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When the Financial Conduct Authority (FCA) launched its Mission earlier this year, it promised to publish a series of documents that would explain its approach to regulation in more detail. (See our blog on the FCA Mission and Business Plan.) The FCA published its draft future approach to consumers document last month (see our blog on vulnerable consumers in this context) and has in the last few days published two further draft approach documents on competition and authorisation.
On 13 December 2017, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) issued a suite of Consultation Papers providing further guidance on how they plan to transition firms and individuals to the Senior Managers and Certification Regime (SMCR). The FCA’s CP 17/40 also provides further information on the implementation of the new Prescribed Responsibility regarding Conduct Rules.
On 23 November, the FCA published a report on the compliance function in wholesale banks. In January this year, the FCA sent a questionnaire to 22 wholesale banks asking for information about their compliance function. The firms included large global banks operating across several business lines, medium-sized firms that focus more on specific geographies, and firms with a less significant UK footprint. The range of firms surveyed was broad, as illustrated by responses to the FCA’s question on the number of revenue-generating front-office roles in wholesale banking businesses: figures ranged between two and 3,115.
In July 2017, the UK Financial Conduct Authority (FCA) reported that the London Interbank Offered Rate (LIBOR), will be phased out as the interest rate index used in calculating floating or adjustable rates for loans, bonds, derivatives and other financial contracts by the end of 2021. LIBOR underpins approximately $300 trillion in financial products and is one of the most significant reference rates used by financial market participants.
After more than a year of stalled negotiations, the Basel Committee on Banking Supervision (BCBS) announced an agreement on the remaining elements of the Basel III post-crisis bank capital framework. Striking a deal on this package of reforms (often called ‘Basel IV’) is a significant milestone in the post-crisis regulatory journey and a huge achievement for the BCBS.
The announced framework bridges a gap – particularly between American and European regulators – on the extent to which banks can use internal models to determine their capital requirements.
Earlier this week, the European Commission published the final Regulatory Technical Standard (RTS) on Strong Customer Authentication and Common Secure Communication under the revised Payment Services Directive (PSD2). In this final version, the Commission confirmed that screen scraping will no longer be allowed once the RTS comes into effect, heeding concerns expressed by the European Banking Authority (EBA) and other stakeholders around security. However, Account Servicing Payment Service Providers (ASPSPs) will still be required to put in place contingency measures in case of unavailability or under performance of their dedicated interfaces during a communication session with Third Party Providers (TPPs).
This blog is part of a series of insights on Building Society risk management.
A key ongoing consideration for the Senior Management of Building Societies is risk appetite and tolerance, and the Society's adherence to it. The question of risk appetite and tolerance has been on the agenda of Board's and regulators for some time now; however, the level of focus given to this in recent years has now increased to the point where no Board or Board sub-committee meeting fails to touch on this in some way.
The importance the FCA places on protecting vulnerable consumers has become increasingly clear with the recent publication of its Financial Lives and draft FCA Mission: Our Future Approach to Consumers documents. Throughout these documents, as well as in its Business Plan and Mission Statement (both published in April) the FCA emphasises its clear operational commitment to prioritising the needs of the most vulnerable and least resilient consumers.
Insurers set to be captured by enhanced Senior Managers and Certification regime from 2018.
In July, the PRA and FCA released their highly anticipated consultation papers (FCA CP17/26 and PRA CP14/17) setting out their proposals to extend the Senior Managers and Certification regime (“SM&CR”) to insurers from 2018. In this blog, we explore the most significant changes affecting insurers and steps that firms can take to prepare for the new regime.
Read the Original Blog Here.
The European Commission’s Regulation on indices used as financial benchmarks in financial instruments and financial contracts (the Regulation) goes live on 1 January 2018. It forms part of the EU’s response to a series of high profile investigations in recent years into the alleged manipulation of key financial benchmarks, including LIBOR. These investigations raised concerns over the reliability and integrity of financial benchmarks, which underpin transactions worth trillions of dollars. The Regulation aims to reduce the risk of manipulation, bolster the reliability of benchmarks administered and ultimately provide a safer environment for the use of benchmarks in the EU.
As the countdown to the Regulation begins, we examine some key considerations for firms in the upcoming weeks and months.