The European Parliament has published a draft report on the European Commission’s proposal for a regulation of the European Parliament and of the Council on markets in crypto-assets and amending Directive (EU) 2019/1937 (COM(2020)0593 – C9-0306/2020 – 2020/0265(COD))
Suggested amendments to the Regulation include:
The European Parliament has called on the Commission to refer the matter to the Parliament again if it replaces, substantially amends, or intends to substantially amend its proposal. It also instructs its President to forward its position to the Council of the EU, the Commission and the national parliaments.
In January 2020 the Open Banking Implementation Trustee sent the CMA (Competition & Markets Authority), a proposal for a revised Agreed Timetable and Project Plan (the Roadmap), regarding implementation requirements of the Retail Banking Market Investigation Order 2017 (the Order), as they relate to Open Banking. The proposal was subsequently amended, and the timetable adjusted in May 2020 to reflect the impact of the coronavirus pandemic. Although some of the dates have been moved back since then, the implementation requirements of ‘the Order’ will be delivered by the end of 2021.
The purpose of this document is to seek stakeholder views on what arrangements would be appropriate to put in place to ensure the effective oversight and governance of the CMA’s open banking remedies following the delivery of the implementation requirements of ‘the Order’ and how the transition process towards the new governance model should be managed.
Questions raised by the CRM include:
Whether the successor organisation proposed by UK Finance proposals would be (a) independent and accountable (b) adequately funded (c) dedicated to serving the customer’s interests (d) robust and sustainable.
What compliance monitoring arrangements will be necessary for the CMA to put in place going forward, what transitional arrangements should be adopted, and when the process should begin.
The CMA’s consultation closed on 29 March 2021.
The objective of the Financial Action Task Force’s (FAFT) guidance is to clarify and explain how supervisors should apply a risk-based approach to activities in line with the FATF Standards. It also explains common expectations and identifies innovative practices that ways that can help improve the effectiveness of AML/CFT supervision and therefore the overall AML/CFT system.
The guidance is set out in three parts:
The guidance, based on the High Court’s judgement and declaration, and the additional statements from the Supreme Court in the context of insurers’ obligations under the FCA’s rules to handle claims fairly.
The guidance sets out:
The guidance is in immediately effect. The FCA expects all issues relating to proving the presence of COVID-19 will have been resolved by the 31st January 2022.
The policy statement summarises the responses the FCA received to two questions on proposed changes relating to changes to contactless payment.
The FCA confirms the decision to amend the contactless exemption in Article 11 of the regulatory technical standards on strong customer authentication (SCA-RTS) to increase the single transaction threshold for contactless card payments from £45 to £100, and the cumulative transaction threshold from £130 to £300.
The FCA considers that the change to the cumulative transaction threshold replaces the supervisory flexibility it introduced to support the industry throughout COVID-19, and means that firms can set limits up to these thresholds but not exceed them. To support consumers and merchants during the pandemic, the FCA had previously confirmed that they were very unlikely to take enforcement action where a firm fails to require Chip and PIN when a customer exceeds the cumulative transaction value threshold. The FCA further states that, in making use of the new limits, firms must ensure that they mitigate the risk of unauthorised transactions and fraud.
The FCA’s amendments to Article 11 are set out in the Technical Standards on Strong Customer Authentication and Common and Secure Methods of Communication (Amendment) Instrument 2021, which came into force on 3 March 2021.
Andrew Bailey, the governor of the Bank of England, has urged the government to crack down on online tech giants hosting scam advertisements on their websites. Mr Bailey has suggested that regulations could be tightened using the Online Harms Bill, which is currently passing through Parliament.
The Online Harms Bill puts forward ambitious plans for a new system of accountability and oversight. New regulatory framework for online safety has been called for, which will clarify the responsibilities companies have in order to keep UK users, particularly children, safer online with the most robust action to counter illegal content and activity.
The Commons Work and Pensions Select Committee has also called on the governments to protect people from investment scams. In a report published yesterday, the committee said regulators ‘appear powerless’ to hold online companies to account in the same way they would be able to for traditional media.
The FCA has published a speech delivered by Executive Director of Enforcement and Market Oversight, Mark Steward, on the level of market abuse during 2020 and the steps it has taken to reduce it. Points made by Mr Steward include:
Mr Steward also provided some information on key recent enforcement cases including:
Other important points of relevance Mr Steward touched on include the risk of misleading online marketing to retail investors. The FCA have seen an increase in online scams and fraud during 2020.
Governor of the Bank of England, Andrew Bailey, who is also the former Chief Executive of the FCA, gave evidence to the Treasury Committee in February in relation to the FCA’s regulation of London Capital and Finance (LCF). LFC was made insolvent in 2019 as a result of alleged fraud against retail investors. An independent review of the FCA’s regulation of LCF was led by Dame Elizabeth Gloster, she wrote to the Committee about the evidence that Mr Bailey provided.
Chair of the Treasury Committee, Rt Hon. Mel Stride MP, has now written to Mr Bailey to clarify several statements that he made during the evidence session, including:
The Treasury Committee has requested a response from Mr Bailey by 22 March 2021.
This report supplements the original joint report, published back in December 2020, relating to trends and developments on trade-based money laundering. The additional report sets out to help the public and private sector better identify suspicious activity concerning international trade, and also details risk indicators derived from a sampling of data from the Trade-Based Money Laundering Project, including:
The FCA has published three new webpages, adding and amending the current TPRs already in place:
Landing Slots for Firms in the TPR
The next steps for firms who have received a ‘landing slot’ to apply for full authorisation in the UK are set out. The page also links to the further material firms should read before submitting an application.
Cancelling a Temporary Permission
On this webpage the FCA covers steps for cancelling a temporary permission; if the firm is in the TPR, or the supervised run-off regime and no longer has business requiring it to have a UK permission.
Supervising Firms in the TPR
The FCA explain their role and approach in supervising firms in the TPR.
The age old adage that some rules are made to be broken should never be applied when dealing with FCA regulations, as Premier FX Limited recently found out.
Premier FX Limited, formerly authorised by the FCA under the Payments Services Regulations to perform the regulated payment service of money remittance has been issued a public censure by the FCA for violating the regulations around handling clients money.
As an authorised remittence company, Premier FX Limited, was only allowed to take funds from customers accompanied by a payment order for onward transfer for an immediate or a future date execution. However, the company was found in breach of its regulations by receiving and holding the funds on behalf of its clients, misleading customers with the nature of its authorised services. The FCA elaborated that the company was not permitted to hold any of the client’s funds indefinitely.
A complex investigation involving the analysis of hundreds of thousands of transactions across Premier FX’s bank accounts over the course of several years, in a range of currencies and through a number of overseas bank accounts, uncovered that the company’s deceased Chief Executive, Peter Rexstrew, had also been using client funds to settle business expenses.
After the death of the company Chief Executive, the full scale of discrepancies came to light when his two children and staff attempted to continue the business, only to discover that the firm was unable to cover its own expenses.
The company unravelled within weeks of Peter Rexstrew’s death and collapsed when a large number of clients, whom had deposited funds in the company, demanded their funds back.
The moral of this woesome tale isn’t to fear furry, fanged strangers in the woods (although you should probably do that too), it’s that you should always take heed of FCA regulations, and if in doubt, or need help with your compliance, give us a shout.
The Guidance, issued under section 139A of the Financial Services and Markets Act 2000 as guidance on the FCA’s Principles for Businesses (the Principles). It sets out their views of what firms should do to comply with their obligations under the Principles and ensure they treat vulnerable customers fairly.
The report outlines how to identify and understand the needs of vulnerable customers, the skills and capability of staff, a summary of actions that firms should take to treat vulnerable consumers fairly, and monitoring and evaluation.
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This popular service is the comprehensive way to ensure your firm remains compliant. Providing you with periodic risk-based compliance reports focused on specific areas of the business, as well as any other ongoing advice or compliance assistance required.
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Providing you with training services specific to your business and activities. With financial regulation constantly evolving, it is imperative that your firm keeps up-to-date with its requirements, including maintaining the competency of staff. Some of the training services we currently provide to businesses include:
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