UK: Weekly Financial Services Regulatory Update - 16.03.12

This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FSA, the UKLA, the Upper Tribunal, the Financial Ombudsman Service and the London Stock Exchange over the past week, with links to the full documents where these are available.

If you have any comments on the content or format of the update or if you no longer wish to receive it, or have a colleague who would like to receive it, please email financial.services@clydeco.com.

Consultation papers:

15 March: Regulating bidding for Emissions Allowances under Phase Three of EU Emissions Trading Scheme. The FSA has published a consultation paper (CP12/6) on the regulation of bidding for Emissions Allowances under the EU Emissions Trading Scheme. The paper outlines the FSA's proposals in relation to how it will authorise and supervise firms intending to bid on auction platforms in those circumstances where it is deemed to be a regulated activity. Proposals include:

  • Treating bidding on an auction platform as any other MiFID business where it is deemed to be MiFID business, and
  • Authorising auction regulation business against the requirements stated in EU Commission Auction Regulation 1031/2010 ("CAR") in addition to taking anti-money laundering measures and regulating certain approved persons

The deadline for responses is 19 April 2012 and final proposals are anticipated to be published in late May 2012.

http://www.fsa.gov.uk/static/pubs/cp/ cp12-06.pdf

http://www.fsa.gov.uk/static/pubs/cp/ cp12-06-newsletter.pdf

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

16 March: FSA Chief Executive to leave organisation at the end of June. Hector Sants has announced his intention to leave his position at the FSA at the end of June 2012. Having originally handed in his resignation in February 2010, the date has now been set to allow him to complete delivery of the Government's plan to separate prudential and conduct financial regulation in the UK. Upon leaving, Sants' role as head of the Prudential Business Unit will be taken up by Andrew Bailey whilst Martin Wheatley will remain the head of the Conduct Business Unit and future CEO of the Financial Conduct Authority.

http://www.fsa.gov.uk/library/communication/pr/2012/028.shtml

14 March: Shadow Banking and Financial Instability: Lord Turner speech to the CASS Business School. In a speech to the CASS Business School, the Chairman of the FSA, Lord Turner, sets out how the 'shadow banking' sector contributed to the financial crisis, the risks it still poses to financial stability and the importance of a sufficiently comprehensive and radical policy response.

He highlights that the 2007-08 financial crisis was not one simply caused by high street banks but one where shadow banking activities played a major role. He also stresses that major reforms had been put in place in the wake of the crisis for 'normal' banks including increased capital and liquidity requirements and better supervision, but said there had yet to be a similar response to the 'shadow' sector and that this needed to be addressed urgently.

He reaffirmed the determination of the Financial Stability Board (FSB) to "get to grips with shadow banking issues", in order to ensure that adequate responses to the risks involved were put in place.

For the related speech, please see the relevant section of this update.

http://www.fsa.gov.uk/library/communication/pr/2012/027. shtml

13 March: Head of European Credit Sales at Credit Suisse fined £210,000 for improper market conduct, disclosing client confidential information and exhibiting a lack of skill, care and diligence. The FSA has fined Nicholas Kyprios, Head of European Credit Sales at Credit Suisse in London, £210,000 for improper market conduct in disclosing confidential client information ahead of a significant bond issue in November 2009.

Credit Suisse acted on behalf of Liberty Global, Inc. (Liberty) during its takeover of UnityMedia GmbH (UnityMedia) which was part-financed by a €2.5 billion bond issue. Kyprios was wall-crossed regarding the takeover and the proposed bond issue, and instructed in writing not to disclose any confidential and/or inside information he had been given to third parties.

On 11 November 2009, Kyprios called a fund manager to invite him to the bond issue road show. Although Kyprios did not have a pre-meditated intention to disclose the client confidential information, the fund manager asked Kyprios about the bond issue and in response Kyprios engaged in a guessing game during which he signalled specific information to the fund manager.

Kyprios agreed to settle at an early stage and in doing so qualified for a 30 per cent discount on the financial penalty. Without the reduction, the FSA would have fined Kyprios £300,000.

For the Final Notice, please see the relevant section of this update.

http://www.fsa.gov.uk/library/communication/pr/2012/026. shtml

Speeches:

14 March: Shadow Banking and Financial Instability. The FSA has published a speech (including speech notes and slides) delivered by Lord Turner, FSA Chairman at the CASS Business School, setting out how the shadow banking sector contributed to the financial crisis and the risks it continues to pose to financial stability. Lord Turner also outlines the current national and international reform agenda in relation to financial stability and recommends a comprehensive and radical policy response.

For the related press release, please see the relevant section of this update.

http://www.fsa.gov.uk/static/pubs/speeches/0314-at.pdf

http://www.fsa.gov.uk/static/pubs/speeches/slides-0314-at. pdf

13 March: Euroclear Central Bank Conference on Financial Stability. The FSA has published a speech by Andrew Bailey, FSA Director of UK Banks & Building Societies at the Euroclear Central Bank Conference on Financial Stability in Paris.

Mr Bailey considers a number of the deeper challenges faced in the UK as the system of financial regulation is reformed, something expected to happen in a year from now when new legislation comes into effect.

For the related press release, please see the relevant section of this update.

http://www.fsa.gov.uk/portal/site/fsa/

Bulletins and newsletters:

No new developments this week.

Final notices:

13 March: Nicholas James Kyprios. The FSA has issued a final notice, dated 13 March 2012, imposing a financial penalty of £210,000 upon Mr Nicholas Kyprios, Head of Credit Sales at Credit Suisse Securities (Europe) Limited ("Credit Suisse"). Mr Kyprios has been held to have disclosed inside information, which was confidential to a client of Credit Suisse, to a potential investor without wall-crossing him. This conduct was held to be a breach of Principles 2 (skill, care and diligence) and 3 (market conduct) of the FSA's Statements of Principles for Approved Persons.

The FSA took the view that a large financial penalty was appropriate due to the need for there to be a deterrent against such behaviour. A £300,000 penalty was therefore held to be appropriate in the circumstances but this was reduced to £210,000 on the basis that Mr Kyprios was entitled to a 30 per cent discount for agreeing to settle at an early stage.

For the related press release, please see the relevant section of this update.

http://www.fsa.gov.uk/static/pubs/final/nicholas-kyprios. Pdf

Application refusals:

No new developments this week.

Approved person refusals:

No new developments this week.

Research publications:

No new developments this week.

Consumer research:

No new developments this week.

Other FSA publications:

15 March: Undertaking from the Cheshire Mortgage Corporation Limited. The FSA has published an undertaking given by Cheshire Mortgage Corporation Limited under the Unfair Terms in Consumer Contracts Regulations 1999 ("UTCCRs") in relation to the terms it uses in its customer mortgage information booklet. The FSA has determined that the terms, which outline that Cheshire could vary the mortgage interest rate at any time by providing the customer with notification, could be regarded as unfair under the UTCCRs based upon the imbalance in the respective parties' rights and obligations that these terms create and the potential power to cause consumer detriment. The FSA further considered that including the terms meant that the firm was failing to act in good faith and was not dealing openly with consumers. The firm has agreed to amend the term so as to make it both clearer and fairer in relation to consumers.

http://www.fsa.gov.uk/static/pubs/other/cmc-undertaking. pdf

13 March: FSA Mortgage Lending Data published. The FSA has published its latest Mortgage Lending Data for the United Kingdom.

Key statistics for Q4 2011 include:

  • The total value of outstanding loans at the end of Q4 was £1,218bn, an increase of less than 0.1 per cent on last quarter
  • New advances in the quarter amounted to £40bn, 8 per cent lower than in Q3 but some 9 per cent higher than the amount advanced in Q4 2010
  • The overall average interest rate on new advances continued to fall during the quarter, down from 3.59 per cent to 3.49 per cent, a new low for the series. The reduction was a result of a fall in the rate for fixed rate lending more than offsetting a small increase in the variable rate
  • New commitments totalled £37bn in the quarter, 11 per cent down on Q3 but 7 per cent higher than in Q4 last year, and
  • Lending for house purchases accounted for 61 per cent of new advances, up on Q3, and 58 per cent of commitments, a small decrease from last quarter. The proportion of advances for remortgages (32 per cent) was as much as in Q3, though there was an increase in commitments from 32 per cent to 34 per cent

http://www.fsa.gov.uk/library/other_publications/statistics

13 March: Retail Conduct Risk Outlook 2012: FSA publishes an analysis of the main risks facing consumers. The FSA has published an analysis of the main risks which potentially face consumers in the financial services sector over the next 12 to 18 months.

The Retail Conduct Risk Outlook shows that consumers continue to struggle with the effects of a slower economy, low interest rates and poor returns on investments. The FSA found evidence that many people are trying to tackle this by saving more, shopping around and paying off their debt.

The publication analyses the wider external factors in the economy, the pressures on different firms and how this might impact on different consumers, and is an essential part of helping the FSA target its resources. Supervisors will be working with firms to ensure they address the risks raised.

Early intervention to try and stop issues escalating into mass consumer detriment is one of the main objectives of the FSA's conduct agenda this year, particularly as it develops the approach of the successor body, the Financial Conduct Authority.

http://www.fsa.gov.uk/library/communication/pr/2012/025. shtml

UKLA publications:

No new developments this week.

Upper Tribunal (Tax and Chancery Chamber) (formerly Financial Services and Markets Tribunal (FSMT)):

No new developments this week.

Financial Ombudsman Service (FOS):

12 March: FOS online technical resource for rediscovered old passbooks and dormant accounts. The FOS has published a new online technical resource outlining the common complaints received in relation to rediscovered old passbooks and dormant accounts. It outlines the types of complaints most often received, the circumstances in which it is able to consider such complaints, the applicable time limits to such complaints, and the documentation required from a complainant and from the financial business involved.

http://www.financial-ombudsman.org.uk/publications/ technical_notes/passbooks-and-dormant-accounts.htm

London Stock Exchange (LSE):

No new developments this week.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions