UK: Weekly Financial Services Regulatory Update - Week To 09.11.12

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.

We hope that you will find this update useful.

Consultation papers:

8 November: FSA consults on changes to BIPRU liquidity regime. The FSA has published a consultation paper (CP12/31) setting out proposals to amend BIPRU Transitional Provision 29 (BIPRU TP29) to remove the automatic increase to a 70% simplified buffer requirement, which is due to come into effect on 1 July 2013 and all subsequent scheduled increases. Minor changes to the liquidity rules and guidance in BIPRU 12 and SUP 16 are also proposed. The proposals specifically include:

  • Amendments to the BIPRU 12.7 liquid assets buffer 8 eligibility restrictions
  • Amendments to correct three drafting errors in the SUP 16 10 annex 25 reporting guidance

Comments can be made on the proposals in CP12/31 until 8 December 2012.

http://www.fsa.gov.uk/library/policy/cp/2012/12-31.shtml

6 November: FSA consults on complaints scheme for the new regulatory structure. The FSA has published a consultation paper on the proposed scheme for complaints against the FCA, the PRA and the Bank of England. CP12/30 proposes that the scheme will only apply to complaints made about the way the regulators carry out their functions under the Financial Services Bill (FS Bill) and transitional arrangements will apply to: complaints already underway at legal cutover (that is, the date that the new regulatory structure becomes fully established, expected on 1 April 2013); and, complaints about the FSA received after implementation of the FS Bill.

Comments on the proposals can be submitted to the FSA until 6 February 2013.

http://www.fsa.gov.uk/library/policy/cp/2012/12-30.shtml

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

No new developments this week.

Speeches:

7 November: The FCA and mortgage regulation - time to be different. The FSA has published a speech by Martin Wheatley at the CML Conference, 'Time to be different'. He covers three main themes:

  • The mortgage market – how the market is changing and how it can move to a more sustainable future
  • The FSA's regulation, and how it will change as it moves into the Financial Conduct Authority
  • How the regulators can work with the financial services industry to make sure that both the mortgage market, and the regulation that supports it, work well

http://www.fsa.gov.uk/library/communication/speeches/2012/1107-mw.shtml

6 November: The challenges in assessing capital requirements for banks. The FSA has published a speech by Andrew Bailey, MD of the PRU at the Bank of America Merrill Lynch Conference. The speech focuses on the challenges facing banks in respect of assessing their required capital and the way in which supervisors assess that capital. He calls for a simplification of the regulatory process. Mr Bailey sets out his preference to: "start with a risk-based approach to assessing capital needs and then back that up with other risk-based approaches and a simple non-risk based approach, like a leverage ratio". He discusses previous approaches to banking regulation and weighs up their various merits and also highlights the lessons to learn from.

http://www.fsa.gov.uk/library/communication/speeches/2012/ab-1106

Bulletins and newsletters:

No new developments this week.

Final notices:

9 November: Final Notice – Malcolm Green. The FSA has published a Final Notice against Malcolm Green prohibiting him from carrying out any regulated activities. The FSA has decided that Mr Green is no longer a fit and proper person as he has been convicted of 20 counts of obtaining a money transfer by deception, 19 counts of fraud by abuse of position and 3 counts of false accounting, for which he was sentenced on 24 February 2012 to 5 years and 6 months' imprisonment.

http://www.fsa.gov.uk/static/pubs/final/malcolm-green.pdf

8 November: Final Notice - The Pentecostal Credit Union Limited. The FSA has published a public censure against The Pentecostal Credit Union Limited (TPCU). The TPCU breached Principle 1 of the FSA's Principles for Businesses (integrity) in that it issued £1.2m of loans, purportedly to individuals, but where the money was in fact advanced to a corporate entity and in doing so put its members' assets at risk. The FSA has also issued a Final Notice against Reverend Carmel Jones, a director at TPCU who was largely responsible for TPCU's failings.

http://www.fsa.gov.uk/static/pubs/final/tpcu.pdf

8 November: Final Notice - Reverend Carmel Jones. The FSA has published a statement of misconduct to Reverend Jones prohibiting him from carrying on any regulated activities. The FSA has stated that the circumstances of Reverend Jones' conduct would ordinarily attract a financial penalty of £60,000 but that such a penalty would cause Reverend Jones significant financial hardship and as such, the FSA has decided to publish a statement of his misconduct. Reverend Jones permitted The Pentecostal Credit Union Limited, of which he was a director, to make a series of loans purported to be to individuals but which were in fact to a corporate entity.

http://www.fsa.gov.uk/static/pubs/final/reverend-jones.pdf

6 November: Final Notice - Ryan Robert Burnside. The FSA has issued a Final Notice against Ryan Robert Burnside, prohibiting him from performing any function in relation to any regulated activity. The FSA concluded that Mr Burnside was not a fit and proper person to perform regulated functions due to a lack of honesty and integrity. Specifically, Mr Burnside was convicted of one count of fraud for which he was sentenced to two years and four months' imprisonment in January 2012.

http://www.fsa.gov.uk/static/pubs/final/ryan-burnside.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:

9 November: FSA requires asset management CEOs to attest to their firm's compliance with FSA conflicts of interest rules. The FSA has published a Dear CEO Letter in the form of a paper on conflicts of interest between asset managers and their customers. The paper sets out the FSA's findings from its thematic review of asset managers' firms conducted between June 2011 and February 2012. The paper summarises the FSA's key findings discussing how firms can:

  • Identify and control conflicts of interest
  • Ensure customers have equal access to all suitable investment opportunities
  • Allocate the cost of errors between themselves and customers
  • Manage the purchase of research and trade execution services
  • Manage gifts and entertainment
  • Manage employees' personal dealings

The FSA has stated that, due to the seriousness of some of the issues identified by the review, in order to ensure compliance with its conflict of interest rules it expects each firm's CEO to complete and return an attestation to the effect that the board has considered the FSA's paper and has resolved that the firm's arrangements are sufficient to ensure that the firm manages conflicts of interest effectively and in compliance with FSA rules. This attestation is attached to the paper as an appendix and must be returned to the FSA by 28 February 2013.

http://www.fsa.gov.uk/static/pubs/other/conflicts-of-interest.pdf

8 November: FSA Factsheet on short selling. The FSA has published a factsheet on notifications and disclosures required under the EU Short Selling Regulation. The factsheet summarises:

  • The procedure for notifying the FSA of a firm's intention to rely on a market maker or authorised primary dealer exemption under the Regulation
  • The procedure for making a notification or disclosure required under the Regulation
  • Thresholds for notifying or disclosing net short positions in shares

http://www.fsa.gov.uk/static/pubs/international/factsheet-short-selling.pdf

7 November: Updated FSA self-assessment template for Solvency II IMAP submissions. The FSA has published an updated webpage and self assessment template (SAT) to assist firms with their submissions for internal model approval under the Solvency II Directive. The FSA's review work will be organised into 15 IMAP review categories, including scope, use test, and validation. In order to obtain internal model approval, firms will need to meet all relevant internal model requirements specified in the Directive and, when finalised, the implementing measures. The webpage states that the 15 IMAP review categories were developed for administrative purposes within the FSA and they have been included in the updated version of the SAT at firms' requests.

http://www.fsa.gov.uk/about/what/international/solvency/implementation/solvency-submissions

5 November: Draft Memorandum of Understanding between FCA and OFT. The FSA has published draft principles of co-operation between the FCA and the OFT on competition issues. The two organisations will have some overlap in their roles to encourage competition in the financial services markets. The draft principles are designed to:

  • Promote co-operation between the FCA and the OFT when dealing with competition issues and super-complaints
  • Facilitate the effective treatment of competition issues and super-complaints within financial markets, while minimising duplication of activity
  • Improve transparency

No link available.

5 November: Draft MoU between FCA and PRA on with-profit policies. The FSA has published a draft Memorandum of Understanding (MoU) between the FCA and the PRA on with-profit policies. Both organisations are responsible for supervising insurance companies, and the co-ordination between the FSA and the PRA for this level of supervision was set out in a MoU published in January 2012. However, the FSA believes that additional co-ordination is required for with-profits policies because the returns on these policies are not well defined, and are at the discretion of the insurance companies. This MoU sets out how the FCA and PRA will work together to protect policyholders' interests.

http://www.fsa.gov.uk/static/pubs/mou/draft-with-profits.pdf

5 November: New FSA webpage on process-related aspects of product sales data FAQs. The FSA has published a new webpage setting out FAQs on the process-related aspects of reporting product sales data (PSD) under Chapter 16.11 of the Supervision manual (SUP). The FAQs cover general process issues, input and transfer method and transfer acceptance, validation and error handling.

http://www.fsa.gov.uk/doing/regulated/returns/irr/gabriel/faqs/psd/process

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.

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 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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.