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There was once a time when the FCA (and its predecessor body, the FSA) would declare that it was “not a price regulator.” By this it meant that while it may put in place rules to promote good conduct, market integrity and fair competition, it did not look to involve itself directly in the prices that regulated firms could charge to their clients or customers.
The delegation of investment management functions by UCITS management companies and alternative investment fund managers (collectively referred to as “mancos” in this blog) has attracted increased scrutiny by EU regulators in the context of Brexit. In July 2017, the European Securities and Markets Authority (ESMA) published an opinion which set out supervisory expectations for EU mancos delegating investment management functions, including to non-EU entities. EU regulators such as the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg and the Central Bank of Ireland (CBI) have responded by affirming local requirements. ESMA also set up a Supervisory Coordination Network to discuss concrete cases of relocation from the UK to the EU to foster a common supervisory approach on issues such as delegation.
FCA consults on measures to protect retail investors in open-ended funds investing in illiquid assets
The FCA is consulting on measures intended to reduce the risk of poor outcomes for retail investors in open-ended funds that invest predominantly in illiquid assets (such as property or infrastructure), following its 2017 discussion paper on this topic. In stressed market conditions, such investors may be unable to redeem their investments at short notice or only be able to do so at a substantial discount to the unit price.
As incumbent retail and commercial banks continue to shape their vision of the future and their capacity for achieving digital transformation, the opportunities and risks are increasing. In our previous blog we explored where incumbents should play to hedge against regulatory risk by assessing their digital transformation target and their geographic footprint. In light of this, how should incumbents play to win? In this blog, we explore how incumbents can secure the value of their digital transformation through a three-pronged approach.
As regulators continue to develop their response to disruptive innovation, the regulatory risk – what type of regulatory change will occur in response to innovation – for incumbents is increasing. In our previous blog we explored how regulators may respond to innovation by presenting two forward-looking regulatory scenarios. In light of this, how should incumbents approach their digital transformation? In this blog, we explore where incumbents should play to hedge against regulatory risk by assessing their optimal digital transformation target and their geographic footprint.
The European Central Bank (ECB) has published details of how it expects banks to manage the process of setting and executing their business strategy. This brings some clarity to the long-standing question of how recent supervisory focus on business models – it is again one of the ECB’s priorities for the year – will translate into action for banks, but in the process introduces an expectation that banks make significant investments in their capabilities in this area.
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.
Many senior leaders are keen to open a dialogue with us about how they can introduce their teams to more agile ways of working. The question tends to come in many different forms, with a variety of motivations, however is often seeking a similar outcome: how can we help our teams to sustainably reduce the lead-time to deliver working value to our customers?
As the fight against money laundering continues to evolve rapidly, on 12 September 2018, approximately 6 months after the implementation of the 5th EU Anti-Money Laundering Directive (5AMLD), the European Parliament adopted further amendments to the relevant criminal law in order to strengthen and advance the fight against money laundering. Whilst these have a long way to go before they are finalised, there is value in looking now at some of the proposed amendments, such that firms and our clients are aware of what may be needed or expected of them in the near future.
When the Apache attack helicopter was developed it included a monocle for the pilot which gave a heads up display to their right eye featuring a plethora of high level information - keeping an eye on things became a more challenging task when you had to divide your vision to get a holistic view of the battlefield.