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.
We hope that you will find this update useful.
Consultation papers:
11 July: Transposition of Solvency II – Part 2. The FSA has published a consultation paper on rules to enable it to implement the Solvency II Directive into the FSA Handbook. This consultation covers those matters that were not covered, or were only partially covered, in Part 1 of the consultation series, which includes how the rules may apply to the Lloyd's insurance market and the FSA's policy for separate disclosure of capital add-ons. It also contains the proposed changes to the FSA Handbook in the area of with-profits and unit linked business. An online response form has been made available and the deadline for responses is 11 October 2012.
http://www.fsa.gov.uk/library/policy/cp/2012/12-13.shtml
Discussion papers:
No new developments this week.
Policy statements:
No new developments this week.
Press releases:
13 July: FSA freezes assets of suspected land banking firm. The FSA has secured asset freezing orders against Asset L.I. Inc (trading as Asset Land Worldwide), Equity Services (London) Limited, and Asset Land Investment PLC, as well as three unnamed individuals. The FSA suspects that these companies were running a land banking operation which it believes may amount to an unauthorised collective investment scheme and has therefore obtained freezing orders as part of a coordinated action involving West Berkshire Trading Standards and the Metropolitan and Essex police forces.
http://www.fsa.gov.uk/library/communication/pr/2012/073.shtml
Speeches:
No new developments this week.
Bulletins and newsletters:
No new developments this week.
Final notices:
13 July: Safari General Trading Ltd. The FSA has issued a Final Notice, dated 12 July 2012, refusing Safari General Trading Ltd's ("Safari") application for registration as a small payment institution and to perform Money Remittance as a payment service. The FSA made this decision on the basis that Safari has failed to provide all of the information requested by the FSA in support of its application and has failed to demonstrate that its head office, registered office or place of residence is in the UK. Safari failed to dispute the FSA's Warning Notice and decided not to refer the FSA's Decision Notice to the Upper Tribunal and therefore, in accordance with s.390(1) of the Financial Services and Markets Act 2000, the FSA issued a Final Notice.
http://www.fsa.gov.uk/static/pubs/final/safari.pdf
9 July: Jay Alan Rutland. The FSA has issued a Final Notice, dated 9 July 2012, fining Jay Alan Rutland £30,000 and prohibiting him from performing any function related to regulated activities. The FSA decided to take this action because Mr Rutland deliberately defied compliance procedures, acted against the interests of customers and disclosed inside information in order to improperly maximise sales by his team. Though Mr Rutland had referred the Decision Notice to the Upper Tribunal, he has now withdrawn his referral with the Tribunal's permission. The FSA had originally decided that Mr Rutland's misconduct warranted a penalty of £160,000 but has reduced this to £30,000 on the basis that the larger amount would have caused Mr Rutland serious financial hardship.
http://www.fsa.gov.uk/static/pubs/final/jay-rutland.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:
13 July: Draft guidance for firms and the Financial Ombudsman Service when making a reference under s.234D. Section 234D of the Financial Services and Markets Act 2000 allows for firms and the Financial Ombudsman Service ("FOS") to refer certain matters to the Financial Conduct Authority. Section 234G further requires the FCA to provide guidance on how such references should be presented. The guidance provides information to assist firms and the FOS in making references by setting out who may make a reference, the issues that can be referred and the matters to be addressed in a reference. It also explains how references will be handled, what action may result, exceptions to the FCA's duty to respond, and publicity for references.
http://www.fsa.gov.uk/static/pubs/other/234d.pdf
13 July: FG12/17 – Payment protection insurance customer contact letters (PPI CCLs). The FSA has published finalised guidance in relation to firms' handling of PPI complaints. The FSA sets out its view of what should be contained in a PPI customer contact letter ("CCL") and how it should be presented. It also sets out the FSA's view of how the general complaint handling rules and time limits are applicable to PPI CCLs.
http://www.fsa.gov.uk/library/policy/final_guides/2012/fg1217
UKLA publications:
13 July: Primary Market Bulletin No.2. The FSA has published a guidance consultation relating to the presentation of information that was previously disseminated through the List! publication. Having ceased to publish the List! publication in 2010, the FSA has since consolidated the most up to date and relevant articles into the Technical Notes and Procedural Notes on the UKLA section of the FSA's website. The FSA now proposes to revise, update and republish these notes in a new format. The deadline for comments on the guidance consultation is 14 August 2012.
http://www.fsa.gov.uk/library/policy/guidance_consultations/2012/1208
Upper Tribunal (Tax and Chancery Chamber) (formerly Financial Services and Markets Tribunal (FSMT)):
9 July: First Financial Advisers Ltd v FSA (FS/2010/0038). The Upper Tribunal has published its decision in the case of First Financial Advisers Ltd v FSA in which First Financial Advisers Ltd had referred to the tribunal the FSA's decision to refuse its application for Mr Stephen Danner to be approved to perform controlled function CF30. The tribunal concluded that Mr Danner was not a fit and proper person on the basis that he had previously failed to manage conflicts of interest in two other companies in which he had an interest, lacked sufficient knowledge and understanding of investments (which had previously led to his clients investing in CF Arch cru funds) and lacked integrity and reputation. The Upper Tribunal therefore dismissed First Financial Advisers Ltd's application.
http://www.tribunals.gov.uk/financeandtax/Documents/decisions/First_Financial_Advisors_Ltd_v_FSA.pdf
Financial Ombudsman Service (FOS):
13 July: Redress for pension mis-sale cases that fall outside the Pensions Review. The FOS has published a technical note setting out how it handles complaints relating to pension sales that do not fall within the period covered by the regulatory Pensions Review. It states that these types of complaint require a different approach to those that fall within the Pensions Review because, unlike those, these are not a "closed group" relating to a specific fixed period.
http://www.financial-ombudsman.org.uk/publications/guidance/pension_assumptions.htm
London Stock Exchange (LSE):
11 July: London Stock Exchange and Singapore exchange sign cross quotation agreement. The LSE has signed a Memorandum of Understanding ("MoU") with Singapore Exchange Limited to allow their respective member firms to trade their most actively traded stocks on each exchange.
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