EMEA Centre for Regulatory Strategy in Financial Services UK
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On 4 July 2018, the Financial Conduct Authority (FCA) issued a Consultation Paper (FCA’s CP 18/19), setting out its plans to introduce a new Directory. This will act as a public register, allowing consumers and firms to check the status and history of people working in the financial services sector. The CP states that the Directory will include all those who hold Senior Manager Functions (SMFs) as well as all those who are in Certified roles.
This latest CP was issued alongside a suite of publications setting out near-final rules and providing guidance on the extension of the Senior Managers and Certification Regime (SMCR) to all Financial Services and Markets Act (FSMA) authorised firms, including asset managers, investment firms, insurers and consumer credit firms.
Agile is bringing a new shape to the world of delivery management, successfully adopted from software development and advocating a less rigid delivery mechanism, the agile movement aims to drive improved outcomes across all industries. In the latest in our agile blog series focusing on insight from across Deloitte about the world of agile, we look at agile funding; demonstrating how the alignment of capital expenditure to an agile delivery approach is imperative in this new world of change.
Our previous blog on the FCA’s Strategic Review of Retail Banking Business Models (the Strategic Review), analysed the review’s focus on the free-if-in-credit (“FIIC”) banking model, the impact that this model had on vulnerable consumers, and the potential for FIIC banking to create what the FCA might see as unacceptable cross-subsidies between vulnerable consumers and other consumer groups. Our overall conclusion was that the FCA was unlikely to ban FIIC banking, but would instead focus on the cost of overdrafts and likely look to introduce some form of price cap for unarranged (and possibly arranged) overdrafts.
- Provides an overview of the FCA’s recent high cost credit review;
- Analyses how the review’s findings and proposals fit into the FCA’s wider agenda on vulnerable consumers; and
- Explains what this means for future pieces of FCA work that relate to vulnerability.
“The prices of many cryptocurrencies have exhibited the classic hallmarks of bubbles including new paradigm justifications, broadening retail enthusiasm and extrapolative price expectations reliant in part on finding the greater fool.” Mark Carney, March 2018.
The London Interbank Offered Rate (LIBOR) underpins in the order of $300 trillion in financial products and is one of the most significant reference rates used by financial market participants. However, during the last financial crisis the inadequacies of LIBOR became evident, which in turn triggered a concerted effort by market participants and authorities to fix them. Despite these efforts, in July 2017, the UK Financial Conduct Authority (FCA) announced a transition away from LIBOR as the key interest rate index used in calculating floating or adjustable rates for loans, bonds, derivatives and other financial contracts. The FCA’s intention is that, at the end of 2021, it will no longer seek to persuade, or compel, banks to submit to LIBOR.
On 19 April 2018, the European Parliament adopted the 5th Anti‑Money Laundering Directive. The amendments stemmed from the European Commission’s 2016 Action Plan to tackle the use of the financial system for the funding of criminal activities, terrorist financing and the large‑scale obfuscation of funds. The Directive has been formally endorsed by the European Council and the text has been published in the Official Journal of the European Union. Member States will be required to bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 10 January 2020. Here we outline:
- Key amendments that have been introduced and;
- Actions that you should consider in response.
A new regulatory requirement for PRA firms
On 30th April 2018, the PRA published its Policy statement (PS) PS9/181 on Group Policy and Double Leverage, finalising its Consultation paper (CP) CP19/172.
The PS updates a number of proposals covered within the CP, primarily intended to ensure that the banking Group has appropriate financial resources to manage prudential risks to the whole Group including its subsidiaries, covering:
PRA Pillar 2: Internal Stress Test Reporting
On 30th April 2018, the PRA published its Policy Statement (PS) PS8/181 on Pillar 2 reporting, finalising its Consultation Paper (CP) CP25/17.2 The PS requires firms to submit a new return (PRA111) to capture internal stress testing data used for Pillar 2B assessments, currently included in firms’ Internal Capital Adequacy Assessment Process (ICAAP) documents.
The European Union’s (EU) Market Abuse Regulation (MAR) came into effect on 3 July 2016. MAR strengthened the EU’s previous market abuse framework by extending its scope to new markets, new platforms and new behaviours and the significant introduction of monitoring trade orders as well as executions. It contained prohibitions of insider trading, unlawful disclosure of insider information and market manipulation, alongside provisions to prevent and detect these behaviours.