PSD2 RTS on authentication and communication | The devil is in the (lack of) details

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Following the entry into force of the revised Payment Systems Directive (PSD2) on 12 January 2016, in August the European Banking Authority (EBA) published the draft regulatory technical standard (RTS) to define how, in practice, Access to Accounts for Third Party Providers (TPPs) 1 and enhanced security and authentication requirements, two key pillars of the directive, will be implemented.

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Posted on 29/09/2016 | 0 Comments

PRIIPs delay looking more likely but implementation timeline still challenging

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On 14 September, the EU Parliament voted to reject the EU Commission’s Delegated Regulation on the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs). This is the first time that the EU Parliament has formally rejected technical rules on financial services legislation. The Delegated Regulation, based on the final draft Regulatory Technical Standards (RTS) prepared by the European Supervisory Authorities (ESAs), dated 31 March 2016, was rejected as “so flawed and misleading that it could actually lose [retail investors] money”. MEPs overwhelmingly passed the resolution rejecting the RTS (by 602 votes to 4, with 12 abstentions), calling for the EU Commission to submit a new RTS taking into account the EU Parliament’s concerns about the text. The Parliament also called on the EU Commission to postpone the application date of PRIIPs.

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Posted on 20/09/2016 | 0 Comments

Marketplace lending | What’s the user perspective?

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Deloitte’s report Marketplace lending – a temporary phenomenon?” explores whether marketplace lenders (MPLs) represent a truly disruptive threat to the UK banking industry. As part of our research, we commissioned YouGov to carry out a survey of individuals and small and medium-sized enterprises (SMEs) to find out more about the awareness, usage and growth potential of marketplace lending in the UK.I

 

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Posted on 13/09/2016 | 0 Comments

Tackling misconduct risk | Financial Stability Board’s areas of focus and forward agenda

Tackling misconduct risk

As is now customary, the Financial Stability Board (FSB) published a slew of reports ahead of the G20 Leaders’ Summit in Hangzhou. These documents included a second progress report, published on 1 September, on measures to reduce misconduct risk in financial services. This follows a workplan agreed in May 2015, and a first progress report in November 2015. The latest report describes progress made since the end of 2015.

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Posted on 07/09/2016 | 0 Comments

Notification of Conduct Rule breaches | Holding individuals to account

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Firms subject to Senior Managers and Certification Regimes (SMCR) are obligated to capture, assess, and report breaches of Conduct Rules by individuals who are in scope of the rules. Holding individuals to account is a core concept of the new regime.

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Posted on 02/09/2016 | 0 Comments

Payment protection insurance complaints | The road ahead

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The Financial Conduct Authority (FCA) has published its further consultation paper on the future of payment protection insurance (PPI) complaints. CP 16/20 adds further detail to the regulator’s plans to bring the ongoing issues raised by the historic sales of PPI to an orderly close, with a final date for making new complaints now estimated for June 2019.

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Posted on 30/08/2016 | 0 Comments

Marketplace lending 101

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A perfect storm

In the wake of the global financial crisis, UK banks pulled back from lending, owing to higher regulatory capital requirements and greater regulatory and shareholder scrutiny of their business models.  They have adopted more risk-averse lending strategies in this environment, with more stringent reviews of the creditworthiness of borrowers.

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Posted on 25/08/2016 | 0 Comments

Risk Weight Lifting | Capital Injection?

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Amongst mortgage lenders, variations in banks’ Risk Weighted Assets (RWAs) are observed in the market. This information is published in firms’ Pillar 3 disclosures, as well as by the Prudential Regulation Authority (PRA). As an example, in January 2015 the PRA reported performing risk weights ranging from 10.8% to 14.6% for performing residential mortgages with 70%-80% Loan To Value (LTV) amongst firms using the Internal Ratings Based (IRB) approach to calculating RWAs. The variations lend credence to a distrust of banks’ internal models by regulators, shareholders and the general public.

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Posted on 24/08/2016 | 0 Comments

FSB proposes recommendations to address systemic risk from asset management activities

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The Financial Stability Board (FSB) has consulted on policy recommendations for addressing structural vulnerabilities from asset management activities. This follows a long debate at international level involving both the FSB and the International Organization of Securities Commissions (IOSCO). The FSB’s proposed recommendations relate to risks arising from liquidity mismatch, leverage, operational issues in transferring investment mandates in stressed conditions, and indemnifications related to securities lending.

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Posted on 20/07/2016 | 0 Comments

A vote to leave the EU | Considerations for financial services firms

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The UK has voted to leave the European Union (EU). Uncertainty in financial markets and among the business community is understandably very high. Today, there are many more unknowns than knowns – especially about how financial services firms operating in the UK will access and trade with the EU’s Single Market in future.

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Posted on 24/06/2016 | 0 Comments

A smart approach to reporting

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The introduction of multiple reporting requirements under different regulations and on different timelines should prompt banks and investment firms to think strategically when implementing regulatory changes and when improving existing reporting processes. In particular, they should consider the potential overlaps and synergies across these reporting requirements, assess the capabilities of their current practices and IT infrastructure, and work out how they can capitalise on the use of reporting data for their own purposes.

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Posted on 16/06/2016 | 0 Comments