BANKING

Approach to current payment services regime: FCA feedback statement

The FCA has published a feedback statement which details responses to its call for input on the approach to the current payment services regime. In summary:

  • Respondents are happy with current guidance and find the PERG a useful source of information
  • Respondents feel the guidance could be updated to reflect developments in the market since it was first published in 2009
  • Further guidance on specific matters would be welcomed
  • Combining the FCA's payment services and e-money approach documents would be useful, as would raising awareness of the e-learning module for PSPs

The FCA will now develop its approach to the revised payment services regime and publish final guidance to help PSPs, following a further consultation.

FCA, 15 November 2016

Consultation on draft guidelines on application of IRB approach under CRR

The EBA has published a consultation paper on guidelines for the application of the internal ratings-based approach under the CRR. The draft guidelines relate to the EBA's broader work on the review of the IRB approach and aim to reduce unjustified variability in the outcomes of internal models. A further public hearing and workshop is planned for 19 January 2017 and comments can be made until the consultation ends on 10 February 2017. 

EBA, 14 November 2016

Guidelines on institutional protection schemes under CRR

The European Central Bank has issued guidelines laying down the principles for assessment and monitoring of IPS under the Capital Requirements Regulation. The guidelines which must be complied with from 2 December 2016, have been published in the OJ as follows:

In a press release the ECB explains that publishing the guidelines is designed to ensure new IPS applications are assessed in a harmonious way and consistently monitored.

European Central Bank, 15 November 2016

Speech on European banking sector and priorities from ECB

The European Central Bank has published a speech in which Sabine Lautenschlager, Executive Board member and Supervisory Board Vice-Chair, takes "a quick pulse check" of the banking sector in Europe. Key points covered include:

  • Resilience of banking confirmed by EU-wide banking stress test
  • Priority focus on viability of banks' business models
  • ECB review identifying that many euro area banks need to improve conduct of business and management of risk to achieve international best practices
  • Planned review of internal models which banks use to calculate their RWAs, involving over 100 assessments in 2017
  • Focus on credit risk and issue of NPLs

European Central Bank, 15 November 2016

Compromise proposal on MLD5 form the Council of the EU Presidency

The Presidency of the Council of the EU has published its second compromise proposal on the proposed MLD5 which will amend the Fourth Money Laundering Directive. Amendments are marked in underlined bold text and deletions highlighted by strikethrough.

Council of the EU, 14 November 2016

Financial crime priorities highlighted in government speech

A speech given by Amber Rudd, Home Secretary at the FCA's financial crime conference has been published. Topics highlighted include plans to deliver the Criminal Finances Bill and implementing the AML and CTF action plan.

Home Office, 14 November 2016

INSURANCE

Approach to supervising intermediaries' conduct in IAIS application paper

The IAIS has published an application paper on approaches to supervising the conduct of intermediaries to ensure skill, care and diligence. The paper sets out ideas which members may want to consider and follows on from a survey of the approaches of 60 members.  

International Association of Insurance Supervisors, 15 November 2016

INVESTMENTS AND FUNDS

Final report on guidelines on validation and CRAs' methodologies review from ESMA

ESMA has published a final report on guidelines on the validation and review of credit rating agencies' methodologies which aims to clarify expectations and promote consistent application of articles 8(3) and 8(5) of the CRA Regulation. Section 2 of the report considers feedback received to the consultation in July 2016.

ESMA, 15 November 2016

Supervisory approach for CCPs' product and service extensions and changes to risk models under EMIR

ESMA has published an opinion on common indicators for new products and services under article 15 of EMIR, as well as significant changes to risk models under article 49. A common supervisory approach is defined for NCAs dealing with central counterparties. This is to ensure a more consistent and transparent approach to the application of articles 15 and 49 under EMIR.

ESMA, 15 November 2016


WEALTH MANAGEMENT

Policy statement and final rules on capping early exit pension charges

A policy statement published by the FCA on capping early exit pension charges contains feedback to the May 2016 consultation. The FCA is going ahead with proposals outlined in CP16/15 and from 31 March 2017, early exit charges:

  • will be capped at 1% of a member's benefits
  • cannot be increased in existing schemes that currently have early exit charges set at lower than 1%
  • cannot apply in schemes entered into after the new rules come into force

Secondary legislation specifies matters that are not to be treated as early exit charges for the purpose of the cap.

FCA, 15 November 2016