Capital Markets Union. The Commission has taken the view that it may be possible to incentivise the issuance of high quality securitisation through a differentiated capital charge relative to standard securitisation. This in turn could help re-invigorate the European securitisation market.

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Posted on 29/06/2015 | 0 Comments

Banking: The drivers of legal issues

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Merely the cost of doing business? Governments and regulators certainly hope not. It’s been another big year for bank penalties – and we are only half way through.  On 20 May 2015, record fines of £3.6bn were levied on six of the world's largest banks for charges including manipulating the foreign exchange market.  We have analysed the annual reports of 14 major European banks1  in an attempt to understand more fully the drivers and trends of bank legal costs. 

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Posted on 17/06/2015 | 0 Comments

The Fair and Effective Markets Review|Fundamental change in FICC markets

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HM Treasury, the Bank of England and the Financial Conduct Authority have delivered the final report on the Fair and Effective Markets Review (FEMR), a broad and comprehensive analysis of the fixed income, currency and commodities (FICC) markets. The review seeks to identify the root causes of the recent misconduct and other sources of perceived unfairness in FICC markets, evaluate the impact of regulatory reforms, and make recommendations to fill the remaining gaps.

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Posted on 12/06/2015 | 0 Comments

Individual and collective responsibility|Rewriting Agatha Christie

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When it comes to talking about the new Senior Managers Regime (SMR) for banks, both Andrew Bailey and Martin Wheatley have taken to referring to Agatha Christie’s “Murder on the Orient Express”, characterising the SMR as putting an end to the “safety in numbers” defence. Fans of the novel and film will recall that 12 people enter the victim’s darkened train compartment and take it in turns to stab him. As Poirot observes “They themselves would never know which blow actually killed him”. This may strike readers as rather an extreme example. More prosaically, however, the regulators want to remove ambiguity - for perfectly understandable reasons - and to be able to hold individual Senior Managers to account when things go wrong on their watch. It should always be clear “whodunnit”.

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Posted on 10/06/2015 | 0 Comments

The Financial Conduct Authority goes prudential

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Last week the FCA held its first ever Prudential Supervision Forum.  Now whilst it might be surprising to some that the FCA supervises firms on a prudential basis, as they have not been making loud noises about it, other firms are certainly aware of this fact.  As the Head of Specialist Supervision pointed out the FCA prudentially supervises approximately 24,000 firms making their views on issues such as CRD IV key for asset managers, broker dealers and AIFM firms alike.

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Posted on 22/05/2015 | 0 Comments

The PRA’s approach to branch supervision: Implications for regulatory reporting

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Last year, the PRA set out a new approach to the supervision of international banks and clarified how their new branches in the UK will be scrutinised going forward.

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Posted on 22/05/2015 | 0 Comments

The SSM six months on | How banks are getting on and what lies ahead

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The start of May marked six months of operation for the Single Supervisory Mechanism (SSM), the new framework for banking supervision in the Eurozone. The largest banks in the SSM have had their first taste of ECB-led supervision. The learning curve for them - and for supervisors at the ECB and national authorities - has been steep. And just as banks grapple with the task of responding to the new regime, the ECB has started tackling its supervisory priorities for 2015.

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Posted on 15/05/2015 | 0 Comments

Management information for conduct risk: Underpinning better decision-making

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Regulators are placing increasing emphasis on the management of conduct risk within financial services firms. Central to this is the right management information (MI). The importance of MI is also set to increase in the UK under the Senior Managers Regime (SMR) and Senior Insurance Managers Regime (SIMR), where strong conduct risk MI will help Senior Managers to demonstrate that they have taken reasonable steps to understand conduct risks and that they have put in place appropriate controls.

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Posted on 29/04/2015 | 0 Comments

The FCA’s Coverholder and TPA thematic review | Market solutions and commercial challenges

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This is the final part of a four-part blog series on the FCA’s Coverholder and TPA thematic review (often referred to by the FCA as its “distribution chain” thematic review).

Firms are achieving workable conduct solutions for delegated authorities in a number of ways, whether it’s by updating existing controls to add a conduct lens; increasing the evidence and documentation around existing practices; or by designing new aspects of control and oversight. 

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Posted on 28/04/2015 | 0 Comments

Reporting requirements are expanding rapidly

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In recent years we have seen a seismic shift in the tax transparency landscape. The US Foreign Account Tax Compliance Act (US FATCA) has proved to be a watershed moment and we are rapidly moving towards a global network of automatic information exchange spearheaded by the OECD’s Common Reporting Standard (CRS).

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Posted on 14/04/2015 | 0 Comments

Automation will change the character of London businesses | How will Financial Services adapt to the new environment?

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Since the Industrial Revolution, technological advances have transformed business and commerce, and changed the character of jobs that people do. With the rapid progress of digitisation, a further period of major transformation is under way. London, its Financial Services industry included, will inevitably feel the change and will need to respond.

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Posted on 1/04/2015 | 0 Comments