BANKING

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.
  • 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

EBA final guidelines on ICT risk assessment under supervisory review and evaluation process

The EBA has published its final guidelines on information and communication technology (ICT) risk assessment under the supervisory review and evaluation process (SREP) required under the CRD IV Directive. The guidelines will apply from 1 January 2018. EBA, 11 May 2017

Corrigendum to revised Delegated Regulation on RTS on key information document on PRIIPs published in OJ

A corrigendum to the text of the revised Commission Delegated Regulation on regulatory technical standards (RTS) on the key information document on PRIIPs has been published in the Official Journal of the EU (OJ). The Delegated Regulation supplements the Regulation on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs) (Regulation 1286/2014) by laying down regulatory technical standards (RTS) regarding the presentation, content, review and revision of KIDs and the conditions for fulfilling the requirement to provide KIDs. It came into force on 2 May 2017 and will apply from 1 January 2018, and Article 14(2) will apply until 31 December 2019. OJ, 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. The FCA is requesting feedback on the changes. Depending on the feedback, it may roll the changes out to the whole of the Handbook. FCA, 11 May 2017

Council of the EU approves plan for consumer role in FS policymaking

A new programme to promote the involvement of consumers in policymaking in financial services has been approved by the Council of the European Union. The programme follows on from moves to restore confidence in the financial sector in the wake of the financial crisis. Council of the EU, 11 May 2017

FCA director discusses regulator’s role in promoting innovation

The executive director of strategy and competition at the Financial Conduct Authority (FCA), Christopher Woolard, has given a speech on how regulators think about competition and regulation, how they approach their competition duties and powers, and how they promote innovation. FCA, 11 May 2017

BBA raises concerns over Brexit and dismantling of Dodd-Frank

The British Bankers’ Association (BBA) has submitted its response to the Treasury Committee’s call for evidence for the first stage of its capital inquiry on recovery and resolution. The BBA submission warns that Brexit may introduce further systemic risk as the global financial landscape adapts to the change, and is likely to impede progress in this area as banks adapt to the loss of pass porting arrangements and other, potentially unforeseen, consequences of exiting the EU. Brexit-driven restructuring of banking businesses could also see firms seeking to operate more complex business models to serve EEA-based clients. BBA, 11 May 2017

Call for submissions for independent review of FRC sanctions

Following its announcement, on 30 March 2017, of an independent review of the sanctions imposed under its enforcement procedures, the Financial Reporting Council (FRC) has now issued a call for submissions and evidence. The deadline for responses is 30 June 2017. FRC, 11 May 2017

European Parliament objects to delegated regulation on MLD4 and calls for roadmap

The European Parliament has objected to a Commission delegated regulation as regards deleting Guyana from, and adding Ethiopia to, the list identifying high-risk third countries with strategic deficiencies on anti-money laundering and countering terrorist financing (AML/CTF). The European Parliament has argued that the Commission should not be bound by Financial Action Task Force (FATF) standards when drawing up its own blacklist, whether that means keeping a third country on its list even if delisted by FATF, or by including additional countries. Responding, the Commission has said that this would require more resources than it has available. European Parliament, 10 May 2017