UK: Weekly Financial Services Regulatory Update - Week To 31.08.12

Consultation papers:

30 August: Short selling regulation - Handbook changes. The FSA has published a Consultation Paper relating to the EU Short Selling Regulation (SSR) which applies from 1 November 2012. The paper invites comments on the implementation of the SSR which introduces requirements for reporting net short positions in shares and sovereign debt. The SSR follows a background of concerns that short selling was aggravating the downward spiral in share prices and posing a threat to individual financial institutions and wider financial stability. The SSR is directly applicable in the UK but there are some areas where Member States have discretion about how to exercise their powers and the FSA is seeking views and comments on how this discretion should be exercised. Online responses to the paper are invited by 20 September 2012 and changes to the Handbook will be finalised in light of responses received.

http://www.fsa.gov.uk/library/policy/cp/2012/12-21.shtml

28 August: Review of the client money rules for insurance intermediaries. The FSA has published a Consultation Paper following its review of the regulation of insurance intermediaries, with particular emphasis on how client money is held. The paper consults on the proposals that have been drawn up as a result of this review, to amend the CASS 5 rules so that they are clear, simply and easy to apply. The paper further clarifies and explains the CASS 5 rules for firms and insurers. The deadline for responses is 30 November 2012 and final rules are expected in the second quarter of 2013.

http://www.fsa.gov.uk/library/policy/cp/2012/12-20.shtml

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

No new developments this week.

Speeches:

No new developments this week.

Bulletins and newsletters:

30 August: Retail Distribution Review (RDR) Newsletter - Issue 7. The FSA has published issue 7 of its RDR Newsletter series which covers:

  • The importance of holding the right permissions
  • Templates for disclosure documents
  • Information about gap-fill requirements for structured products
  • A reminder about its process for waivers to RDR requirements
  • Its final guidance on replacement business and centralised investment propositions

Templates to help with the disclosure of charging and advice services have also been updated.

http://www.fsa.gov.uk/static/pubs/newsletters/rdr7.pdf

Final notices:

29 August: Yan International. The FSA has issued a Final Notice, dated 29 August 2012, cancelling Yan International Communication Ltd's ("Yan International") registration as a small payment institution pursuant to Regulation 13 of the Payment Services Regulations 2009. The FSA took this action because Yan International failed to respond to the FSA's request for further information about its Managing Director's previous convictions which was considered necessary to enable it to determine the application for registration as a small payment institution.

http://www.fsa.gov.uk/static/pubs/final/yan.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:

30 August: Financial Advice changes guide. The FSA has published a new guide, 'Financial Advice Changes 1-2-3', on its website to explain to investors the changes to the way in which they will be paying for financial advice. It includes an explanation of the difference between independent and restricted advice and how commission works.

http://www.fsa.gov.uk/advicechanges

31 August: Policy Development Update (Issue 150). The FSA has published its latest policy development update containing details of publications issued since the last edition, information about recent Handbook-related developments and an updated timetable for forthcoming publications. The newsletter recaps previous Consultation Papers issued, including the review of the client money rules for insurance intermediaries, restrictions on the retail distribution of unregulated collective investment schemes and close substitutes, data collection on remuneration practices, and packaged bank accounts. It also reviews Policy Statements including mortality assumptions for pension Key Features Illustrations (KFIs), and financial resources requirements for Recognised Bodies.

http://www.fsa.gov.uk/static/pubs/newsletters/pdu-newsletter-aug12.pdf

31 August: Retail Investments Product Sales Data (PSD) Trends Report 2005-2012. In December 2005, the FSA made a commitment to the industry to publish aggregate Product Sales Data ('PSD'). For ease of analysis, the 30 retail investment products on which the FSA has collected PSD have been grouped into five product categories (pensions, investments, endowments, ISAs, and long-term care insurance). Reporting firms are required to submit PSD reports quarterly. PSD provides an important source of information that helps the FSA's risk-based supervision strategy in relation to retail firms and markets. The dataset supports the identification of risk in individual firms and the wider market, and supports FSA policymaking.

http://www.fsa.gov.uk/static/pubs/other/psd-retail-investment-2012.pdf

31 August: Pure Protection Contracts - Product Sales Data (PSD) Trend Report 2005-2012. Since 1 April 2005, product providers have been required to give the FSA transaction-level data on all sales of regulated mortgage contracts, retail investment products and certain pure protection products to retail and private customers. The FSA's analysis focuses on the developments it deems most insightful when interpreting the main trends in the pure protection contracts market. It focuses primarily on the volume of transactions, not the value. Pure Protection Contracts PSD is collected for a limited number of product types – that is, products with complexities that increase the potential risks to consumers.

http://www.fsa.gov.uk/static/pubs/other/pure-protection-psd-2012.pdf

31 August: Mortgages Product Sales Data (PSD) Trend Report 2005-2012. This publication contains information on the data available from mortgage PSD. Only completed transactions (where the funds have been transferred from lender to borrower) are reported in mortgage PSD and the report focuses largely on the volume of transactions, not the value. It contains details on the overall trends in mortgage sales.

http://www.fsa.gov.uk/static/pubs/other/psd-mortgages-2012.pdf

29 August: Wealth Management - FSA to commence further thematic work. In June 2011, the FSA wrote to all Chief Executive Officers of firms that offer wealth management services to retail clients to highlight that it had identified significant, widespread failings. It has continued to work with firms in the sample to mitigate the risks identified, principally around record-keeping and/ or suitability. This has led to enforcement referrals, skilled person's reports, and significant remediation programmes. The FSA intends to interview key individuals from firms that formed part of its previous work to assess how those firms have sought to remediate the problems identified, and in particular whether they have taken sufficient steps to deal with past detriment that any customers may have suffered. The FSA will then consider whether it needs to take further regulatory action. Further updates on this work will be provided in 2013.

http://www.fsa.gov.uk/library/communication/statements/2012/wealth-management-thematic-work

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):

No new developments this week.

London Stock Exchange (LSE):

No new developments this week.

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