Capital Markets in Financial Services UK

FCA Business Plan 2019/20: continuity prevails, but the FCA also looks to the future of regulation and its interaction with wider social policy

FCA business plan image
The FCA recently published its 2019/20 Business Plan, whose sector and cross sector priorities are summarised in the annex to this blog together with a timeline of key planned publications and pieces of work.

Continue reading

Posted on 09/05/2019 | 0 Comments

EMIR Refitted?

HusAbb

EMIR Refit, also referred to as EMIR 2.1, was signed off in the European Parliament plenary on 18 April, paving the way for it to enter into force, potentially as soon as this month.

Refit makes some targeted revisions to the clearing, risk mitigation, reporting and trade repository rules in the European Market Infrastructure Regulation (EMIR). It should not be confused with EMIR 2.2, which makes revisions to EMIR CCP supervision rules and was also signed off at the European Parliament plenary. While some of the Refit revisions aim to make rules simpler and more proportionate, others in effect are likely to increase the regulatory burden already faced by firms. How significant the impact of these modifications is likely to be will depend on a firm’s derivatives trading model, as well as other factors, such as whether it transacts with non-financial counterparties (NFCs), is a clearing member, or has EU-established Alternative Investment Funds (AIFs) in the group.

This blog provides an overview of some of the key requirements in Refit and the potential impact they will have on firms. Please see here for a more comprehensive look at the EMIR Refit changes.

Continue reading

Posted on 08/05/2019 | 0 Comments

What lies in store for third-country firm access to the EU in a post-Brexit world?

3rd

Despite the uncertainty that still surrounds the final date and terms on which the UK will leave the EU, many firms are already looking ahead to how they might optimise their post-Brexit business. Future EU market access, and the associated equivalence regimes, will be a fundamental consideration in this.

Continue reading

Posted on 02/05/2019 | 0 Comments

The FCA highlights the importance of firm culture and customer vulnerability as part of its debt management thematic review

NumberSquarePieces_lo

The FCA recently published the findings of its thematic review of the debt management sector (TR19/01), following up on its first review of the sector in 2015.

The first review found that the quality of debt advice received by consumers was often “very poor” and that “firms were treating customers unfairly.” These poor practices led the FCA to include the debt management sector as a priority area as part of its 2017/18 Business Plan.

This blog explores the main findings from the most recent review and sets out the wider lessons that can be drawn both for debt management firms and the consumer credit sector more generally.

Continue reading

Posted on 24/04/2019 | 0 Comments

Boosting Pillar Strength: PRA consults on enhancements to the Pillar 2 Framework

New
In March 2019, the Prudential Regulation Authority (PRA) published consultation paper (CP 5/19) to update the Pillar 2 capital framework and to reflect on-going enhancements in setting the PRA buffer (Pillar 2B).

As the CP states, its key objective is to “...bring greater clarity, consistency and transparency to the PRA’s capital setting approach. In promoting a greater level of transparency, the PRA seeks to promote financial stability, the safety and soundness of PRA-authorised firms, and facilitate more informed and effective capital planning for banks.”

This CP is relevant to PRA-authorised banks, building societies and PRA-designated investment firms (‘firms’). This CP is not relevant to credit unions, insurance and reinsurance firms. It is open for review, question or comment by 13 June 2019 and the PRA proposes to implement it from 1 October 2019.

 

Continue reading

Posted on 17/04/2019 | 0 Comments

Is post-Brexit regulation taking the high road or the low road?

Split_Large_NEG

Two years ago, the Governor of the Bank of England made a speech warning of a fork in the road in terms of the global approach to financial services (FS) regulation and supervision. The high road - founded on a shared commitment to markets, common minimum global standards, strong regulatory cooperation and resilient institutions and markets - would likely lead to benefits for all. By contrast the low road would involve countries turning inwards and reducing reliance on each other’s financial systems, leading to fragmented markets, less competition and disrupted cross‑border investment.  

Two years on, and with Brexit looming, which road are we on?

Continue reading

Posted on 10/04/2019 | 0 Comments

The 6th Anti-Money Laundering Directive - the battle continues…

AML

On 12 November 2018, approximately 6 months after the adoption of the 5th EU Anti-Money Laundering Directive (5AMLD), the European Parliament published further rules to strengthen the fight against money laundering through the 6th EU Money Laundering Directive (6AMLD).

 

Member States are required to transpose the 6AMLD into national law by 3 December 2020.  After which, relevant regulations must be implemented by firms within Member States by 3 June 2021.

 

Continue reading

Posted on 16/01/2019 | 0 Comments

Individual accountability - the regulators’ Dear CEO Letter on the discontinuation of LIBOR

LIBOR

On Wednesday 19 September 2018 the Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) wrote to the CEOs of major banks and insurance companies regarding the ongoing global benchmark reform effort, specifically the transition from LIBOR to alternative rates.

Continue reading

Posted on 08/10/2018 | 0 Comments

Where to next on the MiFID journey?

58a67a15a38f33ba29ca12cd_BWMiFID II took seven years from consultation to implementation and generated 30,000 pages of rules.1 Nine months have passed since the go-live date on 3 January. Firms could be forgiven for finally wanting to tick it off their “To Do” lists. However, they can’t take that red pen out yet – we haven’t yet reached our destination on the MiFID journey. As with all things regulation, there is always more to do. And where there are rules, more often follow.

Continue reading

Posted on 06/09/2018 | 0 Comments

The PRA tightens its approach on equity release mortgages

58aeff7cbe6fcc0b00463f6b_B

Solvency II seeks to value assets and liabilities at the amounts for which they could be exchanged or settled between knowledgeable, willing parties in an arm’s length transaction. However, when it comes to capturing equity release mortgages (“ERMs”) in regulatory capital calculations, applying that broad principle is undoubtedly “easier said than done”. That no doubt explains why, in its latest consultation in this area, the PRA has adopted a notably cautious approach. In sum, this represents a sharp tightening of the PRA’s policy position on ERMs, and one that extends, rather unusually, to specifying the quantum of particular assumptions that the PRA expects should underlie ERMs’ effective regulatory value.

Continue reading

Posted on 24/07/2018 | 0 Comments