UK: Financial Regulatory Developments (FReD) - 17 January 2014

Last Updated: 17 January 2014

UK Government and Parliament


Treasury publishes draft consumer credit SIs: Treasury has published in draft:

  • the Financial Services and Markets Act 2000 (FSMA) (Consumer Credit) (Designated Activities) Order 2014, which will specify debt collecting and entering into a consumer credit agreement as lender as activities which are a criminal offence if carried on without authorisation or exemption; and
  • the FSMA (Regulated Activities) (Amendment) Order 2014, which makes further changes to the Regulated Activities Order in respect of the new consumer credit regulated activities, and a number of consequential changes to other legislation.

(Source: Draft FSMA (Consumer Credit) (Designated Activities) Order and Draft FSMA (Regulated Activities) (Amendment) Order 2014)

DECC proposes change to Green Deal consumer credit rules: The Department for Energy and Climate Change (DECC) has published a draft statutory instrument addressing the treatment of Green Deal plans under the Consumer Credit Act. The amendments give clarification on who will be treated as the debtor for the purposes of the Act. (Source: DECC Proposes Change to Green Deal Consumer Credit Rules and Further Feedback on Green Deal Changes)


High Cost Credit Bill to get second reading: The High Cost Credit Bill, the Private Members' Bill introduced to the Commons in summer 2013 is to resume its second reading on 28 February. The Bill aims to regulate the provision and providers of high cost credit. (Source: High Cost Credit Bill to Get Second Reading)

HM Treasury (Treasury)

Treasury publishes investment bank administration review: Treasury has published Peter Bloxham's final review of the Investment Bank Special Administration Regulations 2011 (SAR). The review makes several recommendations in many areas of the SAR, including several complex recommendations on how the SAR and FCA client assets regime should work better together. (Source: Treasury Publishes Investment Bank Administration Review)

Treasury publishes Banking Reform Act impact assessments: Treasury has published its final impact assessment on key measures introduced by the Financial Services (Banking Reform) Act 2013. The assessments cover:

  • ring-fencing and depositor preference;
  • bail-in;
  • payment systems regulator; and
  • the special administration regime.

(Source: Treasury Publishes Banking Reform Act Impact Assessments)

Treasury updates sanctions: Treasury has updated the sanctions lists in respect of Al Qaida. (Source: Treasury Updates Sanctions)

Bank of England (BoE)

FPC publishes statement on use of macroprudential tools: BoE's Financial Policy Committee (FPC) has published its statement of policy on the circumstances where it may use its powers of direction over the countercyclical buffer and sectoral capital requirements. The document sets out indicators that will inform FPC's decisions, including measures of balance sheet stretch and of conditions in the financial markets. Nevertheless, FPC may use judgement based on additional information and market intelligence. As an example, FPC says that data on the easing of covenant restrictions and of fall in collateral quality could have helped to anticipate the financial crisis.

(Source: FPC Powers to Supplement Capital Requirements)

UK Financial Services and Markets Regulators

Financial Conduct Authority (FCA)

FCA updates on IRHPs: FCA has published its regular update on how banks are addressing possible mis-sales of interest rate hedging products (IRHPs). By the end of December, the banks involved in FCA's survey reported completion of 99% of their sophistication assessments with a 78% opt-in rate from customers who had opted to join the review. 48% of compliance assessments on those customers are complete, with a 96% rate of findings of unsuitable products. £156.8 million in redress has been paid, with around 17,000 customers still in various stages of the redress assessment. FCA commented that, as expected, the pace of the review has increased, and it urges the 3,700 customers who have not yet opted in to it to do so. The four largest banks are progressing as projected, with most slightly ahead of projection, and all aim to have finished by the end of June. (Source: FCA Updates on IRHPs)

Up next from FCA: FCA's latest policy development update highlights as key publications in the first quarter of 2014:

  • feedback on policy proposals and consultation on rates proposals for 2014/15 fees and levies;
  • consultation on the Financial Services Compensation Scheme management expenses levy;
  • policy statement on payments for referrals to discretionary investment managers and reporting of complaints against retail investment advisers;
  • policy statement on regulatory approach to crowdfunding; and
  • policy statement on the detailed proposals for FCA's consumer credit regime (not until February at the earliest).

(Source: Policy Development Update No 9)

FCA updates on AIFMD: FCA's latest update to its pages on the Alternative Investment Fund Managers Directive (AIFMD) explains how FCA plans to handle applications for the status of alternative investment fund manager (AIFM) and reminds firms of the importance of submitting complete applications. (Source: FCA Updates on AIFMD)

Prudential Regulation Authority (PRA)

PRA updates Solvency II pages: PRA has updated its website to bring firms up to date with its preparations for Solvency II. (Source: PRA Updates Solvency II Pages)

PRA updates on FSCS coverage: PRA has updated its website to provide details of banks, building societies and insurers and related brands that are covered by the Financial Services Compensation Scheme (FSCS). (Source: PRA Updates on FSCS Coverage for Banks and Building Societies and PRA Updates on FSCS Coverage for Insurers)

Other Regulators/Authorities/Industry Associations

Association of British Insurers (ABI)

ABI publishes MPI product guide: ABI has published a guide for providers, administrators and retailers of mobile phone insurance (MPI). The guide covers product governance and design, terms and conditions, sales practice, claims and complaints. (Source: ABI Publishes MPI Product Guide)

Bank for International Settlements (BIS) / Basel Committee on Banking Supervision (Basel Committee)

Basel Committee makes progress in liquidity and leverage standards: The Basel Committee has published several documents related to the leverage and liquidity requirements under the Basel III prudential framework:

  • amended leverage ratio framework and disclosure requirements, which allow a reduction of the exposure measure via netting of securities financing transactions, use of cash variation margin in derivatives transactions, smaller credit conversion factors for off-balance sheet exposures, and the recognition of the maximum potential loss under a credit derivative;
  • consultation on revised net stable funding ratio (NSFR), which focuses on better capturing volatile funding sources, reducing cliff effects and aligning the NSFR with the liquidity coverage ratio (LCR); and 
  • final LCR disclosure standards and template, and related Guidance for Supervisors on Market-Based Indicators of Liquidity and confirmation that central banks' committed liquidity facilities will be acceptable in situations where there are insufficient liquid assets available.

(Source: Amendments to Basel III's Leverage Ratio, Revisions to the NSFR Proposed and Work on the LCR Finalised)

Basel Committee publishes AML guidelines: The Basel Committee has published its final guidelines recommending how banks should include the management of risks related to money laundering (AML) and financing of terrorism within their overall risk management framework. (Source: Basel Committee Publishes AML Guidelines)

British Bankers' Association (BBA)

BBA responds on stress testing UK banks: BBA and the Building Societies Association (BSA) have responded to the BoE's discussion paper on a framework for stress testing the UK banking system. They raise several key points on the design and publication of stress tests, and on supervisory action deriving from them. On the latter, they ask for:

  • clarification on the extent to which the Pillar 2B capital buffer can be used during periods of stress;
  • confirmation that a breach of the leverage ratio will not be considered a breach of prudential regulatory requirements; and
  • reconsideration of BoE's and PRA's approach, where they deem that an institution requires recapitalisation, to withdrawing permissions, changing management or issuing immediately executable management actions.

(Source: BBA Responds on Stress Testing UK Banks)

International Swaps and Derivatives Association (ISDA)

ISDA publishes EMIR delegated reporting agreement: ISDA and the Futures and Options Association have published an agreement to help market participants meet their reporting obligations under the European Market Infrastructure Regulation (EMIR) by providing a bilateral standard form of reporting delegation agreement under which a "reporting delegate" may, on the client's behalf, report relevant data to a trade repository or ESMA.

(Source: ISDA Publishes EMIR Reporting Delegation Agreement)

National Association of Pension Funds (NAPF)

NAPF publishes derivatives and risk management guide: NAPF, in collaboration with JP Morgan, has published a guide to help UK pension funds understand and use derivatives and risk management. (Source: Derivatives and Risk Management Made Simple)

Recent Publications

New this week

Regulators respond to roar of crowdfundingEmma Radmore and Juan Jose Manchado have written an article for Compliance Monitor on the FCA's views on, and proposals for the regulation of, crowdfunding.

Financial Crime 

The Bribery Act – Has It Made A Difference?: We have updated our previous overview of the Bribery Act to take into account the Serious Fraud Office's latest guidance. (updated October 2012)

UK authorities move forward on tougher financial crime prevention: Emma Radmore wrote an article for Financial Regulation International on current consultations on sentencing and deferred prosecution agreements. (August 2013)

Sanctions restrictions do not prevent payment of debtsRichard Caird and Tom Rocher comment on the judgement in DVB Bank SE and others v. Shere Shipping Company Limited and others. (August 2013)

Deferred Prosecution AgreementsEmma Radmore has written an article for Financial Regulation International on the introduction of Deferred Prosecution Agreements in the UK. (June 2013)

Anti-Bribery and Corruption Laws in Key Jurisdictions: Lawyers from Dentons offices in six jurisdictions prepared a table comparing key provisions of anti-corruption laws for Thomson Reuters Compliance Complete. (May 2013)

Preventing Financial CrimeEmma Radmore has written an article for Financial Regulation International on recent developments in financial crime prevention. (April 2013)

The Evolving Financial Sanctions Landscape – UK and US Perspectives: Emma Radmore, Thomas Laryea, Michael Zolandz and Peter Feldman have written an article for Financial Regulation International on financial sanctions under the UK and US regimes. (November 2012)

Dealing with Anti-Corruption Laws – the Bribery Act and FCPA in Context: This article summarises the effects of the Bribery Act and US Foreign Corrupt Practices Act. For further information, please contact Emma Radmore or Dominic Sedghi (London), or Michelle Shapiro (New York). (May 2012)

Investment Services and Markets Reform

Consumer Credit Regulation: Are you ready for the seismic shift?: Please contact Andrew BarberEmma Radmore or Howard Cohen if you have any questions about what you need to do to prepare for the transfer of consumer credit regulation to FCA.

Are you clear on EMIRRosali Pretorius and Emma Radmore have written an article for Compliance Monitor on EMIR's application and recent developments. (October 2013)

Mobile Banking - FCA sets out the risks: Candice ChapmanAndrew Barber and Winston Green comment on FCA's thematic review of mobile banking. (See also FReD 30 August.) (August 2013)

Mobile Network Operator BillingAndrew Barber and Alex Haffner have written an alert on the effects of the Payment Services Directive on the development of direct-to-phone-bill purchases by mobile network operators. (August 2013)

US Government announces six-month delay in FATCA rules: John Harrington, Jeffrey KoppeleMarc Teitelbaum and Jerome Walker have written an update on the delay in implementing certain elements of FATCA. (July 2013)

Take aim for AIFMD implementationEmma Radmore and Kam Dhillon have written an article for Compliance Monitor on the final steps towards implementation of the AIFMD. (July 2013)

Taking the Credit - the Transfer of Consumer Credit Regulation: Andrew Barber, Emma Radmore and Juan Jose Manchado have written an article for Compliance Monitor on the transfer of consumer credit regulation to FCA. (April 2013)

Last Lap to Legal Cut-Over: Emma Radmore has written an article for Compliance Monitor on FSA's first two consultations on preparing for the new regulatory regime. (January 2013)

A New Handbook for a New Era?: Emma Radmore has written an article for Thomson Reuters Compliance Complete on FSA's proposals to update the General Provisions Sourcebook for legal cut-over. (October 2012)

Treasury Publishes Banking Reform Bill: Read our summary of the Bill implementing the Vickers reforms into FSMA. (October 2012)

RDR: How Long Can it Last?: Emma Radmore and Andrew Barber have written an article for Compliance Monitor on the future of the Retail Distribution Review. (October 2012)

What's next for LIBOR? Summary of the Wheatley Review Recommendations: We have written a summary of the Wheatley 10-point plan for the reform of the LIBOR process. (September 2012)

Rate Setting and Regulation: In Everyone's Interests?: Rosali Pretorius and Katharine Harle wrote an article for Financial Regulation International on the background to LIBOR setting and potential regulatory action. (August 2012)

Money through your mobile – regulation of m-payments: Andrew Barber and Emma Radmore have written an article for Compliance Monitor on the regulatory aspects of mobile payments. (May 2012)

MiFID 2 – Prescription and Change: Emma Radmore wrote an article for Compliance Monitor on the breadth of the proposals to amend the Markets in Financial Instruments Directive (MiFID 2). (January 2012)

Prudential Regulation

UK Treasury Publishes Banking Structure Reform Plans: This article summarises the June 2012 White Paper on implementation of structural change to UK banking (as covered in FReD 15 June). For more information, please contact Rosali Pretorius, Emma Radmore or Andrew Barber. (June 2012)

EU Living Wills Plans – the Key Proposals: This article is the latest in our suite of articles about Living Wills and Recovery and Resolution Plans looks at the European Commission's proposals. For further information, please contact Rosali Pretorius or Andrew Barber. (June 2012)

Living Wills update: We have produced an update on FSA's current plans for Recovery and Resolution Plans. For further information, please contact Rosali Pretorius or Andrew Barber. (May 2012)

Asset management

The Alternative Investment Fund Managers Directive – Theory Becomes Reality: Rosali Pretorius and Emma Radmore wrote an article on implementation of the AIFMD for the Global Asset Management & Servicing Review 2013/14 published by Euromoney Yearbooks.

Product Regulation

More Protection for Retail Markets – the EU's PRIPs Package: We have written a detailed summary of the PRIPS, IMD2 and UCITS V proposals. (July 2012)

Another Stable Door?: Emma Radmore and Katharine Harle wrote an article for Thomson Reuters Complinet on IOSCO's proposals for complex product distribution. (April 2012)

Enforcement and Litigation

It is not a misrepresentation to state interest rate swaps carry no premium: Sam Coulthard, Richard Caird and Thomas Rocher have written an article on the summary in another swap mis-selling claim, Nextia Properties Limited v. National Westminster Bank plc and The Royal Bank of Scotland plc. (December 2013) 

Court of Appeal dismisses interest rate swap appeal: Richard Caird and Kattalin Truman have written a briefing on the Court of Appeal judgment in the appeal by Mr Green and Mr Rowley against the decision that RBS had not missold an interest rate swap. (October 2013)

Appeal dismissed in first interest swap case: Richard Caird and Kattalin Truman have written an article on the Court of Appeal's decision in the first interest rate swap case in the English courts. (August 2013)

It's all in the detail: a cautionary tale for handling complaintsRichard Caird and Felicity Ewing have written an article on the FCA's fine on Policy Administration Services.

Having Your Cake and Eating It: FOS Award is no Bar to Issuing ProceedingsKatharine Harle has written an article for Compliance Monitor on the High Court award in Clark and another v. In Focus Asset Management & Tax Solutions Ltd. (January 2013)

The Not So Remote Risks of Recommendations: Richard Caird, Sam Coulthard and Kattalin Truman have written an article on the case of Rubenstein v. HSBC Bank plc. (September 2012)

The Long Arm of FSA: Overseas Firms and Senior Management Beware: Emma Radmore and Katharine Harle have written an article for Compliance Monitor on the lessons from recent FSA enforcement cases involving overseas firms and their approved persons. (August 2012)

More Confusion on Client Money: Rosali Pretorius and Josie Day have written an article on the Supreme Court decision in the Lehman client money case. (March 2012)

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.

Events from this Firm
21 Sep 2017, Seminar, London, UK

Is there such a thing as "energy law"? What do "energy lawyers" do? And why should it be of interest to anyone else?

28 Sep 2017, Seminar, London, UK

On 26 July the FCA published its long-expected consultation paper on the extension of the SMCR to all FCA-authorised firms. The so-called "core regime" introduces the key concepts of regulator-approved senior managers, firm-approved certification staff and conduct rules applicable to virtually all staff.

3 Oct 2017, Conference, Zurich, Switzerland

As the founding Partner of the Europe-Iran Forum, Dentons Europe will once again support this year’s event. This compelling event which explores all Iran-related topics will take place in Zürich on 3rd and 4th October.

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.