Shearman & Sterling LLP | FinReg | Blog | Financial Services
Financial Regulatory Developments Focus
This links to the home page
FILTERS

The following posts provide a snapshot of the principal U.S., European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.

  • Working Group on Sterling Risk-Free Reference Rates Publishes Summary of Responses to Discussion Paper on SONIA Referencing Conventions
    08/07/2019

    The Working Group on Sterling Risk-Free Reference Rates has published a summary of the responses it received to its March 2019 discussion paper on conventions for referencing SONIA in new financial contracts.

    Read more.
  • UK Conduct Regulator Concludes No Changes Needed to Banking Senior Managers Regime
    08/05/2019

    The U.K. Financial Conduct Authority has published the findings of its review into the implementation of the Senior Managers and Certification Regime for the banking sector. The SM&CR came into force for banking firms in March 2016 with the aim of making individuals in the banking sector more accountable for their conduct. The FCA conducted the review to determine how the SM&CR has been implemented in the three years since its introduction. The review is intended to aid understanding of the impact of the regime and the FCA does not intend to make any policy changes on the basis of its findings. The FCA's review focuses on the implementation of the existing banking SM&CR, but an expanded SM&CR regime will come into force for all FCA solo-regulated firms from December 9, 2019. Firms falling within scope of the expanded regime should, where appropriate, also take the findings of the FCA's review into account in their implementation of the SM&CR.

    Read more.
  • UK Committee Recommends Enhancing the Financial Conduct Authority's Powers and Remit
    08/02/2019

    The U.K. Treasury Committee has published a report on the Financial Conduct Authority's perimeter of regulation. The Report is part of the Committee's ongoing inquiry, The Work of the Financial Conduct Authority, which is considering: (i) the timeliness in which the FCA is able to take action; (ii) the transparency of the FCA's work and decisions; and (iii) the scope of the FCA's regulatory perimeter. This Report considers the last of these issues and makes several recommendations to the Treasury on the remit and powers of the FCA to enhance understanding of consumers of the regulatory perimeter, reduce harm to consumers and mitigate against regulatory arbitrage.

    Read more.
  • European Commission Communicates on Financial Services Equivalence
    07/29/2019

    The European Commission has published a Communication on equivalence in the area of financial services, including an annex that briefly sets out the equivalence decisions adopted by the Commission since January 2018. The Communication describes the Commission's current equivalence policy priorities, recent legislative improvements and the main assessment and the decision-making processes. It also sets out recent and ongoing work on equivalence assessments and monitoring.

    Read more.
  • UK Conduct Regulator Publishes Final Senior Managers & Certification Regime Rules for Extended Regime
    07/26/2019

    The U.K. Financial Conduct Authority has published its final rules extending the Senior Managers and Certification Regime to all FCA solo-regulated firms. The final rules take into account responses to the FCA's consultation paper issued in January 2019, which proposed changes to optimize the expanded regime. 

    Read more.
  • European Central Bank Announces Publication Time for Euro Short-Term Rate
    07/26/2019

    The European Central Bank has announced the publication time for the new Euro short-term rate (or €STR) that will come into effect from October 2, 2019. €STR will represent the wholesale euro unsecured overnight borrowing costs of banks located in the euro area. The ECB has also published the final version of its Guideline in the Official Journal of the European Union. The Guideline is addressed to all Eurosystem central banks and will govern the rate and establish the responsibilities of the ECB and national central banks in determining and administering the rate.

    Read more.
  • HM Treasury Seeks Input on the Future of Regulatory Coordination in Financial Services
    07/19/2019

    Launching the first phase of the Future Regulatory Framework Review, HM Treasury has issued a call for evidence on regulatory coordination in the financial services sector. The Financial Services Future Regulatory Framework Review was announced in March 2019 by the Chancellor in his Spring Statement. The Review will assess whether the U.K. financial services regulatory framework is fit for purpose, including being able to support the sector to grow in the future. Four key challenges for the sector are identified: operating outside of the EU, new relationships following Brexit, technological change and other global challenges, such as climate change. The Review will entail a comprehensive evaluation of the regulatory framework in a phased process. The first phase covers coordination by the U.K. regulators. Later phases will cover other areas, to be announced once the arrangements for the U.K.'s exit from the EU are clearer.

    The call for evidence focuses on how the government and regulators work together to ensure the best outcomes for the financial services sector, consumers of financial services and the U.K. Feedback is requested on what stakeholders consider works well and the areas for potential improvement. Where possible, responses should provide examples. Responses to the call for evidence should be submitted by October 18, 2019.

    View the call for evidence.
  • UK Conduct Regulator Publishes Annual Report
    07/09/2019

    The U.K. Financial Conduct Authority has published its Annual Report and Accounts for the year ended March 31, 2019. The report considers topics including: (i) key highlights from 2018/2019; (ii) the U.K.'s withdrawal from the EU and the FCA's proposed approach to regulation in the wake of Brexit; (iii) the FCA's cross-sector and sector priorities; and (iv) perimeter issues. The report follows the publication of the FCA's first Annual Perimeter Report in June 2019, which provides a review of the FCA's regulatory perimeter.

    Read more.
  • Global Financial Innovation Network Publishes Progress Report
    06/28/2019

    The Global Financial Innovation Network, the group of financial regulators established in 2018 to support international financial innovation, has published a report on the progress made during its first year. The group is made up of 35 global regulators from 21 jurisdictions that work together to share knowledge and market experiences and enable innovative firms to interact with a network of regulators.

    Read more.
  • Bank of England Publishes Report on the Future of the UK Financial System and the Bank's Priorities for the Future
    06/20/2019

    Huw van Steenis, the Bank of England financier appointed by the BoE in 2018 to review the future of the U.K. financial system, has published his "Future of Finance" report, setting out a vision for the medium-term future of the U.K. financial system and the BoE's role in supporting that. The report was based on consultations with entrepreneurs, financiers, tech firms, global investors, consumer groups, charities, policymakers and business leaders across the U.K. and overseas. In response, the BoE has published a document which sets out the actions it intends to take to deal with the challenges and opportunities identified in the report.

    Read more.
  • UK FICC Markets Standards Board Announces Consultation on Draft Statement of Good Practice
    06/20/2019

    The U.K. FICC Markets Standards Board has published a Transparency Draft of its new Statement of Good Practice on Conflicts of Interest. The Statement aims to provide guidance for participants in the fixed income, currencies and commodities markets on ways to identify and manage risks arising from conflicts of interest in the FICC markets. The guidance is particularly targeted at firms operating in Europe and the conflicts that may arise from the sale and trading of publicly listed or over-the-counter securities or financial instruments. 

    Read more.
  • UK Financial Conduct Authority Publishes First Annual Perimeter Report
    06/19/2019

    The U.K. Financial Conduct Authority has published its first annual perimeter report, which (i) describes the boundaries of the FCA's regulatory oversight, (ii) considers challenges to the regulatory perimeter and (iii) sets out its aims for the future. The motivations behind the report include recent high profile controversies involving firms on the periphery of the FCA's regulatory perimeter (including London Capital & Finance which issued non-transferable bonds to consumers), innovations in technology that test the boundaries of the perimeter and the post-Brexit future of U.K. financial regulation.

    Read more.
  • European Banking Authority Proposes Guidelines on Loan Origination and Monitoring
    06/19/2019

    The European Banking Authority has launched a consultation on draft Guidelines on loan origination and monitoring. The consultation stems from the European Council's Action Plan on tackling non-performing loans in Europe. The purpose of the guidelines is to improve the processes by which institutions grant loans and monitor them thereafter, with the overarching goal of improving the financial stability of the EU financial system.

    Read more.
  • G20 Finance Ministers and Central Bank Governors Meet in Japan
    06/09/2019

    The G20 Finance Ministers and Central Bank Governors have published a Communiqué from the most recent G20 Summit held in Japan.

    Read more.
  • Financial Stability Board Publishes Report on Decentralized Financial Technologies
    06/06/2019

    The Financial Stability Board has published a report on the use of decentralized financial technologies and the implications these may have for financial stability, regulation and governance. The report has been delivered to G20 Finance Ministers and Central Bank Governors ahead of the G20 meeting on June 8-9, 2019.

    Read more.
  • UK Regulator Publishes Findings from LIBOR Review
    06/05/2019

    The U.K. Financial Conduct Authority has published a report summarizing the preparations that firms are making for the market transition away from LIBOR to alternative risk-free rates by the end of 2021. The report is based on feedback from firms in response to the joint Dear CEO letter sent to major banks and insurers by the FCA and the Prudential Regulation Authority, which sought information on the action firms were taking to prepare for the phase-out of LIBOR. The report also includes suggestions for how firms might enhance their preparations.

    Read more.
  • Financial Stability Board Publishes User's Guide to Overnight Risk-Free Rates
    06/04/2019

    The Financial Stability Board has published a user's guide to overnight risk free rates, providing an overview of such rates and how they can be calculated, as well as proposals for how they can be used in cash products. The user's guide falls in line with the development of RFRs as alternative benchmarks.

    Read more.
  • UK Regulator Publishes Policy Statement on Peer-To-Peer and Investment-Based Crowdfunding Platforms
    06/04/2019

    The U.K. Financial Conduct Authority has published a Policy Statement containing its final changes to the rules and guidance governing loan-based crowdfunding platforms (or "peer-to-peer" platforms). The Policy Statement follows the FCA's July 2018 consultation paper on proposed changes to the regulation of the crowdfunding sector. Peer-to-peer platforms will need to comply with the majority of the changes by December 9, 2019, with the exception of the FCA's Mortgage and Home Finance Conduct of Business rules, which will apply to platforms that offer home finance products from June 4, 2019. The Policy Statement also reflects on the rules applicable to investment-based crowdfunding platforms (i.e. platforms that allow investors to invest in businesses directly, for instance through the purchase of shares or debt securities), in particular surrounding financial promotions for non-readily realized securities and non-mainstream pooled investments. The FCA continues to review responses to its July 2018 consultation paper in relation to these platforms and may issue additional rules and guidance in due course.

    Read more.
  • US-UK Financial Innovation Partnership Announced
    05/29/2019

    The U.S.-U.K. Financial Regulatory Working Group has announced the establishment of a Financial Innovation Partnership between the U.S. and the U.K. The objective of the Partnership is to strengthen bilateral engagement on emerging trends in financial services innovation. It will focus on regulatory engagement and commercial engagement by providing opportunities for the private sector in one country to engage with industry associations and market participants in the other country.

    The U.S.-U.K. Financial Regulatory Working Group, formed in April 2018, is a forum for treasury staff and financial regulatory authorities to exchange views on the regulatory relationship between the United States and the U.K. The objectives of the Working Group are to further financial regulatory cooperation, improve transparency, reduce regulatory uncertainty, identify possible cross-border implementation issues, address regulatory arbitrage and work towards achieving compatibility of U.S. and U.K. laws and regulations.

    View the announcement.
  • Financial Stability Board Assesses Legal Entity Identifier Implementation
    05/28/2019

    The Financial Stability Board has published a thematic review on the implementation of the Legal Entity Identifier. An LEI is a unique identifier of entities that engage in financial transactions. It is intended that such an identifier will be held by all legal entities participating in financial markets across the globe. It is envisaged that the LEI system will lead to better data aggregation, enhance systemic risk monitoring and reduce costs to market participants. The thematic review provides a summary assessment of the successes of the LEI, sets out steps that are still needed to fully achieve the G20's objectives and makes recommendations, addressed to the FSB, other international bodies (such as the International Organization of Securities Commissions and Basel Committee on Banking Standards), FSB member jurisdictions, the LEI Regulatory Oversight Committee and Global LEI Foundation, to tackle the issues that are preventing wider adoption of the LEI.

    View the report.
  • Financial Conduct Authority Publishes Progress Report on Conduct Questions for Wholesale Banks
    05/28/2019

    The Financial Conduct Authority has published its latest report on industry progress made against the "Five Conduct Questions" it poses to wholesale banks in a bid to improve their conduct and culture. The FCA will use its findings to assess the impact that embedding good conduct is having on the wholesale banking market and to consider the potential for more sustainable mindset change. The report also includes strategic considerations that firms may address to improve their approach to conduct challenges and an assessment of whistleblowing initiatives in the wholesale banking sector. In particular, the FCA found that whistleblowing channels require improvement, and that non-financial misconduct (such as bullying, sexual harassment and other forms of personal misbehavior) is a significant problem across firms. The FCA continues to welcome face-to-face meetings with wholesale financial services firms to discuss thinking on all aspects of the report.

    Read more.
  • EU Technical Advice on Incorporating Sustainability Factors Into EU Regulation
    05/03/2019

    The European Securities and Markets Authority has published its final report and technical advice to the European Commission on incorporating sustainability risks and factors into European regulation. The European Commission sought advice from ESMA and the European Insurance and Occupational Pensions Authority in July 2018 on the introduction of environmental, social and governance considerations into the Markets in Financial Instruments Directive II, the Insurance Distribution Directive, the Alternative Investment Fund Managers Directive, the Undertakings for Collective Investment in Transferable Securities Directive and the Solvency II Directive. The introduction of sustainability considerations into European regulation sits against the backdrop of the European Commission's Sustainability Action Plan, which aims to encourage sustainable investment and mitigate climate change risk in line with the 2016 Paris Agreement and UN 2030 Agenda for Sustainable Development. In response, ESMA opened consultations seeking input from stakeholders, which closed on February 19, 2019.

    Read more.
  • Financial Conduct Authority Calls for Input on its Review of UK Financial Advice Market
    05/01/2019

    The Financial Conduct Authority is seeking input on its evaluation of the Retail Distribution Review and Financial Advice Market Review, two initiatives introduced in 2006 and 2015, respectively, which aimed to enhance the outcomes for retail consumers from financial advice and guidance given by institutions. The evaluation has been launched in line with a commitment by the FCA to conduct a review of the initiatives in 2019. Responses should be submitted by June 3, 2019.

    Read more.
  • UK Regulator Publishes Final Mission Approach Documents for Supervision and Enforcement
    04/24/2019

    The U.K. Financial Conduct Authority has published its finalized Approach to Supervision and Approach to Enforcement, following feedback to its consultation between March 21 and June 21, 2018 on drafts of the two approach documents. The documents should be read alongside the FCA's Mission document which was first published in October 2016 and most recently updated in November 2017. The documents form part of a series of formal approach documents explaining the FCA's approach to regulation in more depth.

    Read more.
  • UK Conduct Regulator Further Examining Duty of Care Owed by Firms to Consumers
    04/23/2019

    The Financial Conduct Authority has published a Feedback Statement to its July 2018 discussion paper, "A duty of care and potential alternative approaches". In the discussion paper, the FCA raised the possibility of introducing a new duty of care for all financial services firms.

    Read more.
  • UK Regulator Sets Out Strategy to Manage Risk of Harm from Wholesale Brokers
    04/18/2019

    The Financial Conduct Authority has published a "Dear CEO" letter addressed to wholesale market broking firms highlighting its view of the key risks of harm that such brokerage firms pose for their clients and markets and the FCA's strategy for mitigating those risks. Firms are expected to consider the issues raised and take steps to mitigate risks where applicable.

    The key drivers of harm have been identified as commission-based compensation packages (the "eat what you kill" model), inadequate governance arrangements, potential conflict of interest or compliance issues arising from the variety of workflows performed by such brokerages and risks of market abuse and financial crime, all of which may be linked to cultural issues. In the FCA's view, certain brokers in wholesale markets have failed to keep pace with legislative and regulatory developments and lag behind other sectors in embedding a culture of good conduct.

    Read more.
  • Working Group on Sterling Risk-Free Rates Publishes Discussion Paper on SONIA Referencing Conventions
    03/18/2019

    The Working Group on Sterling Risk-Free Rates has published a discussion paper aimed at raising awareness for market participants of the conventions for referencing SONIA in new financial contracts. The paper focuses on the most significant conventions for contracts that reference SONIA directly. The paper concludes with a series of questions for market participants, who should submit responses by April 30, 2019.

    Read more.
  • European Commission Requests Report on Potential Undue Short-Term Pressure by Financial Service Participants on Corporations
    02/06/2019

    The European Commission issued a call for advice to each of the European Supervisory Authorities requesting evidence and possible advice on potential undue short-term pressure by financial service participants on corporations. The call for advice relates to Action 10 of the EU's Sustainable Finance Action Plan, which aims to foster transparency and long-termism in financial and economic activity by exploring possible drivers of undue short-termism. The Commission wants the ESA's report to: (i) provide evidence of any short-termism and, if any, the consequences thereof; (ii) assess the drivers of such short-termism, including the effects of regulation on financial market participants, for example, the guidance on remuneration practices; (iii) identify existing regulations that either mitigate or exacerbate short-term pressures; and (iv) evaluate the need for regulatory or policy action and propose specific areas where action is needed.

    The Commission considers that pressure of this kind could lead corporations to overlook long-term risks and opportunities, such as those related to climate change and other factors related to sustainability. Companies facing short-term pressure could, as a result, forgo investment in areas important for a successful transition towards a sustainable economy. The ESAs are due to publish their report in December 2019.

    View the call for advice.
  • UK Financial Conduct Authority Publishes Its Final Approach to Authorization
    12/12/2018

    The Financial Conduct Authority has published its final document, entitled "FCA Mission: Approach to Authorisation," explaining the purpose of authorization and the FCA's approach to it. The paper sets out details of the FCA's approach to: (i) evaluating whether firms meet the requisite Threshold Conditions and assessing whether individuals are "fit and proper"; (ii) how the FCA uses authorization to promote competition; and (iii) revoking authorization.

    Read more.
  • US State Regulators Sue Office of the Comptroller of the Currency Over FinTech Charter
    10/25/2018

    The Conference of State Bank Supervisors has sued the U.S. Office of the Comptroller of the Currency to prevent it from granting charters for special purpose national banks to non-depository FinTech companies. The CSBS is the nationwide organization of state banking regulators in the United States.

    The CSBS filed the lawsuit upon the OCC’s announcement on July 31, 2018 that it would begin accepting these applications. The CSBS previously sued the OCC over its ability to provide SPNB charters in April 2017. The federal district court in D.C., however, dismissed the first suit for lack of subject matter jurisdiction and ripeness, stating that the OCC had not decided whether to grant SPNB charters to FinTech firms at that time.

    Read more.
  • European Commission Announces Work Plan for 2019
    10/23/2018

    The European Commission has published a Communication, outlining its work plan for 2019. The Communication is addressed to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. The Communication discusses the ongoing challenges for the EU in the run-up to the European Parliamentary elections and the post-Brexit Summit in Sibiu at which a new multi-annual framework for the EU27 will be finalized.

    Separately published Annexes to the Communication relating to: (i) new initiatives; (ii) REFIT initiatives; (iii) priority pending proposals; (iv) legislative initiatives that have been withdrawn; and (v) a list of envisaged repeals. Priority pending proposals of particular relevance to financial institutions include legislative proposals relating to the forthcoming sustainable finance package, cross-border distribution of collective investment schemes, crowdfunding, amendments to the European Market Infrastructure Regulation, prudential regulation and supervision of investment firms and a proposed amending regulation relating to minimum loss coverage for non-performing exposures.

    Read more.
  • European Securities and Markets Authority Publishes Its 2019 Priorities
    10/01/2018

    The European Securities and Markets Authority has published its Annual Work Programme for 2019, dated September 26, 2018. ESMA sets out its focus areas for 2019 and provides details of expected outputs within each of the areas. ESMA also indicates that a number of pieces of EU legislation may be reviewed. These include the Market Abuse Regulation and the clearing obligation under the European Market Infrastructure Regulation, in addition to the reviews that have already been announced.

    Read more.
  • US-UK Financial Regulatory Working Group Holds Inaugural Meeting
    09/18/2018

    The U.S.-U.K. Financial Regulatory Working Group has issued a statement following its inaugural meeting held on September 12, 2018 in London. Participants discussed the outlook for financial regulatory reforms and future priorities, including possible areas for deeper regulatory cooperation to facilitate further financial services activity between U.S. and U.K. markets. Participants also discussed Brexit-related issues, including: (i)  U.S.-U.K. financial regulatory issues resulting from the U.K.’s exit from the EU;  and (ii) the implications of Brexit for financial stability and cross-border financial regulation, including contractual continuity and potential cliff-edge risks.

    The Working Group was established in April 2018 to serve as a forum for staff from the U.S. Department of the Treasury and HM Treasury and financial regulatory authorities to exchange views on the regulatory relationship between the U.S. and the U.K. Its objectives are to further financial regulatory cooperation, improve transparency, reduce regulatory uncertainty, identify possible cross-border implementation issues, address regulatory arbitrage and work towards achieving compatibility of U.S. and U.K. laws and regulations.

    The next meeting of the Working Group will be held in the first half of 2019 in Washington, D.C.

    View the statement
  • Financial Stability Board Consults on Implementation of the Legal Entity Identifier
    08/16/2018

    The Financial Stability Board has launched a thematic peer review on implementation of the Legal Entity Identifier and is inviting feedback on implementation of the LEI at the same time. The objective of the LEI system is for unique identifiers to be held by all legal entities participating in financial markets across the globe. It is envisaged that the LEI system will lead to better data aggregation, enhance systemic risk monitoring and reduce costs to market participants.

    Using the peer review, the FSB will: (i) consider the approaches and strategies used by FSB members to implement the LEI, including its adoption for regulatory requirements; (ii) assess whether current levels and rates of LEI adoption are sufficient to support the ongoing and anticipated needs of FSB member authorities; (iii) identify the challenges in further advancing the implementation and use of the LEI; and (iv) if appropriate, make recommendations for addressing any challenges.

    Read more.
  • UK Conduct Authority Contemplates Introducing a New Duty of Care
    07/17/2018

    The Financial Conduct Authority has published its Approach to Consumers alongside a discussion paper on the potential introduction of a new duty of care and possible alternative approaches. The Approach to Consumers forms part of a series of formal approach documents explaining the FCA's approach to regulation in more depth. It should be read alongside the FCA's Mission document, which was first published in October 2016 and most recently updated in November 2017.

    The Approach to Consumers sets out the FCA's approach to regulating for retail customers. The document sets out the FCA's vision for well-functioning markets that work for consumers, the relevant regulatory and legal framework, when and how the regulator will act to protect consumers, the FCA's policy position on key issues and its strategy for ensuring that its consumer protection objective is advanced with the greatest impact.

    Read more.
  • UK Draft Regulations Restricting the Assignment of Receivables Published
    07/06/2018

    The draft Business Contract Terms (Assignment of Receivables) Regulations 2018 have been laid before Parliament. The draft Regulations will invalidate terms in business contracts that prohibit or restrict the assignment of receivables, including terms that prevent the enforcement of a receivable. A receivable in this context is a right to be paid under a contract for the supply of goods, services or intangible assets. The Regulations will not apply if the person to whom the receivable is owed is a large enterprise or a special purpose vehicle.

    Read more.
  • UK Financial Conduct Authority Consults on a New Directory For Financial Services Workers
    07/04/2018

    The Financial Conduct Authority has published a consultation paper setting out proposals to introduce a new directory of financial services workers.

    In the consultation paper, the FCA explains that one effect of the extension of the Senior Management and Certification Regimes to all financial services firms will be that the Financial Services Register will contain the details of fewer individuals. Currently the Financial Services Register contains details of individuals who have been approved by the FCA or PRA. This includes individuals in senior management roles, individuals approved to hold controlled functions and individuals who hold customer-facing roles. However, this will change following the extension of SM&CR to all firms, because Individuals in customer functions, for example, will need to be assessed as fit and proper by firms rather than being approved by the regulators. Only individuals in specified senior manager roles will be approved by the relevant regulators and entered on the Register.

    Read more.
  • European Commission Proposes Legislative Package on Sustainable Finance
    05/24/2018

    The European Commission has published a package of legislative reforms on sustainable finance. The aim of the package of reforms, which form part of the Commission's broader Capital Markets Union initiative, is to ensure that environmental, social and governance considerations are consistently integrated into the investment and advisory process across sectors. The proposed measures comprise:

    (i) a proposed Regulation on the establishment of a framework to facilitate sustainable investment. This will establish an EU-wide classification system for environmentally sustainable economic activities and ensure that investment strategies are oriented towards economic activities that genuinely contribute to achieving environmental objectives. The proposed Regulation will empower the European Commission to adopt delegated acts to specify technical screening criteria to assess the contribution of a given economic activity to a particular environmental objective as substantial. A list of six environmental objectives is set out in the proposed regulation, namely: climate change mitigation; climate change adaptation; sustainable use and protection of water and marine resources; transition to a circular economy, waste prevention and recycling; pollution prevention and control; and protection of healthy ecosystems (which includes biodiversity conservation).

    Read more.
  • US Office of the Comptroller of the Currency Encourages Banks to Meet Consumers’ Short-Term, Small-Dollar Credit Needs
    05/23/2018

    The U.S. Office of the Comptroller of the Currency issued a bulletin encouraging banks to offer responsible short-term small-dollar loans to help meet the credit needs of their customers.  The OCC reminded banks, however, that any short-term small-dollar lending should be done in accordance with three core lending principles, including:  (i) that all bank products should be consistent with safe and sound banking, treat customers fairly and comply with applicable laws and regulations, (ii) that banks should effectively manage the risks associated with the products they offer, including credit, operational, compliance and reputational risk, and (iii) that all credit products should be underwritten based upon reasonable policies and practices, including guidelines governing the amounts borrowed, frequency of borrowing and repayment requirements.  The OCC bulletin also lists a number of policies and procedures topics specific to short-term small dollar lending, including with respect to loan pricing and repayment terms, effective management of credit risk, loan servicing and timely reporting of repayment activities to credit bureaus.  In addition, the OCC bulletin encourages banks to discuss their plans to offer short-term small-dollar lending products with their OCC portfolio manager or other OCC supervisory authority, especially if the offering of these products represents a substantial deviation from a bank’s existing business plan.

    View â€‹full text of the OCC bulletin.
  • European Commission Proposes Protective Legislation for Whistleblowers Reporting EU Law Breaches
    04/23/2018

    The European Commission has published a proposal for a Directive on the protection of persons reporting on breaches of Union law. Whistleblowers help prevent damage and detect threat or harm to the public interest that may otherwise remain hidden, but fear of retaliation can often discourage them from reporting concerns.

    The importance of providing effective whistleblower protections for safeguarding the public interest has been acknowledged both at European and international level. At EU level, whistleblower protections are currently provided only for specific sectors and to varying degrees. This means that, in many situations, whistleblowers are not properly protected against retaliation. The proposed Directive will address this fragmentation by encompassing "the broadest possible range of categories of persons, who, by virtue of work-related activities (irrespective of the nature of these activities and whether they are paid or not), have privileged access to information about breaches." Areas covered include financial services, money laundering and terrorist financing.

    Read more.
  • US and UK Establish Financial Regulatory Working Group
    04/19/2018

    The U.S. Treasury Department and HM Treasury have issued a joint statement announcing the establishment of a Financial Regulatory Working Group. The Working Group will be a forum for treasury staff and financial regulatory authorities to exchange views on the regulatory relationship between the United States and the U.K. The objectives of the Working Group will be to further financial regulatory cooperation, improve transparency, reduce regulatory uncertainty, identify possible cross-border implementation issues, address regulatory arbitrage and work towards achieving compatibility of U.S. and U.K. laws and regulations.

    View the statement.
  • UK Financial Conduct Authority Consults on Ex Post Impact Evaluation
    04/09/2018

    The Financial Conduct Authority has published a discussion paper on its proposed approach to using ex post impact evaluation to assess the impact of its work on consumers, firms and markets. The consultation paper sets out what the FCA means by ex post impact evaluation, why it is important to the FCA, the scope of ex post impact evaluations, how the FCA will select which work to evaluate, how such evaluations will be conducted and the key challenges involved in ex post impact evaluations. The FCA is seeking feedback on its proposed approach.

    Responses to the discussion paper should be submitted by July 9, 2018.

    View the discussion paper
  • UK Financial Conduct Authority Elaborates on its Mission and Consults on Approaches to Competition and Authorization
    12/11/2017

    The UK Financial Conduct Authority has published two consultations, seeking feedback on draft documents setting out its regulatory approach to authorization and competition. The two documents, once finalized, will form part of a series of formal approach documents explaining the FCA's approach to regulation in more depth. They should be read alongside the FCA's Mission document, which was first published in October 2016 and most recently updated in November 2017.

    In the consultation on its approach to authorization, the FCA explains the public value and purpose of requiring authorization to conduct regulated financial services activities and the FCA's current approach to authorizing firms and individuals. The FCA seeks feedback on four questions: (i) understanding of the Threshold Conditions that firms and individuals must meet for authorization, and any areas where the FCA might be more specific; (ii) how the FCA might improve its approach to supporting firms and individuals to meet the minimum standards and how the FCA might better promote competition; (iii) whether the FCA has suggested the correct commitments to firms making authorization applications and what other commitments could be made; and (iv) whether the FCA has prioritized the right strategic goals, and, if not, what additional goals could add the most public value to the FCA's work.

    Read more.
  • UK Financial Conduct Authority Publishes Measures to Improve the UK Financial Advice Market
    12/08/2017

    The Financial Conduct Authority has published a Policy Statement setting out new Handbook rules and guidance to implement some of the recommendations arising from the Financial Advice Market Review launched by the FCA jointly with HM Treasury in August 2015.

    Read more.
  • European Commission Consults on Improving Supervisory Reporting
    12/01/2017

    Following its 2015 Call for Evidence on the EU regulatory framework for financial services, the Commission has issued a report on progress on the targeted follow-up measures to the Call for Evidence, which was set out in a November 2016 Communication. Alongside the progress report, the European Commission has launched a consultation on supervisory reporting requirements. Some of the respondents to the Call for Evidence had highlighted overlaps and inconsistencies between reporting requirements in certain pieces of financial legislation, a reportedly excessive number of requirements, as well as, at times, insufficient clarity as to what needs to be reported and an insufficient use of international standards. Other respondents also highlighted the costs (including IT costs) of implementing reporting requirements and a number of respondents had mentioned that many EU Member States gold-plate the requirements.

    The consultation seeks feedback in a number of areas, with the aim of gaining evidence on the cost of compliance with existing EU level supervisory reporting requirements, as well as on the consistency, coherence, effectiveness, efficiency, and added value of those requirements. The feedback from the consultation will provide important guidance to the Commission when preparing, if considered appropriate, a formal Commission proposal.

    Comments on the consultation are invited by February 28, 2018.

    View the Consultation Paper.

    View Progress Report on the Call for Evidence.

    View the November 2016 Communication.

    View Press Release.
  • UK Court of Appeal Grants ENRC Permission to Appeal Widely Criticised Privilege Ruling - and Law Society Seeks to Intervene
    10/11/2017

    On October 11, 2017, Eurasian Natural Resources Corporation was granted permission by the Court of Appeal to appeal the High Court's ruling articulating a significant restriction on the scope of legal professional privilege (in particular, litigation privilege). The Law Society of England & Wales - which has expressed concern about the High Court's ruling and its implication for when and how companies and their employees are protected by privilege - has since announced that it has applied to the Court for permission to intervene in the appeal.

    Although the ENRC case was brought by the UK Serious Fraud Office, the High Court's ruling - and the future decision by the Court of Appeal - will impact upon the way investigations are conducted in the context of (prospective) criminal prosecutions by the UK Financial Conduct Authority as well.

    Read more

  • European Commission Legislative Proposals for Enhanced Powers for European Supervisory Authorities and the European Systemic Risk Board

    09/20/2017

    The European Commission has published legislative proposals designed to strengthen and further integrate the supervisory framework of the European Union. The proposals build on contributions to the Commission's public consultation in autumn 2016 on the European Systemic Risk Board and its public consultation in spring 2017 on the European Supervisory Authorities – the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority.

    Read more.
  • European Commission Launches Consultation on Further Reducing Barriers to Post-Trade Services
    08/23/2017

    The European Commission has launched a consultation seeking views about the current state of post-trade markets, the main trends and challenges faced by post-trade services providers and their users, the existence and scale of remaining or new barriers to post-trade services used in financial transactions, the risks associated with such barriers and the best ways to address them.

    Alongside the consultation, the Commission has published the report of the European Post-Trade Forum (EPTF), an expert group established by the Commission in early 2016 to assess the evolution of the EU post-trade landscape and the progress made in removing the "Giovannini barriers" to post-trade services. The EPTF report identifies those Giovannini barriers that have been successfully addressed since 2001 but cites further barriers that have arisen due to technological and market developments in the intervening fifteen years, in particular developments in derivatives markets, securities finance activities, collateral management and post-trade reporting.

    The Commission consultation seeks stakeholders' views on a wide ranging set of questions, including: the relative importance of trends in post-trade in the EU; technological advances (such as distributed ledger technology and other FinTech developments); financial stability concerns arising from the susceptibility of post-trade areas to systemic risk; the means by which EU post-trade markets could become more attractive internationally; the near and longer term strategy for EU post-trade services and the challenges the markets are likely to face.

    Read more.
  • European Securities and Markets Authority Consults on Guidelines on Internalised Settlement Reporting Under the Central Securities Depositaries Regulation
    07/10/2017

    The European Securities Markets Authority has published a consultation on proposed guidelines to ensure common, uniform and consistent application of the provisions of the Central Securities Depositaries Regulation that apply to internalized settlement reporting and to the exchange of information between ESMA and national regulators.

    Read more.
  • G20 Leaders Outline Action Plan Following Hamburg Summit
    07/08/2017

    The G20 Leaders met in Hamburg, Germany on July 7-8, 2017 and have published a Leaders' Declaration and an Action Plan setting out the G20's strategy for achieving strong, sustainable, balanced and inclusive growth. The Action Plan includes ongoing and planned work on financial sector regulation and development.

    Read more.
View All (500+)