UK: Weekly Financial Services Regulatory Update - Week to 17.01.14

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.

Consultation papers:

No new developments this week.

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

15 January 2014: Three arrested in FCA boiler room investigation. The FCA, with the assistance of the City of London Police, has executed search warrants at six addresses in Kent, Essex, and Bedfordshire. Three individuals were arrested and interviewed in connection with an investigation into boiler room activity. three-arrested-in-fca-boiler-room-investigation


No new developments this week.

Final notices:

13 January 2014: FCA Final Notice 2014: Residential Facilities Management Limited. The FCA has issued a Final Notice cancelling the permission granted to Residential Facilities Management Limited (Residential Facilities) under the Financial Services and Markets Act 2000 (FSMA). Residential Facilities failed to comply with the regulatory requirement to submit its Retail Mediation Activities Return and has not been open and co-operative in all its dealings with the FCA. It has therefore failed to comply with Principle 11 of the FCA's Principles for Businesses (dealing with regulators in an open and cooperative way), and to satisfy the Threshold Conditions in relation to the regulated activities for which it had permission. documents/final-notices/2014/ residential-facilities-management-limited

13 January 2014: FCA Final Notice: Usman International UK Limited. The FCA has issued a Final Notice cancelling the registration granted to Usman International UK Limited (Usman) as an Authorised Payment Institution under the Payment Services Regulations. Usman failed to submit the Authorised Payment Institution Capital Adequacy return, and to respond adequately to repeated FCA requests that it submit this. This has led the FCA to conclude that Usman failed to demonstrate a readiness and willingness to comply with its ongoing regulatory obligations and to deal with the FCA in an open and co-operative way.

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:

17 January 2014: FCA update on independent review of Royal Bank of Scotland's treatment of business customers in financial difficulty. The FCA has appointed Promontory Financial Group and Mazars to conduct an independent skilled persons report under section 166 of FSMA. The report will examine Royal Bank of Scotland's treatment of business customers in financial difficulty and consider allegations of poor practice set out in the report by Dr Lawrence Tomlinson. The FCA expects to publish the outcomes from the review in the third quarter of 2014.

16 January 2014: FCA FG14/1 - Supervising retail investment advice: inducements and conflicts of interest. The FCA has published finalised guidance on inducements, making it clear that financial advisers and product providers share the responsibility of managing potential conflicts of interests when receiving and making payments under service and distribution agreements. The guidance follows a review that found payments were still being made that could result in advisory firms favouring one product provider over another, undermining the aims of the Retail Distribution Review (RDR).

Finalised guidance: supervising-retail-investment-advice-inducements-and-conflicts-of-interest

Press release:

16 January 2014: ICO finds FCA breached FOIA. The Information Commissioner's Office (ICO) has published a decision notice (dated 7 January 2014) relating to a complaint from an individual about the FCA's refusal to comply with a request for information under the Freedom of Information Act 2000 (FOIA). While investigating the FCA's response to the information request, the ICO became aware of the possibility that the complainant and the FCA shared different interpretations of the scope of the request. In the light of this, and taking other factors into account, the ICO decided that the FCA failed to act on the complainant's intended alternative reading of the request and was in breach of section 1(1) (rights of access) of the FOIA. fs_50496791.pdf

15 January 2014: FCA webpage on local authorities and interim permission for consumer credit activities. The FCA has published a new webpage advising local authorities that some of their consumer credit lending activities are to be regulated, and authorities that carry out these activities will have to register with the FCA for interim permission before 1 April 2014 (when consumer credit regulation transfers from the OFT to the FCA). In the past, many local authorities have not been required to hold an OFT consumer credit licence, however, from 1 April 2014, where a local authority carries on certain unsecured lending this will be regulated by the FCA. The FCA will provide further information on the activities requiring permission when the draft secondary legislation has been made. consumer-credit-interim/local-authorities

14 January 2014: FCA Board appoints three new members to the Regulatory Decisions Committee. The FCA Board has appointed three new members to the Regulatory Decisions Committee (RDC): Dame Elizabeth Neville (the former chief constable of Wiltshire Police), Pauline Wallace (a former senior partner at PwC), and Peter Craddock (former Group Operations Director at Perspective Financial Group Limited).

14 January 2014: PRA Solvency II Q&As. The PRA has published Q&As relating to the Solvency II Directive. The Q&As were collated at the PRA's Solvency II industry briefings held on 12 December 2013 and cover:

  • Proportionality
  • PRA's supervisory statement on preparing for Solvency II (SS4/13)
  • Standard formula
  • Early warning indicators
  • Trialogue discussions during the fourth quarter of 2012
  • PRA's approach for third country branches solvency2/qadecember2013.pdf

13 January 2014: FCA policy development update no 9. The FCA has published its policy development update for December 2013 (PDU no 9), which summarises the publications that the FCA proposes to publish. The update also indicates the changes to the publishing schedule set out in the FCA's PDU no 7, published on 5 November 2013. 009.pdf

UKLA publications:

No new developments this week.

Upper Tribunal (Tax and Chancery Chamber):

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:

17 January 2014: Council of EU publishes revised text of MCD. The Council of the EU has published the revised text of the proposed Mortgage Credit Directive (MCD). The European Parliament adopted the provisional text of the proposed MCD at first reading at its plenary session on 10 December 2013. en13.pdf

17 January 2014: European Parliament to consider CSMAD proposal at 3 to 6 February 2014 plenary session. The European Parliament has updated its procedure file on the proposed Directive on criminal sanctions for insider dealing and market manipulation (CSMAD). The procedure file now indicates that Parliament will consider the CSMAD at its 3 to 6 February 2014 plenary session. The CSMAD, together with the proposed Regulation on insider dealing and market manipulation (MAR), make up the MAD II legislative proposals that will replace the Market Abuse Directive (MAD).

17 January 2014: European Parliament to consider MLD4 at 2 to 3 April 2014 plenary session. The European Parliament has updated its procedure file on the proposed Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (known as the Fourth Money Laundering Directive or MLD4). The procedure file now indicates that Parliament will consider MLD4 at its 2 to 3 April 2014 plenary session.

15 January 2014: Draft statutory instruments on FCA consumer credit regulation published. Draft versions of the following statutory instruments have been published on

The Financial Services and Markets Act 2000 (Consumer Credit) (Designated Activities) Order 2014: specifies the circumstances under which an authorised person will be guilty of a criminal offence if they carry on certain consumer credit regulated activities

The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014: specifies additional credit-related activities that should be treated as regulated activities for the purposes of the Financial Services and Markets Act 2000 (FSMA)

These Orders have been laid before Parliament and must be approved by a resolution of each House of Parliament before they can be made. The Orders relate to the transfer of consumer credit regulation from the OFT to the FCA, which will take place on 1 April 2014.

The Financial Services and Markets Act 2000 (Consumer Credit) (Designated Activities) Order 2014: http://www. ukdsi_9780111108352_en.pdf

The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014: http://www. ukdsi_9780111108376_en.pdf

14 January 2014: Trialogue agreement on MiFID II. The European Parliament has published a press release announcing that informal political agreement in trialogue has been reached on the proposed MiFID II Directive and the proposed Markets in Financial Instruments Regulation (MiFIR) (the MiFID II legislative proposals). The MiFID II legislative proposals will replace and recast the Markets in Financial Instruments Directive (MiFID).

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.