UK: Weekly Financial Services Regulatory Update - Week to 24.01.14

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.

Consultation papers:

21 January 2014: The PRA Rulebook – CP2/14. The PRA has published consultation paper CP2/14 setting out proposed changes to rules and policy material in the PRA Handbook. It is the first in a series of planned consultations over two years aimed at reshaping the Handbook material inherited from the FSA. Key issues covered are:

  • Proposal to replace the six Principles for Business with the Fundamental Rules
  • Addressing the recommendation by the Parliamentary Commission on Banking Standards that the Principles should be amended to include a requirement that a bank must operate in accordance with the safety and soundness of the firm and that directors' responsibilities to shareholders are to be interpreted in the light of this requirement

The consultation will close on 21 March 2014.

20 January 2014: FCA CP14/1: Financial Services Compensation Scheme – management expenses levy limit 2014/15. The FCA and PRA have published a joint consultation paper (CP14/1) outlining proposals for the management expenses levy limit (MELL) for 2014/15. Under the Financial Services and Markets Act 2000 (FSMA) the FCA and PRA must set a limit on the total management expenses levied, that gives the Financial Services Compensation Scheme (FSCS) adequate resources to perform its functions efficiently and economically and provide a responsive and well-understood compensation service for financial services consumers. Comments should be sent to the FCA by 17 February 2014.



Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

No new developments this week.


No new developments this week.

Final notices:

24 January 2014: FCA Final Notice: 7722656 Canada Inc formerly carrying on business as Swift Trade Inc. The FCA has issued a Final Notice fining 7722656 Canada Inc (formerly carrying on business as Swift Trade Inc) GBP 8,000,000 for engaging in market abuse. The original Decision Notice fining Swift Trade was issued on 6 May 2011. In 2011 Swift Trade referred the decision to the Upper Tribunal (Tax and Chancery Chamber), which upheld the decision, and it subsequently appealed to the Court of Appeal, which dismissed the appeal on 19 December 2013, leading to this Final Notice.

23 January 2014: Standard Bank PLC fined GBP 7.6 million for failures in its anti-money laundering controls. The FCA has issued a Decision Notice fining Standard Bank GBP 7,640,400 for failing to comply with Reg. 20(1) of the Money Laundering Regulations. Standard Bank failed to take reasonable care to ensure that all aspects of its anti-money laundering policies were applied appropriately and consistently to its corporate customers connected to politically exposed persons in the period between 15 December 2007 and 20 July 2011.

Press release:

Decision notice:

Application refusals:

No new developments this week.

Approved person refusals:

No new developments this week.

Research publications:

No new developments this week.

Other FCA and PRA publications:

24 January 2014: PRA Administration Instruments. The PRA has published the following Administration Instruments:

  • PRA 2013/25 Handbook Administration Instrument (No 2) 2013: an administration instrument making corrections to the glossary, the Statements of Principle and Code of Practice for Approved Persons (APER), the General Provisions sourcebook (GEN), the Fees manual (FEES), the Prudential sourcebook for Banks, Building Societies and Investment Firms (BIPRU), the Prudential sourcebook for Insurers (INSPRU), the Prudential sourcebook for Friendly Societies (IPRU(FSOC)), the Interim Prudential sourcebook for Insurers (IPRU (INS)), the Supervision manual (SUP), the Compensation sourcebook (COMP), and the Building Societies Regulatory Guide (BSOG)
  • Handbook Administration Instrument (No 1) 2014: a consultation on a further administration instrument making corrections to the glossary, Senior Management Arrangements, Systems and Controls sourcebook (SYSC), the Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU), the Interim Prudential sourcebook for Insurers (IPRU (INS)), the Supervision manual (SUP), and the Credit Unions sourcebook (CREDS). Comments should be sent to PRA-. by 7 February 2014

23 January 2014: FCA publishes undertaking by Kensington Mortgage Company Ltd regarding unfair contract terms. The FCA has published an undertaking given by Kensington Mortgage Company Ltd under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), relating to the fairness of some of its terms in one of its mortgage policies (the Kensington's Money Partners Ltd Mortgage Conditions Booklet 2004). Kensington agreed to change terms to make it clear when it could demand immediate repayment of the debt from a customer, and it has undertaken not to rely on a term that allows it to change the amount of the monthly mortgage payment for whatever reason the firm wants. Kensington has also acknowledged that two of its terms were not in plain, intelligible language. Kensington has agreed to treat all customers as being subject to the new terms set out in the undertaking and not to rely on the potentially unfair aspects of the original terms.

20 January 2014: FCA Handbook instrument on CRD IV reporting guidance. The FCA has published the Capital Requirements Directive IV (Reporting Guidance) Instrument 2014 (FCA2014/1), which makes amendments to Annex 25G to chapter 16 of the FCA's Supervision manual (SUP), which sets out guidance notes for data items in SUP 16 Annex 24R. The amendments appear to be consequential changes relating to the UK's implementation of CRD IV. The instrument came into force on 20 January 2014.

20 January 2014: PRA to consult on PCBS remuneration recommendations in April 2014. The UK Parliament has published a transcript of oral evidence given on 15 January 2014 by Mark Carney, Governor of the Bank of England, to the House of Commons Treasury Committee. Dr Carney announced that the PRA intends to consult in April 2014 on implementing the remuneration recommendations of the Parliamentary Commission on Banking Standards (PCBS). Issues that the PRA will consider will include lengthening the deferral of compensation to more than five years and the claw back of past compensation as well as deferred compensation.

17 January 2014: FCA consumer credit licence rebate scheme. The FCA has published a new webpage setting out information relating to its consumer credit licence rebate scheme. Eligible consumer credit firms that have not already received an email or letter from the FCA about the rebate scheme can register for the scheme from the webpage. The registration form also enables consumer credit licence holders to view the status of their rebates.

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:

23 January 2014: Consumer Rights Bill introduced into Parliament. The Consumer Rights Bill has been introduced to the House of Commons, and will now begin its Parliamentary progress. Explanatory Notes to the Bill have also been published.

The Bill will reform and consolidate much of consumer law in the UK, including the rules on unfair terms, rights and remedies for defective goods, services and digital content, enforcement powers of public enforcers and introduce enhanced consumer measures that can be imposed on businesses. It also includes the reform of consumer collective actions for anti-competitive behaviour.

Consumer Rights Bill:

Explanatory Notes:

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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