UK: Weekly Financial Services Regulatory Update - Week To 03.05.2013


This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FCA, the PRA, 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. If you have any queries about any of the information in this update or financial services regulatory matters generally, please contact one of the individuals listed in the 'Contacts' section of this publication.

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

Consultation papers:

2 May: GC13/2: Dealing fairly with interest-only mortgage customers who risk being unable to repay their loan. The FCA has published a guidance consultation (GC13/12) on dealing fairly with interest-only mortgage customers who risk being unable to repay their loans. The proposed guidance sets out what the FCA expects firms to do to ensure the fair treatment of customers who are unable to repay the capital sum at the end of the term. This includes the FCA's views on how firms can act in line with Principle 6 to achieve a fair outcome for their customers. However, this is not intended as a prescribed course of action and is not the only way firms can act to abide by Principle 6. Responses to the consultation should be received by 3 June 2013. documents/guidance-consultations/ gc13-02

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

3 May: Two arrested in FCA insider dealing investigation. On 30 April, the FCA with the assistance of the City of London Police Economic Crime Directorate executed a search warrant in West London. Two people, a man aged 41 and a woman aged 37, were arrested and questioned in connection with an investigation into insider dealing and market abuse. In Switzerland business and private premises were also searched by the Swiss authorities in connection with the FCA's investigation.

1 May: Updating disclosures to reflect the creation of the FCA and PRA.

The FCA has published a statement explaining that it expects firms to review their documents and other disclosures as a priority, to ensure that they are up-to-date and accurate, to reflect that they are now authorised by the FCA or the PRA. The transition period for doing this does not extend to obligations derived from European law, including obligations in the Payment Services Regulations 2009 and certain provisions in COBS 5, COBS 6, COBS 9 and COBS 13. Whilst the FCA recognises that it may not have been possible to make all the required disclosure updates immediately, firms must be able to demonstrate that they have plans to make these updates at the earliest practicable opportunity.

29 April: FCA charges two in relation to an unauthorised investment scheme. The FCA has charged Alex Hope and Raj Von Badlo with a total of ten offences relating to an unauthorised investment scheme they promoted and operated. The scheme purported to carry out FOREX trading for the benefit of investors and is believed to have taken over £5 million from investors. The charges follow searches of addresses occupied by these two men conducted by the FSA with assistance of the City of London Police in April and May 2012.

29 April: Sue Lewis appointed Chair of the Financial Services Consumer Panel. Sue Lewis has been appointed the new Chair of the independent Financial Services Consumer Panel. The Panel advises the FCA on the interests and concerns of consumers providing constructive challenges to its policy-making process. Sue will take over as Consumer Panel Chair on 1 July 2013. Most recently Sue has been working as a non-executive director and independent policy consultant. Sue is currently the Consumer Advocate Member on the Chartered Insurance Institute's Professional Standards Board, and is a Trustee of the Personal Finance Education Group and of Stepchange, a debt advice charity.


No new developments this week.

Bulletins and newsletters:

No new developments this week.

Final notices:

30 April: FCA publicly censures Horn Express Ltd (formerly known as Qaran Express Money Transfer Limited) for breaches of the Payment Services Regulations. The FCA has published a Final Notice that publicly censures Horn Express Limited (formerly known as Qaran Express Money Transfer Limited, "QEMTL") for failing to safeguard and segregate customer funds between 1 December 2009 and 16 November 2011. QEMTL mixed customer funds with its own monies and failed to properly reconcile the customer funds held in its bank account. In addition to this, QEMTL did not set up and label its bank account correctly, so that in the event of QEMTL's insolvency, customers might have lost their money. The FCA considered QEMTL's failings to be serious because they put customer funds at risk. The FCA would have fined QEMTL £136,687 had there not been verifiable evidence that imposing a fine would have caused serious financial hardship. This is the first time that a public sanction has been imposed on a payment services institution authorised under the Payment Services Regulations 2009.

Press release:

Final Notice:

29 April: Final Notice: Mr Douglas Jones. The FCA has published a Final Notice fining Mr Douglas Jones £13,300 for breaches of Statements of Principle 1 and 6, and prohibiting him from performing any regulated activities on the basis that he is not a fit and proper person due to a lack of competence, capability, honesty and integrity. During the relevant period, Mr Jones was the chief executive and a mortgage adviser at Which Mortgage. The FCA found that he breached Principle 6 by failing to ensure that the Firm had appropriate controls to verify information submitted by clients in support of mortgage applications which led to the Firm being used to facilitate financial crime. Mr Jones also breached Principle 1 by dishonestly altering certain historic client files after concerns had been raised by a lender. Mr Jones agreed to settle at an early stage and therefore qualified for a 30% discount. Were it not for this discount, the Authority would have imposed a fine of £19,000. douglas-jones.pdf

29 April: Final Notice: Mr Derek Jones. The FCA has published a Final Notice cancelling Mr Derek Jones' approval to perform controlled functions in relation to Which Mortgage. The FCA also imposed a prohibition on Mr Jones from performing any significant influence functions in relation to regulated activities on the basis that he is not a fit and proper person due to a lack of competence and capability. The Authority would have also sought to impose a fine of £11,200 for breaches of Statement of Principle 6 were it not for evidence that it would have caused Mr Jones serious financial hardship. During the relevant period, Mr Jones was CF1 director and a mortgage adviser at Which Mortgage, where he breached Principle 6 by failing to ensure that the Firm had appropriate controls to verify information submitted by clients to support mortgage applications which led to the Firm being used to facilitate financial crime.

" derek-jones.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 FCA and PRA publications:

3 May: Responses to the FSA's Discussion Paper on Transparency (FSA DP13/1). The FCA has published non-confidential responses to the FSA's discussion paper on transparency which closed on 26 April 2013. The FCA is currently reviewing these responses and in June 2013 will publish a Feedback Statement summarising the key messages and its response.

2 May: FCA publishes findings of review into interest-only mortgages and reaches agreement with lenders to contact interest-only borrowers. The FCA has published its research into consumers' ability to repay their interest-only mortgages when they mature. The findings show that many people should be in a good position to repay their mortgage when it is due for repayment. However many borrowers, particularly those whose mortgage is due to be repaid before 2020, will need to take control of their mortgage repayment planning now. To this end, the FCA is working to ensure lenders contact borrowers in order to prompt them into checking that their repayment plan is on track. By acting now the FCA is aiming to prevent interest only borrowers defaulting on their loans in the future.

29 April: FCA Handbook Notice No. 1. The FCA has published its Handbook Notice No.1, setting out a number of changes made to the FCA Handbook by the FCA Board on 25 April 2013. These include minor corrections, administrative changes and additions to the FCA Handbook.

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):

2 May: FOS consultation paper: Updating the scope of its voluntary jurisdiction. The FOS has published a consultation paper setting out the amendments that it proposes to make to the scope of its voluntary jurisdiction, as set out in the Dispute Resolution: Complaints sourcebook (DISP) of the FCA Handbook. These proposals are to widen the scope of its voluntary jurisdiction to include activities which, if they had been carried out in the UK, would have been covered by the compulsory jurisdiction or consumer credit jurisdiction. Responses to this consultation must be received by 29 May 2013. consultations/vj-consultation-may2013.pdf

30 April: Ombudsman News: Issue 109. The FOS has published issue 109 of its ombudsman news. The publication includes:

Discussion of typical problems regarding payday lending, with case studies illustrating some of the more common issues and complaints

An interview with Liz Brackley, the new FOS service development director, where she describes her role, future challenges and how the FOS will adapt to deal with these

Case studies of common complaints about individual savings accounts (ISAs) ombudsman-news/109/issue109.pdf

London Stock Exchange (LSE):

No new developments this week.

Legislative updates

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

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

In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (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

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’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.


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.


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 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.


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.


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.


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.


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

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

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

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