Investment Management in Financial Services UK

Equity Release Mortgages – where does the PRA now stand?


For an asset class that represents just 1.4% of insurer’s asset holdings1, equity release mortgages (ERMs) have consumed a remarkable amount of firm and supervisory time. A decade or so ago, the regulatory challenge of this asset class lay on the conduct side. More recently, however, and not without some irony, the main mitigant of these conduct risks, the no negative equity guarantee2 (NNEG), has switched the focus primarily onto the inherent prudential risks of equity release, namely its illiquidity and, owing to the NNEG, the long term exposure it brings to the fortunes of the housing market without further recourse to the borrower.

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Posted on 18/09/2017 | 0 Comments

Regulatory Change and Investing in the Risk Function of the Future


Banks are confronted by an ever increasing volume of compliance challenges. These challenges are fuelled by an increase in analytical complexity associated with regulatory and accounting requirements. This increase in analytical complexity has made solutions more complex to implement in an effective and efficient manner. Furthermore, the deadlines of these new regulatory requirements can be years apart and the requirements are often targeted on a specific business function, which makes it difficult to create synergies between compliance solutions.

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Posted on 14/09/2017 | 0 Comments

Why do organisations get Agile adoption wrong?


50% of operating model changes1 today are focussed on adoption of Agile and DevOps delivery models. While prototypes and proof of concepts have demonstrated value, scaling Agile hasn’t always been successful – here’s why. 

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Posted on 07/09/2017 | 0 Comments

Robo-advice - regulatory uncertainty down, commercial challenges up


In our report “The next frontier - the future of automated financial advice in the UK”, published in April, we noted that a key regulatory challenge for firms in providing automated advice is understanding which side of the “advice boundary” their services fall on – guidance or regulated advice. We argued that the success of automated models in the UK would therefore depend, in part, on how much clarity the Financial Conduct Authority (FCA) would be able to provide about where the boundary lies.

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Posted on 01/09/2017 | 0 Comments

Banking provisions – another year, another story?


Earlier this year1 we shared our comments on the level of provisioning seen in Europe’s largest banks (by balance sheet size)2, based on the 2015 reporting year. Following the settlement of a number of high profile financial services disputes and fines imposed by the US Department of Justice, we have now updated our findings for the most recent reporting period. Has the trend we saw up until 2015 – of ever increasing provisions – continued?

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Posted on 18/08/2017 | 0 Comments

Insurers’ recovery and resolution: EIOPA calls for extensive powers mirroring international standards already applied to banks


The European Insurance and Occupational Pensions Authority’s (EIOPA’s) recently-issued opinion on the harmonisation of recovery and resolution frameworks for the insurance sector is a landmark step for the insurance industry towards implementing the G20’s 2011 commitment to end “too big to fail” for financial services1. While a harmonised resolution regime has been implemented (and applied this year in a live context) for the European banking sector, insurance resolution has so far remained a national matter. Consequently, substantial differences in regime and approach currently apply across Europe.

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Posted on 09/08/2017 | 0 Comments

Extension of the Senior Managers and Certification Regime


The highly anticipated FCA Consultation Paper (CP17/25) on the extension of the Senior Managers and Certification Regime (SMCR) to all financial services firms was released yesterday, 26 July 2017. The SMCR is already place for banks, building societies, credit unions and PRA designated investment firms.

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Posted on 31/07/2017 | 0 Comments

Costs and charges in the asset management market study: the FCA goes “all-in” for transparency


The FCA recently published its final report on the asset management market study (see our briefing here). One of the headline features was the proposed “all-in” fee. There has, however, been some uncertainty on where the FCA’s proposals stand in relation to forthcoming EU legislation which will, in any case, require an aggregated fee disclosure. This brief aims to shed light on this where possible.

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Posted on 25/07/2017 | 0 Comments

FCA asset management market study - Boosting competition amongst asset managers through sharper accountability and disclosure


The Financial Conduct Authority (FCA) has published its much anticipated final report of its Asset Management Market Study. Although many of the proposals were trailed in the interim study, and remain subject to consultation, the report is wide-ranging and is likely to have a far-reaching impact on the asset management industry. Importantly, the FCA has detailed new proposals on governance arrangements, requiring that the Board oversees obligations imposed on fund managers prescribed through the Senior Managers Regime around acting in the customer’s best interests.

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Posted on 29/06/2017 | 1 Comments

Are you ready for 1 January 2018? - Finalised PRIIPs RTS and imminent guidance pave the way for firms’ PRIIPs programmes

Image1Many firms have swiftly resumed their PRIIPs programmes following the entry of the final Regulatory Technical Standards (RTS) on the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) in the Official Journal of the European Union, on 12 April 2017. The Regulation requires the disclosure of Key Information Documents (KIDs) when PRIIP products (such as funds, insurance investment products, structured products and structured deposits) are sold to retail investors.

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Posted on 20/06/2017 | 0 Comments