UK: Weekly Financial Services Regulatory Update (Week To 28.06.13)

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:

28 June: PS4/13 PRA - Regulated fees and levies: rates for 2013/14. The PRA has published a policy statement setting out the final fees rates to recover the PRA's Annual Funding Requirement (AFR) and the Special Project Fee (SPF) for Solvency II. The policy statement summarises the responses the PRA received to its consultation on the fees and levies in April 2013. It states that after considering these responses, the PRA will not be making any changes. Pages/publications/regulatedfeelevies.aspx

28 June: PS13/6 FCA Regulated fees and levies 2013/14 - including feedback on CP13/1 and 'made rules'. The FCA has published a policy statement setting out the 2013/14 periodic regulatory fees and levies rules for the FCA, the Financial Ombudsman Service general levy and the Money Advice Service. The policy statement also summarises the feedback received to CP13/1 and the FCA's response to that feedback.

28 June: FCA PS13/5 Implementation of the Alternative Investment Fund Managers Directive. The FCA has published a policy statement setting out the rules for implementing the Alternative Investment Fund Managers Directive (AIFMD) and responding to the feedback to its consultations in November 2012 (CP12/32) and March 2013 (CP13/9). The policy statement covers issues relating to the scope of the AIFMD, operating requirements and prudential rules for alternative investment fund managers, consumer redress, depositaries, marketing, and remuneration. The rules will come into force on 22 July 2013, although there are some transitional reliefs for firms for up to one year from then. implementation-of-the-aifmd

Press releases:

28 June: FCA reminds banks of their obligations when cancelling Continuous Payment Authorities. The FCA has reviewed how the largest high street banks and mutuals process requests to cancel Continuous Payment Authorities (CPAs). Following this review, these card providers have agreed that they will ensure that when a customer asks for a recurring payment to end - that will be sufficient to cancel the arrangement. They have also agreed that where a payment goes through by mistake following cancellation by a customer, the customer will be refunded immediately. The FCA noted that, particularly in relation to payday loans, some banks and mutual were not cancelling CPAs when asked to do so. However, banks and mutuals must cancel a payment themselves and not require their customer to contact the merchant to cancel the CPA. In addition to this, the largest banks and mutuals have agreed to review every complaint they have received about the non-cancellation of a CPA and to pay redress where payments have continued to be made despite the customer cancelling the arrangement. This applies to all complaints since November 2009.

27 June: FCA review into mobile phone insurance (TR13/2) finds examples of poor product design, unclear terms, and inadequate claims and complaints handling. The FCA has published its key findings following a review focusing on the way mobile phone insurance firms design products and handle claims from customers that have lost or damaged their phone, or had it stolen. The FCA reviewed the practices of nine firms that have a majority share of the mobile phone insurance market. The FCA's findings include:

  • Failings to feed the reasons for high numbers of claim rejections back into the product design process
  • Products that were not always designed to meet the needs of consumers
  • The majority of policies, despite offering to cover loss, did not cover instances where the customer accidentally leaves their phone somewhere
  • Descriptions of what is covered and what is not were too broad and ambiguous
  • Examples of inadequate claims and complaints handling

The FCA has presented the findings to the firms that took part in the review and, in addition, in July the FCA will impose a significant fine on one firm in this market for poor handling of complaints. The publishing of this review is part of a series of FCA reviews into everyday insurance products, with the FCA currently also looking into how insurers use private investigators and how firms handle complaints.

Press release:

Report: 02-mobile-phone-insurance


26 June: Balance of interests. The FCA has published a speech on the balance of interests of participants in the wholesale derivatives market with the interests of the man on the street, delivered by Martin Wheatley, its Chief Executive, at the International Derivatives Expo in London. Acknowledging that the FCA was in the middle of implementing a once-in-a-lifetime reform of derivatives markets, Mr Wheatley noted that there was plenty to debate, particularly over global regulatory reform, and that there was no simple formula for the balance of interests.

After describing the recent explosion in the trading of derivatives accompanied by the inability of firms and regulators to aggregate information on highly complex risks and exposures in the derivatives market during past boom years, Mr Wheatley outlined the FCA's new style of regulation. Under this new approach, the FCA will look more actively at trends, innovations and data to monitor risk and deal with it early. It will also look far more closely at outcomes; ensuring not just whether a firm is complying with rules, but whether customers are being treated fairly. Highlighting the importance of transparency, Mr Wheatley described how over the next 12 to 24 months we will see a greater use of central counterparties, and more organised trading to encourage transparency and restore equilibrium. He noted that the introduction of mandatory trade reporting, the move towards greater central clearing, and the demand for more use of on-venue trading will help manage systematic risk more effectively and restore the balance. Mr Wheatley also outlined the various new technical standards, requirements and other prudential obligations and, while acknowledging that there will be a significant compliance challenge, stated that firms have time to start preparing now and that regulators will not be sympathetic to any future arguments that they had insufficient time to comply.

Finally, Mr Wheatley discussed LIBOR and the future of benchmarks. He commented that despite the uncertainty, there are sound economic and ethical reasons for strengthening the regulation of benchmarking as a whole, and that the wide-ranging review of interest rate benchmarks will be a consultative process engaging with firms in order to identify any transition issues.

Bulletins and newsletters:

No new developments this week.

Final notices:

No new developments this week.

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:

28 June: FCA policy development update No. 3. The FCA has published its policy development update for June 2013 summarising publications issued since the last edition and an updated timetable for forthcoming publications.

27 June: FCA Statement on CRD IV. On 27 June the legislative package known as "CRD IV" was published. The bulk of the rules contained in this legislation will apply from 1 January 2014. This is in line with the expected timetable set out by the FCA in April. The FCA will consult later this summer on the changes to the FCA's rules to remove current FCA provisions covered in the Regulation and to implement the Directive and relevant discretions provided in the Regulation. The FCA will also consult on the specific issues related to the procedure for transitioning, as appropriate, existing waivers.

25 June: FCA Finalised Guidance on super complaints and references. The FCA has published final guidance (FG13/1 and FG13/2) for designated consumer bodies on making a super-complaint under s234C, and for regulated persons and the Financial Ombudsman Service on making a reference under s. 234D. The FCA has also published a summary of the feedback received through the consultation and its responses to the issues raised.

24 June: Regulation round-up June 2013. The FCA has published its monthly regulation round-up email, which provides updates on the latest news affecting different sectors.

UKLA publications:

No new developments this week.

Upper Tribunal (Tax and Chancery Chamber):

27 June: Tribunal upholds FCA ban and significant fine on insurance broker. The Upper Tribunal has upheld the decision of the FCA to ban Andrew Jeffery, director of Jeffery Flanders (Consulting) Limited, and fine him £150,000. This is one of the largest fines imposed on a broker for insurance fraud. The Tribunal found that Mr Jeffery had retained clients' premiums without passing the premiums onto the underwriter, meaning that some clients did not get the cover they paid for and were exposed to risk. His actions also meant that underwriters dealing with Jeffery Flanders were contractually obliged to meet claims, even though they had never received the premium from Mr Jeffery. The Tribunal also described how Mr Jeffery sought to evade the FCA's requirements for information. It remains open to Mr Jeffery to appeal this judgment.

Press release:

Judgment: Documents/decisions/Jeffery_v_fca.pdf

June: Upper Tribunal grants application to amend Statements of Case and for directions in Stephen Robert Allen v FCA. This application relates to a Decision Notice dated 25 July 2012 by which the Authority informed Mr Allen of its decision to make an order prohibiting him from performing any function in relation to any regulated activities. Mr Allen referred the Decision Notice to the Upper Tribunal. The Authority had based its conclusions on evidence of a witness; however, following a High Court ruling that the witness' signed witness statements contained untrue statements, the FCA applied for permission to amend its Statement of Case to remove the references to the evidence of the witness and to rely on other evidence to prove its case. The FCA sought instead to allege that Mr Allen's serious misconduct in those High Court proceedings demonstrated a lack of honesty and integrity and that Mr Allen is not a fit and proper person to perform any functions in relation to regulated activities.

The Tribunal distinguished Parker v FSA, finding that in this case, amendments to the Statements of Case would not change the charge made against Mr Allen. It noted that there is a distinction between an allegation or charge and the evidence relating to it. The 'subject-matter of the reference' to the Tribunal was whether Mr Allen is a fit and proper person, and although the evidence for that allegation had changed, the fundamental allegation remained the same. Therefore any evidence relating to Mr Allen's honesty and integrity, whether or not it was available to the Authority at the time of the Decision notice, could be considered by the Tribunal. In addition to this, the Tribunal found that it would be fair and just to allow the FCA to amend its Statement of Case and admit the new evidence as the alternative was to start the whole process again which would not be fair to either party. The Reference was likely to take place in late 2013 or early 2014, which would give Mr Allen plenty of time to make representations and provide any further evidence in response to the new evidence. decisions/stephen_robert_allen_v_fca_directions.pdf

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.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions