UK: Financial Services Industry Update - 28 February 2014

Last Updated: 14 March 2014
Article by Philip Mackay, Aidan Campbell, Karagh Gilliatt and Kyle Abrey


PRA consults on supervising international banks and branches

The PRA has issued a consultation paper on the supervision of international banks and its approach to branch supervision (CP4/14) to be included as a new Part to its Rulebook, Incoming firms and third country firms. This Part contains proposed rules which require deposit takers and designated investment firms that operate through European Economic Area (EEA) and non-EEA branches to complete a new data collection return, which will become effective in 2015. In addition, it is proposed that non-EEA firms will be required to take all steps within their control to have adequate provision made in resolution plans for UK branches. The draft text can be found in Annex B to CP4/14 and the responses must be submitted by 27 May 2014.

26 February 2014


No information to update.


No information to update.


FCA policy statement on detailed rules for consumer credit regime

The FCA has issued a policy statement on detailed rules for the FCA regime for consumer credit that sets out its final rules for the new consumer credit regulatory regime (PS14/3). PS14/3 contains details of the changes made by the FCA to its original proposals following consultations in October and December 2013.

The majority of the rules set out in PS14/3 will come into force on 1 April 2014 to coincide with the date on which the FCA will take over regulation of consumer credit.

28 February 2014

FCA consults on consumer credit-related amendments to DEPP and EG

The FCA has published a consultation paper on amendments to its Decision Procedure and Penalties Manual (DEPP) and its Enforcement Guide (EG) relating to the FCA's powers to prohibit or restrict EEA authorised payment institution and electronic money institutions from undertaking certain consumer credit business in the UK (CP14/3). A draft FCA Handbook instrument (Consumer Credit (Statutory Notices) Instrument 2014) is included in Appendix 1 to CP14/3. Responses to CP14/3 must be submitted by 14 March 2014.

28 February 2014


FCA publishes notes to assist with completion of AIFMD Schedule of AIFs form for full-scope AIFMs

The FCA has published notes to facilitate the completion of the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) Schedule of AIFs form (which applies to alternative investment funds) for full-scope AIFMs (alternative investment fund managers). The Schedule of AIFs form requires details of those AIFs that an AIFM intends to manage or market or both. This will apply to AIFs domiciled in the UK, the EEA and outside the EEA and those described in Articles 74 and 75 of the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773).

26 February 2014

FCA reports on mortgage lenders arrears management and forbearance

The FCA has published a report (TR14/3) setting out the key findings of its thematic review of mortgage lenders' arrears management and forbearance. Although the FCA found that arrears management in firms has improved since the FSA, it still wants firms to provide better support to front-line staff, provide greater flexibility to support fair treatment of individual customers and to take proactive steps to recognise borrowers vulnerable to potential interest rate rises. The report coincides with the mortgage market review (MMR) which comes into force on 26 April 2014.

See also: accompanying press release

25 February 2014

FCA expectations for firms unable to comply with EMIR risk mitigation requirements for non-cleared trades

The FCA webpage has been updated to include details on its supervisory approach on risk mitigation requirements under EMIR (Regulation 648/2012) for non-cleared trades relating to portfolio reconciliation, dispute resolution and compression. The update notes that firms are expected to have a detailed and realistic plan to achieve compliance with EMIR "within the shortest time-frame possible". These plans should be completed and implemented by 30 April 2014 and firms should be able to demonstrate compliance after this date.

24 February 2014


FCA bans former CEO for lack of integrity

The FCA has published the final notice it has issued to Arnold Eber, the former chief executive officer (CEO) of CIB Partners Ltd (CIB), prohibiting him from performing any function relating to any regulated activity. As CEO and sole director of CIB, Mr Eber demonstrated a lack of integrity by causing CIB to issue inaccurate and misleading information when advising SLS Capital S.A. (a Luxembourg-based special purpose vehicle that issued bonds underpinning investments that were sold to investors in the UK). This information was relied on by third parties as giving some assurance that sufficient asset cover was in place for the SLS bonds making his failings all the more serious. In addition, Mr Eber also failed to be candid and truthful in all his dealings with the FSA.

27 February 2014

FCA fines FXCM £4 million for making unfair profits and failing to make disclosures to the regulator

The FCA has published the final notice it has issued to Forex Capital Markets Ltd and FXCM Securities Ltd, fining them £4 million for retaining the benefit of favourable price movements that should have been passed to customers and for failing to make appropriate disclosures to the FSA concerning these issues. The fines are imposed for breach of Principle 6 (Customers' interests) and the best execution rules set out in section 11.2 of the Conduct of Business sourcebook (COBS) and section 7.5 of the old Conduct of Business sourcebook (COB).

See also: press release

26 February 2014

FCA bans former derivatives trader following Upper Tribunal decision

Following the decision of the Upper Tribunal (Tax and Chancery Chamber) in December 2013, the FCA has published the final notice it has issued to David Hobbs, a former derivatives trader, prohibiting him from performing any function in relation to any regulated activity. The tribunal held that Mr Hobbs was not a fit and proper person to perform functions relating to regulated activities after he presented a false defence to the FSA during the course of its investigation and continued to maintain this position before the tribunal. Mr Hobbs was held to have displayed a distinct lack of integrity in his behaviour.

25 February 2014


No information to update.


The BBA urges Government to support savers

Ahead of the Chancellor's statement on 19 March 2014, the BBA has urged the Government to simplify the ISA regime and introduce a new work-based account to encourage millions of employees to build-up a nest egg as they earn in order to foster a savings culture. This follows evidence that British people have been saving much less compared to their European counterparts over the past three decades. The BBA is also calling for the ISA cash allowance to be raised to the same £11,880 level as that for stocks and shares ISAs for tax year 2014/15. Anthony Browne, the chief executive of the BBA commented: "We think there are some quite simple things the Government could do that would make it easier and more attractive to save. A workplace savings account could encourage millions to put money aside for their futures and more should also be done to make ISAs simpler and more rewarding for savers."

27 February 2014


CML calls for speedy UK consultation on implementing EU mortgage directive

Following the publication of the mortgage credit directive by the European Union, the CML has called for the Treasury and the FCA to begin to consult publicly as soon as possible about how the directive will be implemented and what changes there may be for UK firms and consumers.

Jackie Bennett, the CML's head of policy stated: "Formal publication of the directive finally brings to an end a long period of uncertainty about what European proposals for regulating mortgages will look like. But that means the start of the next stage in the process for UK firms and consumers"

28 February 2013


Finance Bill 2014 to be published on 27 March

The Exchequer Secretary to the Treasury, David Gauke, has announced that the Finance Bill 2014 and accompanying explanatory notes will be published on 27 March 2014. This will follow the 2014 Budget, to be delivered on 19 March 2014.

28 February 2014

Updated FATCA UK implementing regulations guidance published

HMRC has published revised guidance on the UK's Foreign Account Tax Compliance Act (FATCA) implementing regulations which is part of the US Hiring Incentives to Restore Employment Act of 2010. The updated guidance highlights the sections which have been amended since publication in August 2013 and include the discussion of financial institutions (section 2), financial accounts (section 3) and due diligence (section 4).

27 February 2014


Treasury Committee inquiry into SME lending inquiry: terms of reference

The House of Commons Treasury Committee has published a press release announcing the terms of reference for its inquiry into lending to small and medium sized enterprises (SMEs). The press release details the issues which the committee invites written evidence on by 28 March 2013 including whether the regulatory perimeter be expanded to include more lending and selling of financial products to SMEs.

28 February 2014

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