The following posts provide a snapshot of selected UK, EU and global wholesale financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates. 

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• UK Regulator Consults on Proposed Reforms to the Commodity Derivatives Regulatory Framework
  12/08/2023
  
  The U.K. Financial Conduct Authority has launched a consultation on proposals for reforming the commodity derivatives regulatory framework, which covers position limits, the exemptions from those limits, position management controls, the reporting regime and the ancillary activities test. Responses to the consultation may be submitted until February 16, 2024.
  
  The Financial Services and Markets Act 2023 has already made several reforms to the U.K.'s commodity derivatives regulatory regime. The MiFID II requirement for commodities position limits to be applied to all exchange-traded contracts and over-the-counter, or non-venue traded ("OTC"), contracts that are economically equivalent to exchange-traded commodity derivatives was revoked. Instead, the FCA will decide the scope of the commodity derivates to which position limits will apply. In addition, the powers for setting position controls were transferred from the FCA to the operators of trading venues. This contrasts with the EU approach, where position limits are not just set by the regulators, but actually in formulae in legislation, which have proven ill-thought-through and problematic for numerous markets. The FCA has retained the power to set position limits if certain conditions are satisfied, and has new rulemaking powers to establish how trading venues should set and apply position limits and what position management controls they should operate. Generally, the reversion of position limit controls to exchanges as self-regulatory organisations reflects the U.K.'s status quo ante, i.e., prior to MiFID II.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Derivatives, MiFID II
• UK Future of Payments Review Report Published
  11/29/2023
  
  HM Treasury has published the Future of Payments Review report, setting out the Review's recommendations for HM Treasury, the regulators and industry that aim to improve the U.K.'s existing payments landscape for consumers. The report follows the July 2023 call for evidence. The main recommendation is for the government to develop a National Payments Vision and Strategy, which will provide high-level guidance on priorities and define guiding principles on safety, simplification, coordination, responsiveness, inclusivity and accountability.
  
  The Review makes several other recommendations.
  
  Read more. 
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Consumer Protection, FinTech, Payment Services
• UK Draft Short Selling Regulations Published
  11/29/2023
  
  The U.K. government has published a draft version of the Short Selling Regulations 2024. The draft SSR 2024 will replace the existing U.K. Short Selling Regulation, which was onshored from the EU and which is being repealed under the Financial Services and Markets Act 2023. Alongside the draft legislation, HM Treasury has published a Policy Note, which sets out the final policy following the consultations on the short selling regime and on the regulation of sovereign debt and credit default swaps. The response to the first consultation was published in July this year, and the response to the second consultation was published in November 2023.
  
  The draft SSR 2024 provides that the following are designated activities under the Financial Services and Markets Act 2000 (and so fall under the Financial Conduct Authority's remit whenever any regulated or unregulated person carries them out):

  1. Entering into a short sale of a share.
  2. Entering into a transaction which creates or relates to a financial instrument other than a share, where an effect of the transaction is to confer a financial advantage on the person entering into that transaction in the event of a decrease in the price or value of a share.

  In line with the government’s policy of placing the more detailed firm-facing requirements in the regulator’s rulebooks, the draft SSR 2024 grants the FCA power to make designated activity rules relating to the above designated activities.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPIC : Securities
• UK Acts to Extend Transitional Period for Third-Country Benchmarks
  11/29/2023
  
  HM Treasury has published a policy paper and draft legislation for extending the transitional period for third-country benchmarks under the U.K. Benchmarks Regulation. The transitional period will be extended from the end of 2025 to the end of 2030.
  
  The U.K. Benchmarks Regulation provides that no financial instruments and financial contracts in the U.K. may start to reference a benchmark provided by a third-country benchmark administrator unless that benchmark administrator has approval through equivalence, recognition or endorsement. However, the applicability of these provisions to third-country benchmark providers has been extended numerous times. The government will consider whether the third-country benchmarks regime should be revised as part of the Smarter Regulatory Framework. The extension to 2030 is intended to provide certainty to market participants while that assessment and related work is carried out. The draft legislation is intended to come into force on January 1, 2024.
  
  In October this year, the EU extended to the end of 2025 the transitional period for third-country benchmarks under the EU Benchmarks Regulation.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Financial Market Infrastructure, Securities
• HM Treasury Seeks Views on Clearing Exemption for Pension Schemes
  11/29/2023
  
  U.K. EMIR (the onshored European Market Infrastructure Regulation) generally requires the clearing at a central counterparty of all interest rate swaps and credit default swaps. As announced earlier this year, HM Treasury has launched a review of an applicable exemption for pension funds, with the publication of a call for evidence. Currently, pension schemes meeting certain requirements are exempt from the clearing obligation for a temporary period. The exemption was included in EMIR due to the difficulty that pension funds would find in funding margin calls; nominally, to provide CCPs with time to develop solutions for the transfer of non-cash collateral by pension schemes to meet variation margin calls. CCPs require highly liquid collateral, mostly cash, as variation margin, but pension schemes are not set up to hold large amounts of cash and would have to amend their business model at high costs to do so. In June, the Pension Fund Clearing Obligation Exemption and Intragroup Transaction Transitional Clearing and Risk-Management Obligation Exemptions (Extension and Amendment) Regulations 2023 extended the temporary exemption for pension schemes to June 18, 2025.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Derivatives, Financial Market Infrastructure
• Bank of England Proposes Regulatory Regime for Systemic Payment Systems Using Stablecoins
  11/27/2023
  
  The Bank of England has published a discussion paper on its proposed approach to developing a regulatory regime for systemic payment systems using stablecoins and related service providers. The BoE’s paper follows the government’s recent Policy Paper on Plans for the Regulation of Fiat-backed Stablecoins which confirmed that these types of stablecoins will be brought into the U.K. regulatory perimeter.
  
  This is part of HM Treasury’s plan to regulate cryptoassets, focusing first on fiat-backed stablecoins. The BoE will be responsible for the financial stability of systemic payment systems using stablecoins. The Financial Conduct Authority will supervise non-systemic fiat backed stablecoins for prudential and conduct of business purposes, and systemic fiat-backed stablecoins for conduct purposes only, and has published a discussion paper alongside the BoE's discussion paper. Responses to both discussion papers may be submitted until February 6, 2024. The Prudential Regulation Authority will supervise banks' activities in tokenized deposits. The PRA has written to banks stating that any business in fiat-backed stablecoins will, among other things, need to be conducted from a separate legal entity under branding that is different to the bank' branding. The Payment Systems Regulator will supervise the competition aspects relating to systemic payment systems using fiat backed stablecoins.
  
  Read more. 
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Financial Market Infrastructure, FinTech, Payment Services
• UK Prudential Regulator Sets Out Expectations for Banks Innovating in Digital Money
  11/27/2023
  
  The U.K. Prudential Regulation Authority has published a Dear CEO letter, addressed to CEOs of banks, setting out its expectations of banks (deposit-takers) regarding the risks that arise from innovations in digital money and money-like instruments available to retail customers. The letter focuses on innovations in the use of deposits (and tokenized deposits), e-money and regulated stablecoins used for payment (which are being brought into the regulatory perimeter).
  
  The PRA sets out how banks are expected to limit contagion arising from confusion regarding the different protections available to retail holders of bank deposits, e-money and regulated stablecoins. Where a bank or its group want to issue e-money or regulated stablecoins, that activity should be carried out from an insolvency-remote entity that is separate to the bank, with different branding from the bank to ensure that any failure of the e-money or stablecoin issuer would not impact the bank and the continuity of its deposit-taking services. The PRA also expects any tokenized deposit-taking to be undertaken in a way that ensures protection under the Financial Services Compensation Scheme. An e-money or stablecoin issuer that decides to accept traditional deposits would first need to establish a separate entity to obtain permission to operate as a bank.
  
  Read more. 
  ATTORNEYS: Sandy Collins, Thomas Donegan
  TOPICS : Bank Prudential Regulation & Regulatory Capital, FinTech, Payment Services
• UK Conduct Authority Consults on Regulating Fiat-Backed Stablecoins
  11/27/2023
  
  The U.K. Financial Conduct Authority has published a discussion paper regarding potential future proposals for regulating fiat-backed stablecoins, including when used as a means of payment. The FCA's paper follows the government's recent Policy Paper on Plans for the Regulation of Fiat-backed Stablecoins, which confirmed that changes to legislation would bring these types of stablecoins into the U.K. regulatory perimeter. This is part of HM Treasury's plan to regulate cryptoassets, focusing first on fiat-backed stablecoins.
  
  The FCA will supervise non-systemic fiat-backed stablecoins for prudential and conduct of business purposes, and systemic fiat-backed stablecoins for conduct purposes only. The Bank of England is responsible for the financial stability of systemic payment systems using fiat-backed stablecoins and has published a discussion paper alongside the FCA's discussion paper. Responses to both discussion papers may be submitted until February 6, 2024. The Prudential Regulation Authority will supervise banks' activities in tokenized deposits. The PRA has written to banks stating that any business in fiat-backed stablecoins will, among other things, need to be conducted from a separate legal entity under branding that is different to the banks' branding. The Payment Systems Regulator will supervise the competition aspects relating to systemic payment systems that use fiat-backed stablecoins.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : FinTech, Payment Services
• HM Treasury Publishes Consultation Response on Financial Promotions Regime High Net Worth and Sophisticated Investors Exemptions
  11/08/2023
  
  HM Treasury has published a consultation response and draft statutory instrument on reforms to the high net worth and sophisticated investor exemptions under the financial promotions regime. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for UK Financial Services") made amendments to the Financial Promotion Restriction, banning authorized firms from approving the financial promotions of unauthorized firms unless they have received approval from the FCA to have the prohibition removed in whole or in part. The gateway will apply from February 7, 2024. However, the restriction does not apply where exemptions exist, such as those for high net worth or sophisticated investors.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Chloe Barrowman
  TOPICS : Consumer Protection, Financial Services
• HM Treasury Publishes Response to Cryptoasset Regulatory Regime Consultation
  11/03/2023
  
  HM Treasury has published a response to its consultation on cryptoasset regulation, setting out its final proposals for the U.K.'s cryptoasset regulatory regime. The U.K. plans to make cryptoassets a new category of "specified investment" under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and regulate certain activities conducted in relation to them. Under the new regime:

  • Firms conducting relevant activities and offering their services in or to the U.K. by way of business would need to apply for authorization by the U.K. Financial Conduct Authority. The relevant activities are: issuing or admitting cryptoassets to trading; operating cryptoasset trading venues; dealing as principal or arranging deals in cryptoassets; operating a cryptoasset lending platform; and safeguarding or safeguarding and administering cryptoassets (or arranging the same). Overseas firms offering their services into the U.K. may need to obtain FCA permission (although HM Treasury envisages equivalence/deference-type arrangements in the future and is considering alternative approaches to full authorization in the interim).
  • Firms that are already authorized to conduct other activities will need to apply for a Variation of Permission if they wish to conduct regulated cryptoasset activities.
  • Authorization under the new regime will not be automatically granted to cryptoasset firms registered with the U.K. Financial Conduct Authority for money laundering purposes, although the FCA will consider applicants' regulatory history when determining authorization applications.

  
  Read more.
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Consumer Protection, Financial Market Infrastructure, FinTech, MiFID II, Payment Services
• HM Treasury Publishes Plan for Regulation of Fiat-backed Stablecoins
  11/03/2023
  
  HM Treasury has published a Policy Paper on Plans for the Regulation of Fiat-backed Stablecoins, setting out the next steps for the implementation of stablecoin regulation in the U.K. Fiat-backed stablecoins are (under HM Treasury's proposed definition) those which seek or purport to maintain a stable value by reference to a fiat currency, and hold that currency, in whole or in part, as backing.
  
  The Financial Services and Markets Act 2023 (discussed in our client note, A Boost for UK Financial Services) empowers HM Treasury to bring certain activities related to the use of "digital settlement assets" (which may include fiat-backed stablecoins), within the regulatory perimeter and to establish a regime for the supervision of stablecoin issuers. DSAs are defined broadly under the FSM Act as digital assets that can be used for payment, can be transferred, stored or traded electronically and use technology (e.g., distributed ledger technology) to record or store data. HM Treasury plans to bring certain activities related to fiat-backed stablecoins within the scope of regulation ahead of other types of cryptoasset, due to their potential to become a widespread means of retail payment.
  
  Read more.
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Consumer Protection, Financial Market Infrastructure, FinTech, Payment Services
• HM Treasury Publishes Response to Consultation on Managing Failure of Systemic Digital Settlement Asset Firms
  11/03/2023
  
  HM Treasury has published a response to its consultation on managing the failure of systemic digital settlement asset firms. DSAs are defined broadly under the Financial Services and Markets Act 2023 as digital assets that can be used for payment, can be transferred, stored or traded electronically and use technology (e.g., distributed ledger technology) to record or store data. The FSM Act (discussed in our client note, A Boost for UK Financial Services) granted HM Treasury powers to supervise certain activities related to DSAs. This included the power to apply the Financial Market Infrastructure Special Administration Regime to systemic DSA firms (other than banks, which are covered by existing regulatory frameworks).
  
  Read more.
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Financial Market Infrastructure, FinTech, Recovery & Resolution
• EU Proposes Reducing Scope of the EU Benchmark Regulation
  11/01/2023
  
  The European Commission has published a legislative proposal for reducing the scope of the EU Benchmark Regulation. The EU BMR provides the authorization and registration requirements for benchmark administrators, including third-country entities, and the requirements for governance and control of administrators. It provides for different categories of benchmarks depending on the risks involved, imposes additional requirements on benchmarks considered to be "critical" and gives powers to national regulators to mandate, under certain conditions, contributions to or the administration of critical benchmarks.
  
  The Commission's proposal, designed to ease the burdensome requirements for smaller benchmark administrators, is to change the scope of the BMR by removing the requirement for non-significant benchmark administrators to obtain authorization or registration (EU administrators) or endorsement or recognition (third-country administrators). This will mean that the requirements for governance and control of administrators would no longer apply to these benchmark administrators.
  
  The approval and governance requirements would continue to apply to significant benchmark administrators, critical benchmark administrators and, irrespective of significance, to administrators of the EU Paris-aligned Benchmark or EU Climate Transition Benchmarks.
  
  Read more.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Financial Market Infrastructure, Securities
• UK Regulators Confirm Bonus Cap Being Scrapped
  11/01/2023
  
  The U.K. Prudential Regulation Authority and Financial Conduct Authority have published a joint policy statement confirming the "bonus cap" will be removed. Banks are subject to compensation requirements for staff who have a material impact on the bank's risk profile, and there is a cap on the ratio of variable to fixed compensation for identified staff – known as the bonus cap.
  
  The changes are relevant to banks, building societies, and PRA-designated investment firms, including third-country branches that are subject to the Remuneration Part of the PRA Rulebook and to the FCA Remuneration Code for dual-regulated firms. The amendments will take effect from October 31, 2023, applying to a firm's performance year which is ongoing on that date, and to future performance years. Firms have flexibility as to when to make changes to compensation structures.
  
  In their policy statement, the regulators remind firms of the existing rules that will continue to apply to a firm's compensation structure to ensure prudent risk-taking, such as the requirements that all variable compensation must be subject to risk adjustment and that the fixed and variable components of total remuneration must be appropriately balanced. The regulators have added guidance on how firms can set an appropriate ratio between the fixed and variable components.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Compensation, Corporate Governance
• EU Extends Use of Third-Country Benchmarks Until End 2025
  11/01/2023
  
  A Commission Delegated Regulation extending the transitional period laid down for third-country benchmarks has been published in the Official Journal of the European Union.
  
  The EU Benchmark Regulation limits the use by EU supervised entities of benchmarks provided by third-country benchmark administrators. Under transitional provisions, no financial instruments and financial contracts in the EU may start to reference a benchmark provided by a third-country administrator on or after December 31, 2023 (extended in 2022 from January 1, 2021), unless the benchmark and administrator are included in the register maintained by the European Securities and Markets Authority following an equivalence decision by the European Commission, or recognition or endorsement by a national regulator. However, a benchmark provided by a third-country administrator that is already being referenced in financial instruments and financial contracts in the EU on January 1, 2024, may continue to be referenced in those contracts and financial instruments.
  
  The Delegated Regulation, which takes effect on October 26, 2023, extends the transitional date from December 31, 2023 to December 31, 2025. The transitional provision does not apply to any EU benchmark whose administrators relocate to a third country during the transitional period.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Financial Market Infrastructure, Securities
• Basel Committee Report on 2023 Banking Turmoil
  10/20/2023
  
  The Basel Committee on Banking Supervision published a press release in early October in which it announced:

  • That it would consult on disclosure frameworks for climate-related financial risks (in November 2023) and banks' cryptoasset exposures (soon).
  • The publication of its report on the banking turmoil of 2023, which assesses the causes of the turmoil, the regulatory and supervisory responses, and the initial lessons learnt. The Basel Committee states that it will be undertaking some follow-up work, including prioritizing work to bolster supervisory effectiveness globally and assessing whether any aspects of the Basel Framework did not function as intended during the turmoil.
  • That by mid-2024 it would publish a report on developments in the digitalisation of finance and their implications for banks and supervisors.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Bank Prudential Regulation & Regulatory Capital, FinTech, Payment Services, Sustainable Finance
• UK Government Publishes Draft Regulations on CCP Recovery & Resolution
  10/20/2023
  
  The draft Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023 were laid in Parliament on October 16, 2023. The draft Regulations provide for corporate law modifications and other amendments to ensure that the U.K. CCP resolution regime functions effectively. The Financial Services and Markets Act 2023 (discussed in our client note, "A Boost for U.K. Financial Services") expanded the CCP resolution regime, giving the Bank of England, as resolution authority, additional powers to safely resolve a failing CCP. Most of the provisions of the expanded regime entered into force on August 29, 2023, under the first commencement regulations made under the FSM Act. Using powers conferred by the FSM Act, HM Treasury, through the draft Regulations, aims to ensure legal certainty and coherence by amending provisions of existing legislation, such as the Companies Act 2006 and the Bank Recovery and Resolution (No.2) Order 2014. The draft Regulations are intended to enter into force on December 31, 2023.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Financial Market Infrastructure, Recovery & Resolution
• Draft Legislation Published for Implementing UK's Retained EU Law (Revocation and Reform) Act 2023
  10/20/2023
  
  The draft Retained EU Law (Revocation and Reform) Act 2023 (Consequential Amendment) Regulations 2023, laid before Parliament on October 16, 2023, will implement certain aspects of the Retained EU Law (Revocation and Reform) Act 2023 (which we discuss in our client note, "UK Government Publishes Brexit Freedoms Bill Setting Deadline for Revocation of EU Law"). The aim of the draft Regulations is to provide enhanced legal certainty in U.K. statutes.
  
  The draft Regulations make provision for amending U.K. primary legislation (listed in the schedule to the draft Regulations) by replacing references to "retained EU law" with the term "assimilated law." This implements section 5 of the REUL Act, which provides that in-force REUL will become "assimilated law" or "assimilated case law" from January 1, 2024.
  
  Read more.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPIC : Brexit for Financial Services
• UK Jurisdiction Taskforce Publishes Consultation on Digital Assets and Insolvency Law
  10/20/2023
  
  The U.K. Jurisdiction Taskforce has published a consultation relating to its proposed Legal Statement offering guidance on the application of English insolvency law principles to digital assets. The proposed Legal Statement will cover a range of areas which are listed in an Annex to the paper. Respondents are invited to submit comments on these areas, which include: (i) whether digital assets would constitute "property" under English insolvency legislation; (ii) which jurisdictional rules apply to determine the location of digital assets; and (iii) whether any difficulties can be perceived in applying English insolvency legislation to the avoidance of prior transactions to pre-insolvency dealings with digital assets. In addition, respondents are encouraged to inform the UKJT of any material issues of concern to stakeholders in relation to the application of English insolvency law to digital assets, other than those listed in the paper's Annex. Responses should be submitted by December 4, 2023.
  
  The consultation paper follows a series of other publications by the UKJT on legal issues surrounding digital assets, including its Statement on the Issuance and Transfer of Digital Securities under English Law, published in February 2023.
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPIC : FinTech
• EU Authority Seeks Feedback on Potential Shorter EU Settlement Cycle
  10/16/2023
  
  The European Securities and Markets Authority has opened a call for evidence on shortening the settlement cycle in the EU. The existing EU settlement cycle for trades in transferable securities executed on trading venues is by no later than the second business day after the trade takes place, known as T+2. Responses to the call for evidence may be submitted by December 15, 2023. ESMA will report to the European Commission during 2024, although an earlier report may be produced if ESMA considers that regulatory action is needed in response to the move to T+1 or T+0 in other jurisdictions.
  
  ESMA is asking for feedback from financial market participants on the impact on their operations of a reduced securities settlement cycle to T+1 or T+0, what benefits and costs it would bring, and how and when a shorter settlement cycle could be achieved. ESMA considers that the EU landscape is more complex than that in other jurisdictions because there is no centralized EU post-trade financial markets infrastructure and no harmonized securities law. Finally, ESMA seeks input on the impact of developments in other jurisdictions, such as the intended move by the U.S. and Canada to T+1 in mid-2024 and the U.K.'s assessment of changing to T+1 or T+0, an initial report on which is expected by the end of this year (announced as part of the Edinburgh Reforms which are discussed in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services").
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Financial Market Infrastructure, FinTech, Securities
• Draft UK Legislation on Revised Payment Service Contract Termination Rules Expected Before 2024
  10/13/2023
  
  HM Treasury has published a further policy statement on payment service contract termination rule changes, setting out its approach to implementation, timing and next steps. This latest policy statement follows the government's July policy statement in which it confirmed that it would bring forward legislation to enhance the requirements governing payment account terminations. This issue has become topical in light of the "de-banking" of higher risk or less profitable clients by several institutions and recent scandals in the U.K. involving account terminations of some politicians. The main changes being brought forward are:

  • A requirement for payment account providers to provide clear and tailored explanatory reasons to an account user for the termination. The requirement would not apply where it would be unlawful to provide such information, for example, under U.K. financial crime and anti-money laundering legislation.
  • A 90-day notice period before a payment account is terminated by a provider, subject to situations where there is a serious and uncorrected breach by the payment user of the terms applying to the account. It would also be clarified that reasons such as brand protection would not be sufficient justification for a shorter notice period.

  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : AML/CTF, Insider Trading and Sanctions, Consumer Protection, Payment Services
• Consultation on Near-Term UK Ring-Fencing Regime Reforms
  10/10/2023
  
  HM Treasury has launched a consultation on proposed near term reforms to the U.K. ring-fencing regime—"A Smarter Ring-Fencing Regime"—and published its response to its call for evidence on the practicalities of aligning the ring-fencing and resolution regimes for banks. These potential changes to the four-year-old ring-fencing regime were announced in the government's Edinburgh Reforms, which we discuss in our client note: "UK Government Publishes Edinburgh Reforms for Financial Services."
  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Bank Structural Reform, Recovery & Resolution
• UK Regulator Consults on Rules for Ring-Fenced Banks to Establish Overseas Entities
  10/10/2023
  
  The U.K. Prudential Regulation Authority is consulting on a proposed rule and policy changes relating to the establishment and maintenance of third-country branches and subsidiaries within ring-fenced banking groups. The PRA's consultation comes out of HM Treasury's Smarter Ring-Fencing Regime consultation, in which it is proposing, among other things, to remove the ban on RFBs that prevents them from operating in or servicing customers outside the U.K. and European Economic Area. Responses to the PRA's consultation may be submitted until November 27, 2023.
  
  The PRA is proposing to require an RFB to ensure that risks from its overseas subsidiary or branch are not material to its safety and soundness, including its ability to continue to provide core services in the U.K. and its resolvability. It also proposes to update its existing Supervisory Statement on RFBs to set out its proposed approach to assessing compliance with the new rule and determining whether there is a material risk to a RFB's stability.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Bank Structural Reform, Recovery & Resolution
• UK Extends Temporary Recognition Regime for Third Country Central Counterparties and Transitional Regime for Qualifying Central Counterparties
  09/21/2023
  
  The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2023 were made on September 13, 2023 and will enter into force on November 1, 2023, extending the U.K.'s temporary recognition regime for third-country CCPs to December 31, 2025. The TRR allows third-country CCPs to continue offering clearing services in the U.K., pending full recognition or equivalence decisions being granted. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services") granted the Bank of England new rulemaking powers over CCPs and provides for the future framework for market access for overseas CCPs. The extended TRR will enable the current regime for overseas CCPs to continue while the U.K.'s new regime is developed, and ensures that certain overseas CCPs for whom recognition decisions have not yet been granted can continue to offer services in the U.K.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Chloe Barrowman
  TOPIC : Financial Market Infrastructure
• UK Financial Conduct Authority Publishes Policy Statement on Financial Promotions Gateway
  09/20/2023
  
  The U.K. Financial Conduct Authority published a Policy Statement on 12 September 2023 setting out how it intends to implement the new regulatory gateway for financial promotions. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services") amends the Financial Promotion Restriction, banning authorized firms from approving financial promotions of unauthorized firms unless they have received approval from the FCA to have the prohibition removed in whole or part. The gateway will apply from February 7, 2024, with authorized firms able to apply to the FCA for permission from November 6, 2023 until February 6, 2024. There are exemptions from the gateway, entering into force on September 27, 2023, which permit the approval of financial promotions by authorized firms, for communication by unauthorized firms, in certain circumstances.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Chloe Barrowman
  TOPICS : Consumer Protection, Financial Services, FinTech
• UK Joint Money Laundering Steering Group Publishes Guidance on Travel Rule for Cryptoasset Exchange Providers and Custodian Wallet Providers
  09/14/2023
  
  The Joint Money Laundering Steering Group has published revisions to its Sector 22 Guidance on Cryptoasset exchange providers and custodian wallet providers along with a new Annex I, setting out guidance on the U.K. Travel Rule for cryptoassets. The Travel Rule was introduced under the Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022, amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and requires certain identification information on the sender and recipient to accompany a transfer of a cryptoasset. The Travel Rule requirements have applied since September 1, 2023.
  
  Read more.
  ATTORNEYS: Thomas Donegan, Chloe Barrowman
  TOPICS : AML/CTF, Insider Trading and Sanctions, Financial Market Infrastructure, FinTech
• FCA Reviews Treatment of Politically Exposed Persons
  09/14/2023
  
  The U.K. Financial Conduct Authority has launched a review of the treatment by regulated financial services firms of Politically Exposed Persons based in the U.K. Firms are currently obliged, under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, to conduct enhanced due diligence when dealing with PEPs. The FCA has existing Guidance on the treatment of PEPs for these purposes, which makes clear (amongst other things) that firms should adopt a proportionate and risk-based approach to the application of the MLRs. The FCA has been mandated to review this guidance under the Financial Services and Markets Act 2023, including an investigation into how firms are applying the guidance and consideration as to whether any amendments are needed. We discuss this mandate and the FSMA 2023 more generally in our client note, A Boost for UK Financial Services: The UK Financial Services and Markets Act 2023. 
  
  Read more.
  ATTORNEYS: Thomas Donegan, Chloe Barrowman
  TOPICS : AML/CTF, Insider Trading and Sanctions, Conduct & Culture, Consumer Protection
• Revocation of the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 is Postponed
  09/14/2023
  
  The Financial Services and Markets Act 2023 (Commencement No. 3) (Amendment) Regulations 2023 were made on August 25, 2023, postponing the revocation of the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013.
  
  The Commencement No. 3 Regulations amend the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023, which were made on July 10, 2023 and provide for the entry into force of certain provisions of the Financial Services and Markets Act 2023 (which we discuss in our client note, A Boost for UK Financial Services: The UK Financial Services and Markets Act 2023). This included provisions revoking retained EU legislation relating to financial services, including the CITS Regulations. The CITS Regulations establish a fund vehicle for the U.K. investment management industry which makes U.K. domiciled funds for collective investment in transferable securities more competitive. The CITS Regulations will now be revoked on a day appointed by the Treasury in a later instrument.
  ATTORNEYS: Thomas Donegan, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Financial Services, Funds
• Proposed Global Policy Recommendations for Decentralized Finance
  09/13/2023
  
  On September 7, 2023, the International Organisation of Securities Commissions launched a consultation on proposed policy recommendations on market integrity and investor protection issues in decentralized finance (DeFi). IOSCO is proposing that the final recommendations, which it aims to finalize before the end of 2023, will help IOSCO members to establish compliant markets. Responses to the consultation may be submitted until October 19, 2023.
  
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  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Consumer Protection, FinTech
• UK Conduct Regulator Offers Small Reprieve for Cryptoasset Marketing
  09/13/2023
  
  The U.K. Financial Conduct Authority announced on September 7, 2023, that firms may avail themselves of a delay to the application of some rules applying to cryptoasset financial promotions. The FCA published rules for cryptoasset financial promotions in June this year, which will apply from October 8, 2023 (the same date that the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 brings the promotion of cryptoassets within scope of the U.K. regulatory regime). The reprieve is available, on application, to:

  • firms registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 that intend to communicate cryptoasset financial promotions; and
  • authorized firms that intend to communicate or approve cryptoasset financial promotions.

  
  Read more.
  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Consumer Protection, FinTech
• Exemptions from UK Financial Promotions Gateway Published
  09/11/2023
  
  The Financial Services and Markets Act 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023, which come into force on September 27, 2023, set out the exemptions to the new U.K. regulatory gateway for the approval by authorized firms of financial promotions of unauthorized firms. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023") amends the Financial Promotion Restriction, banning authorized firms from approving financial promotions of unauthorized firms unless they have received approval from the Financial Conduct Authority to have the prohibition removed in whole or part. The prohibition will apply from February 7, 2024, according to the Financial Services and Markets Act 2023 (Commencement No. 2 and Transitional Provisions) Regulations 2023, which also set out the following timeline for the new regime to come into effect:

  • September 6, 2023: provisions will apply that enable the FCA to give directions and guidance and to make rules.
  • November 6, 2023: provisions will apply that allow the FCA to receive (but not determine) applications to approve financial promotions that are made during the application period (November 6, 2023 to February 6, 2024).

  
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  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Consumer Protection, FinTech
• UK Regulatory Gateway for Financial Promotions Applies from February 2024
  08/29/2023
  
  The Financial Services and Markets Act 2023 (Commencement No. 2 and Transitional Provisions) Regulations 2023, made on August 22, 2023, bring into force certain provisions of the Financial Services and Markets Act 2023 and create a number of transitional regimes. We discuss the FSM Act in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023."
  
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  ATTORNEYS: Thomas Donegan, Sandy Collins
  TOPICS : Bank Prudential Regulation & Regulatory Capital, Financial Services
• UK Joint Money Laundering Steering Group Proposed Cryptoasset Travel Rule Guidance
  08/14/2023
  
  The U.K. Joint Money Laundering Steering Group opened a consultation on July 28, 2023 on guidance on the U.K. travel rule for cryptoasset transfers. The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022 introduced the cryptoasset travel rule by amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, and firms will need to comply with the requirements from September 1, 2023. The travel rule requires certain identification information on the sender (originator) and recipient (beneficiary) to accompany a transfer of a cryptoasset. The JMLSG is proposing to add a new annex setting out guidance on the U.K. travel rule for cryptoassets, covering scope, information requirements, batch transfers, returns, unhosted wallet transfers, wallet attribution, linked transactions and use of a layer-2 solution such as the Lightning Network. The guidance also states that firms should consider communications from the Financial Conduct Authority on the sunrise issue, which refers to the impact of jurisdictions implementing the travel rule at different times. Firms may encounter issues when dealing with counterparties in jurisdictions that have not implemented the travel rule for cryptoassets, for example, when dealing with EU counterparties for which the EU travel rules for cryptoasset transfers will only apply from December 30, 2024. Responses to the JMLSG consultation may be submitted until August 25, 2023.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : AML/CTF, Insider Trading and Sanctions, FinTech, Payment Services
• Financial Stability Board Issues Recommendations for Regulating Cryptoasset Activities and Markets
  08/14/2023
  
  The Financial Stability Board has finalized its global regulatory framework for cryptoasset activities and markets and revised the framework for global stablecoin arrangements. Both frameworks, based on the principle of "same activity, same risk, same regulation" aim to provide a basis for consistent regulation across the globe that is proportionate to the risks.
  
  Comprising nine high-level recommendations for the regulation, supervision and oversight of cryptoasset activities and markets, the cryptoasset framework sets out the key objectives for implementation of an effective regulatory and supervisory regime for mitigating the risks posed by cryptoassets. The recommendations are:
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : FinTech, Payment Services
• HM Treasury Publishes Response to Payments Regulation and Systemic Perimeter Consultation
  08/14/2023
  
  HM Treasury has published a response to its consultation on payments regulation and the systemic perimeter. The consultation was prompted by the U.K. government's Payments Landscape Review and HM Treasury's concern that some payments services operators were not subject to systemic supervision but may pose systemic risks to the U.K. financial system.
  
  Read more
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Financial Market Infrastructure, FinTech, Payment Services
• UK Financial Conduct Authority Consults on Securitization Rules
  08/14/2023
  
  The U.K. Financial Conduct Authority is consulting on its proposed rules for securitization markets, which will replace many of the firm-facing requirements under the existing U.K. Securitization Regulation. The U.K. Prudential Regulation Authority is separately consulting on its own equivalent rules for PRA-authorized firms, which together with the FCA's rules will create a coherent regime for securitizations. The regulators are being handed the power to make these rules under HM Treasury's proposed reforms to the U.K. securitization regime, which will repeal the existing U.K. Securitization Regulation, keeping part of the regime in new legislation and the remainder in the regulators' rulebooks.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Securities
• HM Treasury Consults on First Financial Market Infrastructure Sandbox – the Digital Securities Sandbox
  08/07/2023
  
  HM Treasury has published a consultation on the establishment of a financial market infrastructure sandbox, known as the Digital Securities Sandbox. The sandbox will be established using new powers granted by the U.K. Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for UK Financial Services"), empowering HM Treasury to set up individual FMI sandboxes. The sandboxes are designed to enhance understanding of the use cases for emerging digital asset technologies, including distributed ledger technology. HM Treasury can modify or disapply legislation and rules within the sandbox to permit different technologies to be tested that would not be possible under the existing legislative and regulatory framework, with the potential to make permanent changes to legislation based on the findings of the sandbox.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Financial Market Infrastructure, FinTech, Securities
• HM Treasury Publishes Response on UK Retail Disclosure Consultation
  08/07/2023
  
  HM Treasury has published a response to its consultation on the future of U.K. retail disclosures. HM Treasury's consultation (which we discussed in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services") identified various problems with the Packaged Retail and Insurance-Based Investment Products Regulation which currently governs disclosures for complex retail investment products. These included that the PRIIPs regime could be overly prescriptive and potentially misleading in its attempts to make PRIIPs products comparable and that the rules were spread across a mixture of legislation and regulatory rules which led to a complex environment for firms.
  
  Read more.
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Consumer Protection, Securities
• UK Regulators Publish Revised Complaints Scheme
  08/04/2023
  
  The U.K. Financial Conduct Authority, Prudential Regulation Authority and Bank of England have jointly published their revised Complaints Scheme, which governs how complaints against the U.K. regulators should be made and handled. The changes include:

  • The introduction of specific discretionary compensation bands for non-financial loss arising from the regulators' actions or inactions. The bands range from £100 for a relatively low level of stress or inconvenience, up to over £2,500 in exceptional circumstances, for example, where the consequences of the regulators' failings are particularly severe.

  Read more
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Conduct & Culture, Consumer Protection, Financial Services
• HM Treasury Consults on UK Future of Payments Review
  08/04/2023
  
  HM Treasury has published a Call for Input on the U.K. Future of Payments Review, an investigation into how future payments are likely to be made and how the U.K. can offer world-leading retail payments. The review is focused on consumer needs — specifically, those of individuals and businesses processing retail payments. Input is sought on the following issues:

  1. What are the most important consumer retail payment journeys, both today and in the next five years?
  2. How does the experience of these journeys by U.K. consumers (individuals and businesses) compare with those of other leading countries?
  3. How likely are the existing plans and initiatives across the payments landscape to deliver world-leading payment journeys for U.K. consumers?

  The Call for Input is open until September 1, 2023.
  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Consumer Protection, Payment Services
• UK Government Consults on Revised Securitization Regime
  08/04/2023
  
  HM Treasury has published a near-final draft statutory instrument and related Policy Note setting out its proposed reforms to the U.K. securitization regime. Comments on the draft S.I. can be submitted until August 21, 2023. The final S.I. will be laid before Parliament before the end of 2023.
  
  The PRA is separately consulting on proposed rules to replace its retained EU law securitization requirements for PRA-authorized firms. Responses to the PRA's consultation should be submitted by October 30, 2023. The FCA will publish a consultation on its securitization rules on August 7, 2023.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Securities
• UK Regulatory Guidance on Trading Venue Regulatory Perimeter
  08/04/2023
  
  The U.K. Financial Conduct Authority has issued final guidance to clarify the scope of the regulatory perimeter for trading venues and the regulatory approvals needed to conduct their business. The guidance caters for new platforms emerging from technological developments. The guidance is one of the outcomes of HM Treasury's Wholesale Markets Review (which we discuss in our client note, "UK Wholesale Markets Review"). Other aspects of the Review are being implemented through the Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023") or by amendments to FCA rules.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins, Elias Allahyari
  TOPICS : Financial Market Infrastructure, MiFID II
• UK Regulator Issues Statement on New Growth and International Competitiveness Objective
  08/03/2023
  
  The U.K. Financial Conduct Authority has published a statement setting out how its work to support the 'key drivers' of productivity will facilitate delivery of its new secondary objective and how it intends to report on progress embedding the new objective. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023") introduces a new secondary statutory objective, obliging the FCA and U.K. Prudential Regulation Authority in carrying out their functions to support the long-term growth and international competitiveness of the U.K.'s economy in the medium and long term. This obligation enters into force on August 29, 2023, under Commencement Regulations made on July 10, 2023. Each regulator must report at two intervals to HM Treasury setting out how it has complied with its duty to advance the new objective. The reports are due 12 and 24 months after the new objective applies (August 29, 2024 and August 29, 2025 respectively).
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Brexit for Financial Services, Financial Services
• UK Regulator Proposes Framework for a Consolidated Tape
  08/03/2023
  
  On July 5, 2023, the U.K. Financial Conduct Authority launched a consultation on a proposed U.K. consolidated tape for bonds. MiFID II introduced requirements for a "consolidated tape" for transactions in equity and non-equity instruments. It requires a consolidated tape provider to collect post-trade information published by trading venues and approved publication arrangements and to consolidate this into a continuous live data stream made available to the public. No consolidated tape has yet been set up in either the U.K. or the EU. The EU announced at the end of June 2023 that political agreement had been reached on the proposals to introduce an EU consolidated tape.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Brexit for Financial Services, MiFID II
• First Commencement Regulations Under UK Financial Services and Markets Act 2023
  08/03/2023
  
  The Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023 were made on July 10, 2023 and will bring into force provisions under the Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023") from either July 11, 2023, August 29, 2023 or January 1, 2024.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Brexit for Financial Services, Financial Services
• UK Investment Research Review Signifies Further EU-UK Divergence on Unbundling Research Rules
  08/02/2023
  
  The report and recommendations of the UK Investment Research Review were published on July 10, 2023. The recommendations have been accepted by the government and the Financial Conduct Authority has committed to prioritizing consulting on proposed rule changes with a view to revised rules applying in H1 2024.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Thomas Donegan, Sandy Collins
  TOPIC : MiFID II
• UK Government Sets Out Plan for Revoking EU Financial Services Laws
  08/02/2023
  
  Following finalization of the Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023"), HM Treasury published a Delivery Plan for the Building a Smarter Financial Services Regulatory Framework for the UK. The Delivery Plan compliments the Policy Paper published as part of the Edinburgh Reforms (discussed in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services").
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Brexit for Financial Services, Financial Services
• UK Prudential Regulation Authority Consults on Approach to Reviewing Rules
  08/02/2023
  
  The U.K. Prudential Regulation Authority opened a consultation on June 30, 2023, on its proposed approach to reviewing its rules, including a proposed statement of policy. The Financial Services and Markets Act 2023 transfers responsibility for making detailed rules to the U.K.'s regulators, significantly increasing their powers, and provides for an enhanced regulatory accountability framework, subjecting the regulators to additional oversight by Parliament and HM Treasury. One of those regulatory accountability measures requires the PRA and Financial Conduct Authority to keep their rules under review and to publish a statement of policy on how they conduct such reviews.
  
  The PRA's consultation sets out its proposed framework for conducting rule reviews, stakeholder engagements, transparency and communicating the outcomes of reviews. Responses to the consultation may be submitted until September 29, 2023.
  
  The FCA has also published a draft Rule Review Framework, for which feedback may be submitted until September 15, 2023.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Brexit for Financial Services, Financial Services
• UK Financial Conduct Authority Seeks Comment on Draft Rule Review Framework
  08/02/2023
  
  The U.K. Financial Conduct Authority launched a consultation on July 14, 2023, on its proposed Rule Review Framework. The Financial Services and Markets Act 2023 transfers responsibility for making detailed rules to the U.K.'s regulators, significantly increasing their powers. To ensure proper oversight of the use of those powers in practice, the FSM Act provides for an enhanced regulatory accountability framework, subjecting the regulators to additional oversight by Parliament and HM Treasury. Among other things, the FCA and Prudential Regulation Authority must keep their rules under review and publish a statement of policy on how they conduct such reviews.
  
  The FCA is proposing a draft Rule Review Framework based on the use of data to assess the effects of a rule change. The draft Framework sets out three types of review that the FCA could conduct, describing their purpose. The three types of review are an evidence assessment, a post-implementation review and an ex post impact evaluation. The FCA's draft Framework also describes the steps it could take if the data shows that a rule is not working as had been intended. Comments on the FCA's draft Rule Review Framework may be submitted until September 15, 2023.
  
  The PRA is also consulting on its proposed approach to reviewing its rules, including a proposed statement of policy. Responses to the PRA's consultation may be submitted until September 29, 2023.
  ATTORNEYS: Barnabas W.B. Reynolds, Sandy Collins
  TOPICS : Brexit for Financial Services, Financial Services
• UK Government Consults on Revised UK Short Selling Regime
  08/02/2023
  
  HM Treasury has published its response to the Short Selling Regulation Review, which sought views on the proposed U.K. short selling regime. Once the new U.K. regime for short selling is finalized, the retained EU Short Selling Regulation will be revoked under the revocation framework established by the U.K. Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023"). A draft statutory instrument for the new U.K. regime is expected to be published before the end of 2023, with the final S.I. being delivered during the course of 2024. The U.K. Financial Conduct Authority will also consult on proposed rules for the new framework in 2024.
   
  The proposed regime is intended to represent a "lighter-touch" approach that will facilitate short selling and its benefits while managing the associated risks. The changes will: (i) increase the net short position disclosure threshold from 0.1% to 0.2%; (ii) replace the current requirement to disclose all short positions over 0.5% with a new disclosures model, whereby the FCA will publish aggregated short positions in each company's shares (removing the need to reveal the identity of individual sellers); and (iii) empower the FCA to make rules on areas such as exempt share arrangements, the market maker exemption requirements and prohibitions on uncovered short selling.
  
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  ATTORNEYS: Barnabas W.B. Reynolds, Chloe Barrowman
  TOPICS : Brexit for Financial Services, Financial Services