July Regulatory Update

By Kayne Osbourne MCSI | Uncategorized | 0 Comments

EBA publishes thematic report on the impact of fintech on payment and e-money institutions

The EBA has conducted a thematic review on the impact financial technology has on the business models of payment and e-money institutions. The report, published July 8th, covers current key trends shaping institutions’ business models, the different approaches to financial technology and the implementation of innovative technology.

FATF publishes guidance on assessing terrorist financing risk

The report by the Financial Action Task Force highlights the importance of establishing regular mechanisms to monitor terrorist financing risk on an ongoing basis, taking into account current threats and developments.The report covers: key considerations when determining the scope and governance of a terrorist financing risk assessment. Examples of information sources are provided for the identification of terrorist financing threats and vulnerabilities, and considerations for different country contexts

Read the report here.

Economic Crime Plan 2019 to 2022 published

On the 12th July, HM Treasury, the Home Office and UK Finance published the Economic Crime Plan 2019 to 2022. The Plan sets out seven key areas that were agreed in January 2019 by the Economic Crime Strategic Board. They seven areas are as follows:

• develop a better understanding of the threat posed by economic crime
• pursue better sharing and usage of information to combat economic crime within and between the public and private sectors across all participants
• ensure the powers, procedures and tools of law enforcement, the justice system and the private sector are as effective as possible
• strengthen the capabilities of law enforcement, the justice system and private sector to detect, deter and disrupt economic crime
• build greater resilience to economic crime by enhancing the management of economic crime risk in the private sector and the risk-based approach to supervision
• improve systems for transparency of ownership of legal entities and legal arrangements
• deliver an ambitious international strategy to enhance security, prosperity and the UK’s global influence

FCA consults on Guidance for firms on the fair treatment of vulnerable customers

The FCA has launched a Guidance Consultation (GC19/3) in order to provide regulatory clarity for firms involved in the supply of products or services to retail customers who are actually, or are potentially, vulnerable.

The FCA wants to see doing the right thing for vulnerable consumers deeply embedded in firms’ culture. Whilst many firms have made significant progress in how they treat vulnerable consumers, the FCA believes there needs to be more consistency across financial services sectors, and that in some cases, firms are clearly failing to consider the needs of vulnerable consumers, leading to harm.

FCA Policy Statement PS19/20 – Optimising the Senior Managers & Certification Regime: Feedback to CP19/4 and Final Rules

The FCA has published a Policy Statement (PS19/20) setting out final rules regarding the extension of the Senior Managers & Regime (SMCR) to FCA solo-regulated firms (including claims management companies) on 9 December 2019, following its Consultation Paper (CP19/4) in January 2019.

The main changes include the following:

• confirming that the Head of Legal function is excluded from the requirement to be approved as a senior manager
• amending the intermediary revenue criterion for the enhanced regime
• clarifying the requirements and scope of the Certification Regime
• extending Senior Manager Conduct Rule 4 (SC4) (requirement to ‘disclose appropriately any information of which the FCA or PRA would reasonably expect notice’) to non-approved executive directors at limited scope firms.

MiFID II product governance – Investment Association publishes Guidance

The Investment Association  published Guidance on the 31st July  on the distribution information required to meet product manufacturers’ regular product review obligation under MiFID II and the FCA’s Product Intervention and Product Governance (PROD) Sourcebook.