UK: Weekly Financial Services Regulatory Update (Week To 26.04.13)

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:
No new developments this week.

Discussion papers:
No new developments this week.

Policy statements:

26 April: PS13/1 Payments to platform service providers and cash rebates from providers to consumers. The FCA has published a policy statement (PS13/1) setting out its new rules for platform services and responding to the feedback to the FSA's consultation paper CP12/12. The FCA is proceeding with the core proposal that requires a platform service to be paid for by a platform charge disclosed to, and agreed by, the consumer. However, following

feedback, a number of amendments have been made to the rules to allow:

  • Payments for the work incurred correcting a pricing error by the product provider
  • Payments for work incurred in dealing with a corporate action by the product provider
  • Payments for the work incurred in providing the product provider with management information regarding the consumers who are invested in the product
  • Payments in relation to advertising products on the platform

The platform service definition has also been corrected to clarify that execution-only firms or firms that provide custody services are captured by the platform service definition. The new rules will come into effect on 6 April 2014 but platforms will have two years to move existing customers to the new explicit charging model.

Press release: news/platforms-industry

Policy Statement: http://www.fca.

24 April: FCA Statement of Policy on the use of the power to direct qualifying parent undertakings. The FCA has published a policy statement on the use of its power to direct qualifying parent undertakings, which is set out in an appendix to the new FCA handbook. The statement explains that the definition of a qualifying parent undertaking is expected to cover any UK incorporated unauthorised financial parent undertaking in an ownership chain, even if that undertaking is not itself at the head of the ownership chain. The statement also discusses and provides examples of when the FCA will exercise this power.

Press releases:
No new developments this week.

No new developments this week.

Bulletins and newsletters:
No new developments this week.

Final notices:

24 April: FCA fines EFG Private Bank £4.2m for failures in its anti-money laundering controls. The FCA has published a Final Notice dated 28 March 2013 which fines EFG Private Bank Ltd (EFG) £4.2m for breaches of Principle 3 (management and control) which occurred between 15 December 2007 and 25 January 2011. EFG breached Principle 3 by failing to take reasonable care to establish and maintain effective anti-money laundering systems and controls in relation to customers that it identified as presenting a higher risk of money laundering for the purposes of the 2007 Regulations, including those customers deemed to be a politically exposed person. The failings at EFG were deemed to be serious, systemic and continued for more than three years. EFG agreed to settle at an early stage of the investigation and therefore qualified for a 30% discount. Were it not for this discount, the FCA would have imposed a penalty of £6m.

Press release:

Final Notice:

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:

26 April: FCA policy development update No.1. The FCA has published its policy development update for April 2013. The update includes information about recent Handbook-related developments and an updated timetable for forthcoming publications.

23 April: Proposed guidance (GC13/1) on oversight of member controls carried out by recognised investment exchanges (RIEs) and multi-lateral trading facilities (MTFs). The FCA has published a guidance consultation (GC13/1) on proposed guidance that sets out the approach it expects recognised investment exchanges (RIEs) and firms operating multilateral trading facilities (MTFs) to take to ensure an ongoing oversight of the systems and controls, which their member firms operate to comply with the RIE's or MTF operator's rulebook. The FCA has published this guidance because discussions with RIEs and firms operating MTFs have shown there are widely differing approaches to oversight of member firm controls under these provisions. Responses to this proposed guidance must be made by 21 May 2013.

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.

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.

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