Capital Markets in Financial Services UK

EBA guidelines on limits on exposures to shadow banking entities

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On 19th March the European Banking Authority (EBA) issued a consultation paper which sets out its approach to limiting exposures from banks to the shadow banking sector, proposing that the large exposures regime be used to restrict exposures, in addition to existing Pillar II requirements.

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Posted on 26/03/2015 | 0 Comments

FCA Business Plan ǀ What firms can expect from the FCA in 2015-16

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Yesterday, the Financial Conduct Authority (FCA) published its Business Plan. Firms should read this document closely, as it outlines the FCA’s view on the key risks to its objectives, its priorities, and the activities it intends to undertake in 2015-16. 

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Posted on 25/03/2015 | 0 Comments

Senior Managers Regime ǀ Top Five Lessons Learned

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Her Majesty’s Treasury announced on 3 March 2015 that the commencement date for the Senior Managers Regime (“SMR”) will be 7 March 2016, and the Financial Conduct Authority (“FCA”) published its feedback statement on accountability on 16 March 2016. The timeline for commencement of the new regime is set; banks will have until 8 February 2016 to notify the Prudential Regulation Authority (“PRA”) and FCA of the names of all those, including people currently approved, who will be senior managers under SMR.

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Posted on 17/03/2015 | 0 Comments

The FCA's Coverholder and TPA thematic review | How prepared are you?

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As we near the outcome of the Financial Conduct Authority’s Coverholder thematic review, general insurance firms across the Lloyd’s and London market should consider how they stack up against regulatory expectations and current good market practice. Over the next month, we will be producing a series of short blogs covering some of the key elements of delegated authority control and oversight that we see the market currently designing and implementing:

Blog 1: Conduct risk assessments

Blog 2: Due diligence, audits and Management Information (MI)

Blog 3: Key market solutions and commercial challenges

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Posted on 16/03/2015 | 0 Comments

FCA competition study may come to have far-reaching implications for investment and corporate banking

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The Financial Conduct Authority (FCA) has announced that it will kick-off a market study looking at competition in investment and corporate banking services in spring 2015. This comes as part of its review into competition in the wholesale sector, published yesterday, and follows its call for inputs last July. The FCA has found that limited transparency over both price and quality may make it difficult for clients to assess the value for money of investment banking and corporate banking services, and that bundling and cross-selling of services may make it difficult for new or smaller firms to compete against the established investment banks and universal banks.

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Posted on 20/02/2015 | 0 Comments

Proposed revisions to the standardised approach to credit risk | More risk sensitivity, more complexity

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On 22 December, 2014 the Basel Committee on Banking Supervision (BCBS) published a consultation paper on “Revisions to the standardised approach for credit risk”(CRSA) (Footnote 1). The aim of the revised CRSA as proposed by the BCBS is to tackle weaknesses in the current approach, including:

• over-reliance on external credit ratings;

• lack of granularity and risk sensitivity;

• out-of-date calibration;

• lack of comparability across different banks and jurisdictions; and

• misalignment of treatment between the current CRSA and exposures risk weighted under the internal ratings based (IRB) approach.

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Posted on 4/02/2015 | 0 Comments

MiFID II: Product governance and unbundling dealing commission

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We are now a step closer to understanding how the EU landscape for capital markets and investment services is set to change following the publication last month of a bumper package of MiFID II / MiFIR implementing measures by the European Securities and Markets Authority (ESMA). On 19 December 2014, ESMA published final technical advice to the EU Commission and two consultation papers on regulatory technical standards (RTS) and implementing technical standards (ITS) (part 1 covers ESMA’s commentary and part 2 sets out the draft technical standards).

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Posted on 16/01/2015 | 0 Comments

EU Bank Structural Reform – progress, of sorts

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A New Year, and progress, of sorts, for EU bank structural reform. The European Parliament’s Rapporteur, Gunnar Hökmark, has published his draft report for the Parliament’s Committee on Economic and Monetary Affairs (ECON), while the outgoing Italian Presidency of the Council of the European Union published a progress report as the file was handed over to the Latvians. The picture remains too unclear for an assessment of eventual outcomes, but the parameters for the debate are beginning to emerge. In particular, Mr Hökmark’s report contains a number of significant proposed amendments which demand close scrutiny.

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Posted on 9/01/2015 | 0 Comments

Bank of England UK stress testing exercise | And now for 2015

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The Bank of England today announced the results of the first exercise under its new framework for stress testing the UK banking system.  The results are themselves important, but once they have been pored over, attention will turn to how the exercise will evolve.  There is a growing trend for supervisory stress testing exercises to increase in intensity over time.  The BoE makes clear in its comments today that the UK exercise will be no exception.

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Posted on 16/12/2014 | 0 Comments

Setting the scene for the Capital Markets Union

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The Capital Markets Union (CMU) is a flagship initiative in the European Commission’s agenda for financial services during the next five years. This “concept under construction” has already caused much debate as stakeholders attempt to define the CMU and set its primary aims and principles. However, the real debate is only just starting. The agenda will evolve rapidly over the coming months with a Commission consultation paper expected in Q1 2015 and a road map in Q3 2015.

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Posted on 15/12/2014 | 0 Comments