Insurance in Financial Services UK

No margin for error: Making the margin requirements for non-cleared OTC derivatives happen

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The implementation of the mandatory exchange of initial and variation margin for non-cleared OTC derivative trades in the EU commenced on 4 February for financial counterparties with the largest derivatives portfolios. The introduction of these rules – which was part of the G20’s mandate to reduce the systemic risk posed by the OTC derivatives trading – is expected to lead to an increase in the cost of trading for non-cleared trades.

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Posted on 09/03/2017 | 0 Comments

IT Risk Management practices – still fit for purpose?

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The demand for IT risk management is rapidly increasing in response to the rise in threats and the unprecedented wave of innovation spreading across the financial services industry.  Now is the time for senior financial services risk professionals to begin preparing for the array of changes that are altering the world in which we live.

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Posted on 03/03/2017 | 0 Comments

Make sure you’re on the right track - Internal audit of remuneration

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In recent years, the regulatory and governance framework in financial services organisations has become increasingly complex. A key area of focus has been in the area of remuneration structures, policies and processes, where there has been a significant amount of regulatory development.

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Posted on 20/02/2017 | 0 Comments

IFRS 9 and the “is it a bird, or is it a bomber?” problem

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With the adoption of the IFRS 9 accounting standard into EU law, it is full steam ahead for banks to deploy credit models that estimate Expected Credit Loss (ECL) accounting values. The standard requires firms to account for lifetime ECL on loans that have experienced a “significant increase in credit risk” (SICR), but allows firms to reach their own conclusions as to just how much credit risk ought to be viewed as “significant”.

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Posted on 10/02/2017 | 0 Comments

Biased Expectations: Will biases in IFRS 9 models be material enough to impact accounting values, as well as other applications such as pricing?

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As European IFRS reporters enter 2017, the first generation of Expected Credit Loss (ECL) models have generally been developed, and granular transitional impacts quantified.

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Posted on 17/01/2017 | 0 Comments

Complaint identification and reporting: The impact of recent rule changes

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‘We want to ensure that the process of complaining is straightforward, transparent and fair to consumers, while allowing firms to handle complaints as efficiently as possible and for consumers to have effective access to the ombudsman service if they remain dissatisfied.’ Financial Conduct Authority (FCA)

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Posted on 19/12/2016 | 0 Comments

Regulating cyber-resilience

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Looking ahead to 2017, one of the most important areas of regulatory development that we see in financial services is rising supervisory expectations of firms’ cyber resilience. A spate of recent incidents of cyber-crime and IT failure have sharpened the focus of firms on their cyber preparedness, but management and boards should now also expect to be more routinely challenged by their supervisors on how well they understand and what they have done to limit their exposure to cyber and IT risks.

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Posted on 14/12/2016 | 0 Comments

11 ways to navigate financial markets regulation in 2017

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2016 has been another difficult year for the financial sector, with economic and political uncertainty complicating the completion of the post-crisis regulatory repair agenda.

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Posted on 06/12/2016 | 0 Comments

European Commission proposes 12 month PRIIPs Delay, but uncertainty around timing of the legislation means firms should maintain momentum

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On 9 November, the European Commission published a legislative proposal to extend the application date of the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) by one year. PRIIPs requires the disclosure of Key Information Documents (KIDs) when PRIIPs are sold to retail investors. The delay has been widely anticipated by the market and gives manufacturers and distributors of PRIIPs products until 1 January 2018 to put implementation plans in place. The Commission did not amend any other provisions in the Level 1 text. The proposal follows a vote by the EU Parliament on 14 September to reject the EU Commission’s Regulatory Technical Standards (RTS) on PRIIPs and concerns expressed by 24 Member States in the Council in a vote by the Competitiveness Council of the EU on 20 September (see our blog of 20 September for further detail on the Parliament’s rejection of the RTS).

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Posted on 17/11/2016 | 0 Comments

The Evolving Board | Understanding Culture

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There has been no shortage of deeply damaging scandals affecting the financial services sector in recent years, all of which can be linked to governance and cultural failings. Andrew Bailey, who recently moved from CEO of PRA to lead the FCA, has on numerous occasions spoken on the importance of corporate culture and has stressed that “the culture of firms…is of the utmost importance to regulatorsi”.

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Posted on 07/11/2016 | 0 Comments