Since our last publication, the Digital Economy Bill has received Royal Assent and the text of the Digital Economy Act 2017 has been published. In other news, the FCA has published a guidance consultation on its approach to the review of insurance business transfers under Part 7 of FSMA.

UK

Digital Economy Act 2017: financial services aspects

The Digital Economy Bill has received Royal Assent and the text of the Digital Economy Act 2017 has been published. The Act contains the following provisions that may be particular interest to financial services practitioners and which appear exactly as drafted in the Bill:

  • section 112 of the Act (clause 85 of the Bill) amends the Financial Services and Markets Act 2000 (FSMA) to give HM Treasury the power to apply the settlement finality regime to payment institutions as participants in payment or securities settlement systems;
  • section 113 of the Act (clause 86 of the Bill) amends Part 5 of the Banking Act 2009, which relates to the Bank of England's (BoE's) oversight of inter-bank payment systems, to extend its oversight beyond inter-bank payment systems to include other types of payment systems; and
  • section 118 contains commencement provisions for the Act. Section 112 takes immediate effect. Section 113 and Schedule 9 come into force on 28 June 2017 (that is, at the end of the period of two months beginning with the day on which the Act was passed).

legislation.gov.uk, 9 May 2017

FCA guidance consultation on its approach to the review of Part 7 insurance business transfers

The FCA has published a guidance consultation (GC17/5) on its approach to the review of insurance business transfers under Part 7 (which the FCA refers to as Part VII) of the Financial Services and Markets Act 2000 (FSMA). The FCA explains in the draft guidance that, while the PRA leads the Part 7 process, the FCA also has an active role. In particular, under section 110 of FSMA, the FCA is entitled to be heard on an application to sanction a Part 7 transfer. 

FCA, 15 May 2017

PSR publishes webpage on contactless mobile payments

The Payment Systems Regulator has published information on its work on contactless mobile payments and what it plans to do next. Payment Systems Regulator, 12 May 2017

PRA policy statement – strengthening individual accountability in banking and insurance: amendments and optimisations

The PRA has published a policy statement (PS12/17) on amendments and optimisations to the Senior Managers and Certification Regime (SM&CR) and the Senior Insurance Managers Regime (SIMR). Bank of England, PRA, May 2017

FCA announces strategic review of retail banking business models

The FCA has published a new webpage setting out information on its strategic review of retail banking business models. The review aims to enable the FCA to understand:

  • retail banking business models in greater depth by looking at firms' business models to identify any potential conduct or competition issues;
  • how free-if-in-credit (FIIC) banking is paid for, in particular whether it leads to any distributional concerns between different types of consumers; and
  • the impact of changes such as the increased use of digital channels and reduced branch usage on business models and consider potential consequences for the FCA's consumer protection and competition objectives.

The review will encompass financial service providers including retail banks, building societies and credit unions. However, the most focus will be on the larger retail banking groups in the light of the high proportion of the UK market that they hold. The FCA intends to engage with relevant financial service providers, as well as consumer bodies, during May and June 2017, before issuing an information request to firms. It expects to produce a project update in Q2 2018.

FCA, 11 May 2017

FCA increases functionality on Handbook website

The FCA has launched new features on its Handbook website to allow searches by key topics within the Conduct of Business sourcebook (COBS) that, depending on feedback, it may roll out to the rest of the Handbook. The aim is that the changes will enable people to find what they are looking for quickly and easily, making it simpler to identify related material.

FCA, 11 May 2017

JMLSG consults on revisions to Parts II and III of its AML and CTF guidance

The Joint Money Laundering Steering Group (JMLSG) has published revised versions of Parts II and III of its anti-money laundering (AML) and counter-terrorist financing (CTF) guidance for consultation. They are as follows:

  • A revised version of Part II of its AML and CTF guidance (dated 10 May 2017). This Part consists of industry-specific chapters dealing with particular issues faced by a range of sub-sectors of the financial services sector. (It appears that the chapter on electronic money is not yet available for consultation.)
  • A revised version of Part III of its AML and CTF guidance (dated 10 May 2017). This Part sets out specialist guidance on a number of topics.

On a related webpage, the JMLSG explains that it has revised the guidance in line with the proposed Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (which a number of bodies are referring to as the "Money Laundering Regulations 2017"). The proposed Money Laundering Regulations 2017 are designed to transpose the Fourth Money Laundering Directive (MLD4) and the revised Wire Transfer Regulation (revised WTR) in the UK. JMLSG, 9 May 2017

EU

EBA final report: guidelines on credit institutions' credit risk management practices and accounting for expected credit losses

The European Banking Authority has published a final report which contains guidelines on credit institutions' credit risk management practices and accounting for expected credit losses.

EBA, 12 May 2017

EBA final draft RTS and ITS on standardised terminology and disclosure documents under Payment Accounts Directive

The EBA has published a report containing the final draft version of regulatory technical standards (RTS) and implementing technical standards (ITS) setting out standardised terminology for services linked to a payment account, standardised formats and common symbol of the fee information document (FID) and the statement of fees (SoF), under Articles 3(4), 4(6) and 5(4) of the Payment Accounts Directive. The annexes to the report contain the:

The EBA is currently translating the standardised terminology into all EU official languages and will make it available by the end of May 2017. The next step is for the RTS and ITS to be submitted to and adopted by the European Commission. Following that, member states will have to integrate the standardised terms into their provisional lists of the most representative services and publish their final national lists. EBA, 5 May 2017