FCA publishes feedback statement regarding payment accounts subject to fees. The UK Financial Conduct Authority (FCA) published the comments it received concerning the implementation of the EU Payment Accounts Directive (PAD). The PAD requires the FCA to develop a list of the key services linked to payment accounts that are subject to a fee in the UK. In response to those comments, the FCA has added five additional services to the list; set out terms and definitions to describe these additional services; changed the term “unplanned overdraft” to “unarranged overdraft”; and made minor amendments to some of the definitions. (9/15/2015) FCA press release.
EBA publishes results of Basel III monitoring exercise. The European Banking Authority (EBA) published its eighth report on the Basel III monitoring exercise on the European banking system. The exercise, run in parallel with the one conducted by the Basel Committee on Banking Supervision (BCBS) at a global level, allows the gathering of aggregate results on capital ratios and leverage ratio, as well as on liquidity ratios for banks in the European Union. (9/15/2015) EBA press release.
ESMA reports market risk is “very high.” The European Securities and Markets Authority (ESMA) published its Trends, Risks and Vulnerabilities Report No. 2 for 2015 and its Risk Dashboard No. 3 for 2015. Due to high volatilities and fluctuating performances across asset classes, ESMA raised the market risk indicator to the highest level of “very high.” Among other things, the report noted that the EU investment fund industry saw increased activity in more risky fund types, capital market financing continues to play a limited role in funding the EU economy, and the emergency measures taken to address Greece’s debt situation did not have a critical impact on market functioning outside of Greece. (9/14/2015) ESMA press release.
Regulators feel the pinch of budget cuts. Reuters reported that ESMA, the EBA and the European Insurance and Occupational Pensions Authority (EIOPA) are struggling to implement financial reforms due to budgetary constraints. According to the report, the regulators argue that a lack of sufficient funding for implementing new rules will undermine the financial reforms put in place to avoid a financial crisis and hamper Europe’s ability to contribute to global rulemaking. (9/14/2015) Budget constraints.
Bank of England staff studies dark pools. The Bank of England published a staff working paper on how trading in dark pools affects intraday market quality on the limit order book of the primary exchange for members of the FTSE 100 index. The paper finds that dark trading leads to improved liquidity on the primary exchange, both in absolute terms and relative to trading on the limit order book. Although these relationships differ across stocks of different sizes, dark trading does not lead to worse market quality at the intraday level for either small or large stocks during the sample period. (9/11/2015) Staff working paper.
FCA financial services Register. The FCA has published a new financial services Register. The new Register has one search field to help users find a firm, individual or collective investment scheme by looking up its name, reference number or postcode. (9/7/2015) FCA press release.
FCA Quarterly Consultation. The FCA published Quarterly Consultation Paper No. 10 which proposes minor changes to the FCA Handbook. Comments should be submitted by October 5, 2015. (9/4/2015) Quarterly consultation.
FCA consultation on regulation of investment funds. The FCA is consulting on three sets of proposals relating to the regulation of authorized investment funds. Part I concerns the rules and guidance that would transpose the most recent changes to the Undertakings For The Collective Investment Of Transferable Securities Directive. Comments on Part I should be submitted by November 9, 2015. Part II consults on a set of changes to the FCA Handbook to ensure the EU Regulation introducing European long-term investment funds will operate effectively. Comments on Part II should be submitted by October 5, 2015. Part III would make a number of changes to the Handbook to keep its rules and guidance for authorized investment funds up to date. Comments on Part III should be submitted by December 7, 2015. (9/3/2015) FCA Handbook Changes.
FCA commodities trading thematic review. Following recent changes in the structure of the commodities trading markets, the FCA conducted a thematic review of 12 firms, including brokers, interdealer brokers and commodities trading firms. The review focused on firms trading and broking across the Oil, Energy, Metals and Soft commodities sectors and considered the adequacy of their front office and market abuse controls. The FCA also reviewed the governance arrangements, culture and processes in place in relation to the commodities markets to assess each firm’s ability to manage the impact of these structural changes on their businesses. (9/3/2015) Thematic review.
PRA briefing on senior managers regime. On Friday, October 16, 2015, the UK Prudential Regulation Authority (PRA) will be holding a half-day briefing for professional services firms following the publication of final rules and guidance on the Senior Managers and Certification regimes in the summer. The session will cover the PRA’s requirements and expectations of firms, and what they and the PRA need to do to implement the new regimes from March 7, 2016. The session is aimed at senior partners/executives who have responsibility for, and are currently, giving advice and support to PRA-regulated firms on the new regimes. (9/2/2015) PRA event registration page.
PRA launches new Rulebook website. The PRA has launched a new website for its Rulebook, which contains provisions made by the PRA that apply to PRA-authorized firms. (9/1/2015) PRA Rulebook website.