Worldwide: Financial Regulatory Developments (FReD) – 10 April 2015

Last Updated: 13 April 2015

European Union and International

European Banking Authority (EBA)

EBA publishes equivalence recommendation: EBA has published a recommendation indicating the equivalence of the confidentiality regimes of certain non-EU countries to the EU confidentiality regime. The recommendation should help non-EU countries to participate in supervisory colleges overseeing international banks, led by EU supervisors. The recommendation covers Bosnia and Herzegovina, Brazil, Canada, China, FYR Macedonia, Mexico, Montenegro, Serbia, Singapore, Switzerland, Turkey and the US. The review considered the relevant authorities' treatment of the notion of confidential information, professional secrecy requirements, restrictions on the use and disclosure of confidential information. EBA now asks EU authorities to notify it as to whether they comply or intend to comply with the recommendation by 2 June. (Source: EBA Issues Recommendation on Equivalence of Non-EU Authorities for Participation in Supervisory Colleges)

European Insurance and Occupational Pensions Authority (EIOPA)

EIOPA publishes amended work plan: EIOPA, like ESMA before it, has reprioritised its work plan for the year to align it with its budget. It says it has had to cut 27 projects from the programme completely, and reduced or changed over 40 more. Solvency 2 is its highest priority but EIOPA says the cuts have affected some of its initiatives here. (Source: EIOPA Publishes Amended Work Plan)

European Securities and Markets Authority (ESMA)

ESMA launches MiFIR and EMIR centralised data programmes: ESMA has announced that national supervisors have asked it to provide them with databases that will provide a:

  • central facility in relation to instrument and trading data and the calculation of the Markets in Financial Instruments Regulation (MiFIR) transparency and liquidity thresholds (the Instrument Reference Data Project); and
  • single access point to trade repositories data under the European Market Infrastructure Regulation (EMIR) (the Trade Repositories Project).

ESMA will collect data from 300 trading venues and 5,000 counterparties and make it available to national supervisors. (Source: ESMA Launches MiFIR and EMIR Centralised Data Programmes)

UK Government and Parliament

Parliament

Treasury Committee looks at secondment risk: Martin Wheatley has written to the Treasury Committee in response to the Committee's concern that retail banks' and asset managers' use of secondees from advisory firms might create a conflict of interest. The letter says FCA has looked at 10 firms and considered their use of free or cheap secondees. It has concluded there is no widespread practice either of acting in this way, or of any consumer detriment and so it will not be investigating further. (Source: Treasury Committee Looks at Secondment Risk)

Bank of England (BoE)

BoE publishes FPC meeting record: BoE has published details of the Financial Policy Committee (FPC) meeting on 24 March. FPC discussed a range of factors impacting the macroeconomic and financial environment, including;

  • global risk, including the dangers to the Eurozone of a Greek default;
  • market liquidity risks;
  • cyber risk;
  • domestic risks, including the rising UK current account deficit;
  • underwriting standards in UK commercial real estate and leveraged loan markets; 
  • banking system resilience, including encouraging CET1 and leverage ration increases among UK banks; and
  • risk to financial stability from climate change, including the move away from fossil fuels, and effects of extreme weather.

As a result of this analysis FPC decided to maintain the countercyclical capital buffer rate for UK exposures at 0%. (Source: Record of the Financial Policy Committee 24 March 2015)

BoE makes FX recommendations: Mark Carney has written to Michael Cross, Chair of the London Foreign Exchange Joint Standing Committee (LFEJSC), regarding the implementation of the Financial Stability Board's (FSB) recommendations for FX benchmarks reform. Mr Carney asks that LFEJSC report on market participants' progress with regards to steps taken:

  • by industry to develop independent netting and execution facilities for transacting fix orders;
  • by market participants to price fixing transactions in a manner that is transparent and consistent with the risk of accepting the transactions;
  • by banks to establish and enforce their internal guidelines and procedures for collecting and executing fixing orders, including separate processes for handling the orders;
  • to ensure no unnecessary information is shared among market-makers about their trading positions;
  • by market-makers to ensure private information is not passed to clients or other counterparties that might enable those counterparties to anticipate the flows of other clients or counterparties, including around the fix;
  • by banks to establish and enforce their internal systems and controls to address potential conflicts of interest arising from managing customer flow;
  • to adopt codes of conduct that describe best practices for trading foreign exchange; and
  • by market participants to more strongly show compliance with the codes of various foreign exchange committees, as well as participants' internal codes of conduct.

Mr Carney requests that the committee report the status of its members as at 30 June and send the report to him by 31 July. (Source: Implementation of FSB Recommendations for FX Benchmark Reforms)

UK Financial Services and Markets Regulators

Financial Conduct Authority (FCA)

Up next from FCA: FCA's latest policy development update highlights, for the next quarter policy statements on:

  • fees and levies;
  • whistleblowing;
  • outstanding issues on the senior manager regime in both May and July; 
  • consumer buy to let mortgages;
  • complaints handling;
  • consumer credit further amendments;
  • guaranteed asset protection competition issues; and 
  • client money rules for insurance intermediaries (before the end of the quarter).

FCA has not yet given a publication date for feedback on its consultations on approved persons and accountability in the banking and insurance sectors. (Source: Policy Development Update No 21)

FCA includes pensions conversion advice within FOS: FCA has made a change to the Dispute Resolution module of its Handbook to bring complaints arising from the new regulated activity of advising on pensions conversion and transfer within the scope of FOS' compulsory jurisdiction from 6 April. (Source: FCA Includes Pensions Conversion Advice Within FOS)

Prudential Regulation Authority (PRA)

PRA issues policy statements: PRA has issued:

  • feedback and a Statement of Policy on policyholder protection. The statement covers:
    • compensation limits: following consultation, PRA has decided not to introduce a cap on large claims, to leave general insurance compensation as proposed, but to increase the compensation on all long-term insurance products to 100%; 
    • successor firms: the Financial Services Compensation Scheme (FSCS) will protect policyholders who have outstanding protected claims against an insurer whose claims were within FSCS scope before the policies transferred to a successor firm; and
    • assignment and subrogation: FSCS will have new powers of automatic and electronic assignment and automatic subrogation of policyholders' rights, which it can use when seeking redress from failed insurers and third parties.

PRA has made Policyholder Protection rules and a Lloyd's direction and rule alongside a Statement of Policy setting out its expectations of FSCS; and

  • documents on depositor guarantees and the dormant accounts scheme together with feedback on previous papers and a further consultation on a few points arising from them. PRA has made:
    • the Depositor Protection, Dormant Accounts Scheme, Management Expenses, and Base Costs and Management Expenses in respect of Relevant Schemes parts of the PRA Rulebook;o consequential minor changes to existing rules;
    • a supervisory statement setting out PRA's expectations in respect of Depositor Protection part of the PRA Rulebook; and
    • statements of policy setting out PRA's expectations of FSCS in respect of Depositor Protection and Dormant Accounts Schemes parts of the PRA Rulebook. 

It asks for comment on the further consultation by 1 May. (Source: PRA Policy Statements on Policyholder Protection and Depositor Protection

PRA updates Solvency 2 approval forms: PRA has published a set of new forms for Solvency 2 approvals, following the European Commission's publication of its Set 1 Implementing Technical Standard. There are 11 new forms. (Source: PRA Updates Solvency 2 Approval Forms)

PRA publishes Part 2 of its Rulebook: PRA has published a policy statement on its creation of the next part of its Rulebook. PRA intends its Rulebook to replace the provisions currently shared with the FCA's Handbook by summer 2015. Part 2 contains:

  • Rulebook glossary terms;
  • verification of standing data rules;
  • general provisions rules;
  • internal governance rules; and 
  • Handbook consequentials.

Alongside these rules, PRA has published: 

  • supervisory statements on internal governance, functions relating to building societies and supervision of building societies' treasury and lending activities; and
  • a statement of policy on its approach to insurance business transfers.

It has also published a derivation and destination table mapping the Handbook rules to the PRA Rulebook. The new rules all took effect on 2 April. (Source: PRA Publishes Part 2 of its Rulebook)

Financial Ombudsman Service (FOS)

FOS publishes ADRD resource: FOS has published an online tool, in the form of an FAQ guide, to the alternative dispute resolution directive (ADRD). The FAQ provides information on the effect of the ADRD, how it will operate in practice and how it will affect the work of FOS. (Source: Our Future Service – and Where the ADRD Fits in)

Other Regulators/Authorities/Industry Associations

International Organisation of Securities Commissions (IOSCO)

IOSCO consults on trading venue and market intermediary risk management: IOSCO has published two consultation papers looking at risk management in trading venues and market intermediaries, with a focus on finding any gaps in business continuity and recovery planning:

  • the consultation on mechanisms for trading venues to effectively manage electronic trading risks and plans for business continuity sets out recommendations to help regulators ensure that trading venues can manage effectively a broad range of evolving risks. It also proposes sound practices the venues should consider when developing and implementing risk mitigation mechanisms and business continuity plans;
  • the consultation on market intermediary business continuity and recovery planning sets out standards and sound practices for regulators when supervising intermediaries but IOSCO suggests it will be useful for intermediaries to use in their planning also.

IOSCO asks for comments by 6 June. (Source: IOSCO Consults on Trading Venue and Market Intermediary Risk Management)

International Swaps and Derivatives Association (ISDA)

ISDA plans centralised swaps clearing principles: ISDA has published a set of principles it believes should help centralised swaps clearing. The key principles reflect:

  • that the trading liquidity of a derivatives contract (and consequently the regulatory obligations to which the contract is subject) should be determined by reference to specific objective criteria, and based on concrete, transparent and objective standards which make it clear to participants when a bilateral swap should move to become a cleared one;
  • that derivatives contracts subject to the trading obligation should be tradable trade on a number of different types of centralised venues, so contracts can be traded across jurisdictions without costly duplicative compliance obligations and regulatory arbitrage; and
  • that trading venues must offer flexible execution mechanisms that take into account the trading liquidity and unique characteristics of a particular category of swap. 

ISDA notes the US Swap Execution Facility (SEF) rules will need to change to comply with these principles. (Source: ISDA Plans Centralised Swaps Clearing Process)

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

BIS updates Basel III FAQ: BIS has updated its FAQs on Basel III monitoring. There are 10 new items which have been inserted. (Source: FAQs on Basel III Monitoring)

Download here.

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 Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
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.

4 Oct 2017, Workshop, London, UK

We are hosting an interactive workshop where we will run a mock High Court trial of an employee competition case – where the members of the audience are the judges. The session, aimed at in-house counsel and HR professionals, will offer an insight as to how disputes involving employees moving to a competitor play out in practice.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.