Worldwide: Financial Regulatory Developments Focus - 25 June 2014

In this newsletter, we provide a snapshot of the principal European, US and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.


Secondary Legislation on Procedure for Imposing Fines and Periodic Penalty Payments on Trade Repositories

On 19 June 2014, secondary legislation on the procedure for penalties imposed on trade repositories by the European Securities and Markets Authority ("ESMA") was published in the Official Journal of the EU. The legislation, which came into force on 22 June 2014, sets out the procedures to be followed by ESMA in its power to impose fines and periodic penalty payments on trade repositories, deals with rights of defense and rights to be heard processes for trade repositories as well as limitation periods, access to files issues and calculation of periods, dates and time limits.

The legislation is available at:


EBA Decision on Reporting by Competent Authorities to the EBA is Updated

On 19 June 2014, the European Banking Authority ("EBA") published an updated version of its decision (originally taken on 14 January 2014) on reporting by national regulators to the EBA. The decision relates to the implementing technical standards ("ITS") on supervisory reporting under the Capital Requirements Regulation. The reporting dates have been amended so that they are in line with the new dates of the ITS, following the European Commission adoption process. The decision describes what data the EBA would expect to receive from national regulators (i.e. the data that would be collected by national regulators from systemically important institutions) and specifies the criteria to identify these systemically important institutions.

The updated decision is available here:

Federal Reserve Bank Issues FOMC Statement

On 18 June 2014, the Board of Governors of the Federal Reserve System ("Federal Reserve Board") issued a statement from the Federal Open Market Committee ("FOMC") which included economic projections from the FOMC meeting held from 17-18 June 2014.

The full text of the FOMC statement is available at:


European Commission Consults on Contributions by Firms to Resolution Mechanisms

On 20 June 2014, the European Commission launched a consultation on the contribution of banks to the resolution financing arrangements under the Recovery and Resolution Directive ("RRD") and the Single Resolution Mechanism Regulation ("SRMR"). The RRD provides for, amongst other things, the resolution of failing banks and investment firms in Europe. The SRMR implements the RRD for Eurozone banks supervised under the Single Supervisory Mechanism. The consultation relates to the calculation of contributions, proportionality, the weight to be given to the flat part of the contribution vis-à-vis the risk-adjusted part and individual risk indicators. Responses to the consultation are due by 14 July 2014 and will be taken into account in the Commission's preparation of the secondary legislation due under the RRD and the SRMR.

The consultation page is available at:

SSM Mediation Panel and Rules of Procedure Regulation published in OJ

On 20 June 2014, the European Central Bank ("ECB") regulation on the establishment of a mediation panel and rules of procedure relating to the Single Supervisory Mechanism ("SSM Mediation Regulation") came into force. Under the SSM Regulation, the ECB is required to establish a mediation panel and rules of procedure for resolving differences of views expressed by national regulatory authorities of participating member states regarding an objection by the ECB's Governing Council to a draft decision of the Supervisory Board set up under that Regulation. The SSM Mediation Regulation deals with issues such as the establishment, composition and voting procedures of the panel, and refers to the mediation process, the handling of requests for mediation, and the panel's decision making processes.

The SSM Mediation Regulation is available at:

ECB Supervisory Board's Supplemented Rules of Procedure

On 21 June 2014, the rules of procedure of the supervisory board of the ECB were published in the Official Journal of the European Union. The Rules, which supplement the Rules of Procedure of the ECB, provide for procedures to be taken in the ECB's role in the prudential supervision of Eurozone banks.

The Rules are available at:

ECB Administrative Board of Review Formally Established

On 14 June 2014, a Decision of the ECB on the establishment of an administrative board of review and its operating rules was published in the Official Journal of the European Union. The administrative board of review will review decisions taken by the ECB under the Single Supervisory Mechanism on the prudential supervision of Eurozone banks. Such reviews will be undertaken on request by a bank affected by any such decision.

The Decision is available at:

PRA Revises its Approach to Banking Supervision

On 19 June 2014, the Prudential Regulation Authority ("PRA") published a revised version of its Approach to Banking Supervision. The PRA published the first version in April 2013 when it began to prudentially regulate banks and certain investment firms. The revised version incorporates new rules, objectives and approach of the PRA, including its Fundamental Rules (which replace the Principles of Business), the resolvability regime, powers to address failings in culture and amendments to the liquidity assets requirements.

The document is available at: pr1406.pdf.

Basel Committee Consults on Update to Guidelines for Dealing with Weak Banks

On 18 June 2014, the Basel Committee on Banking Supervision (the "Basel Committee") published for consultation a proposed update to its 2002 Supervisory guidelines for identifying and dealing with weak banks. The aim of the proposed guidelines is to provide practical guidance to bank supervisors on how to identify and deal with a weak bank. The proposed update to the guidelines takes into account the occurrences, and consequences, of the financial crisis. Responses to the consultation paper are due by 19 September 2014.

The consultation paper is available at:


FCA and PRA on Addressing Failings of Standards, Governance and Culture at Firms

On 19 June 2014, the Financial Conduct Authority ("FCA") and the PRA published their responses to the recommendation of the Parliamentary Commission on Banking Standards ("PCBS") that regulators be given additional powers to address failings of standards at senior levels of firms. The papers set out how the FCA and PRA may use their powers to address failings in standards, governance and culture, including how each regulator can meet the PCBS's recommendations within their supervisory model, describes how regular supervision is used to address standards, sets out how the FCA's new 'Enhanced Supervision' approach is employed when serious failings are identified, describes the PRA's powers to appoint an independent to report on a firm's activities giving rise to concerns, including in relation to failings in culture (the "skilled persons reports") and describes how the FCA and the PRA work together. The PRA published a separate supervisory statement on reports by skilled persons on 19 June 2014.

The FCA's paper is available at: and the PRA paper is available at: culture.pdf. The PRA's supervisory statement on reports of skilled persons is available at:

PRA Statement on Financial Stability Information Power

On 19 June 2014, the PRA published a Statement of Policy on its power to require certain persons and firms to provide information or documents that the PRA considers are or may be relevant to the stability of the UK financial system (known as the 'financial stability information power'). The scope of the power is wide and can be applied to both authorized and unauthorized firms. The Statement covers the circumstances when the PRA will provide prior notice and when it will not, the right to make representations and requirements on form and authentication.

The Statement is available at: ower.pdf.

PRA Introduces Fundamental Rules

On 19 June 2014, the PRA published a Policy Statement, including final rules and feedback, relating to the introduction of the PRA Fundamental Rules (which replace the Principles of Business in the PRA Handbook), information gathering, auditors, the financial stability power (see above) and skilled persons reports (see above). The final rules came into effect on 19 June 2014.

The Policy Statement is available at:


CFPB Orders GE Capital to Pay $225 Million in Consumer Relief for Deceptive and Discriminatory Credit Card Practices

On 19 June 2014, the Consumer Financial Protection Bureau ("CFPB") ordered GE Capital Retail Bank ("GE Capital") to provide an estimated $225 million in relief to consumers harmed by illegal and discriminatory credit card practices. GE Capital must refund $56 million to approximately 638,000 consumers who were subjected to deceptive marketing practices. As part of the joint enforcement action by the CFPB and the US Department of Justice, GE Capital must also provide an additional $169 million to about 108,000 borrowers excluded from debt relief offers because of their national origin.

The full text of the CFPB's Consent Order is available at:

FSB Warns Firms about Conducting Business in Venezuela

On 19 June 2014, the Financial Stability Board ("FSB") published an advisory notice to financial institutions advising that the FSB has determined that Venezuela is a non-cooperative jurisdiction for regulatory and supervisory standards on international cooperation and information exchange. Financial institutions are warned to exercise the appropriate caution when conducting business in Venezuela or with financial institutions supervised by the Venezuelan regulators.

The FSB notice is available at:


CFTC Announces New Principal Deputy Director and Chief Counsel of the CFTC Division of Enforcement

On 23 June 2014, the US Commodity Futures Trading Commission ("CFTC") announced the appointment of Gretchen Lowe as Principal Deputy Director and Chief Counsel in the CFTC's Division of Enforcement.

The full text of the CFTC press release is available at:

SEC Names New Associate Director in the SEC Division of Corporation Finance

On 18 June 2014, the Securities and Exchange Commission ("SEC") announced that Cicely LaMothe has been named as an associate director in the SEC's Division of Corporation Finance.

The full text of the SEC press release is available at:


25 June 2014: US Senate Committee on Banking, Housing & Urban Affairs hearing entitled: "EXECUTIVE SESSION to Vote on Nominations, and The Financial Stability Oversight Council Annual Report to Congress."

26 June 2014: US House Committee on Financial Services hearing entitled: "Oversight of the SEC's Division of Trading and Markets."

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.

Barnabas W.B. Reynolds
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
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 you may opt out by clicking here

    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.

    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions