BANKING LSB business plan for 2017/20

In the business plan, the LSB provides details on how it plans to achieve its "2020 Vision". It notes that the three-year time horizon covered by the plan is challenging. However, the LSB believes that it has a unique role in setting high standards that complement the FCA's work, covering areas that the statutory protections do not reach. It explains that the business plan is more than a mere continuation of the last three-year plan, as the LSB seeks to make a stepped change in its development. LSB, 13 July 2017

FCA consults on draft authorisation and reporting forms as part of PSD2 implementation

The FCA has published a consultation paper on draft authorisation and reporting forms as part of its implementation of the revised Directive on payment services in the internal market ((EU) 2015/2366) (PSD2) (CP17/22). FCA, 13 July 2017

 

BSB consults on draft guidance to help firms assess fitness and propriety of staff under certification regime

The Banking Standards Board (BSB) has published a consultation paper on draft guidance on certification risks and issues. The aim of the proposed guidance is to help firms to identify and deal with risks and issues when assessing the fitness and propriety (F&P) of their staff, as required by the certification regime. The draft guidance has been produced with the assistance of the BSB's certification regime working group (CRWG). This group, which was set up in early 2016, enables member firms to learn from each other about implementation of the certification regime, and identify areas where a consistent approach could be beneficial. BSB, 13 July 2017

House of Lords Secondary Legislation Scrutiny Committee raises concerns about lack of effective Parliamentary scrutiny of regulations that implemented MLD4

The House of Lords Secondary Legislation Scrutiny Committee has published its second report of session 2017-19. Among other things, in the report the committee refers to the three regulations that recently transposed the Fourth Money Laundering Directive ((EU) 2015/849) (MLD4). That is, the:

  • Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) (2017 MLRs).
  • Information about People with Significant Control (Amendment) Regulations 2017 (SI 2017/693).
  • Scottish Partnerships (Register of People with Significant Control) Regulations 2017 (SI 2017/694).

House of Lords, 13 July 2017

FSCS annual report and accounts and class statements for 2016/17

The Financial Services Compensation Scheme (FSCS) has published its annual report and accounts for 2016/17. he report outlines (among other things) some of the key figures and events of the 2016/17 period and the FSCS' strategy and performance over the past year.

Alongside the annual report, the FSCS has published its annual report class statements for 2016/17 setting out its compensation costs, recoveries and levies. In the past, this statement was included in the annual report and is being published separately to aid transparency for the benefit of FSCS levy payers. FSCS, 13 July 2017

EBA report on results from second EBA impact assessment of IFRS 9

The EBA has published a report setting out the results from the second EBA impact assessment of IFRS 9. n summary, the report shows:

  • Qualitative results. Banks have made further progress on the implementation of IFRS 9 since the first exercise, but smaller banks are still lagging behind in their preparation compared with larger banks. The report also confirms that banks have reduced their plans for parallel runs of IFRS 9 and IAS 39. Banks will use various data, processes and models to estimate expected credit losses. This may affect comparability among banks which means that disclosures will be key.
  • Quantitative results. The estimated impact of IFRS 9 is mainly driven by IFRS 9 impairment requirements. The estimated increase of provisions is on average 13% compared to the current levels of provisions under IAS 39. The common equity tier 1 (CET1) ratios are expected to decrease on average by up to 45 basis points. Smaller banks, which mainly use the standardised approach (SA) for measuring credit risk, estimated a larger impact on own funds ratios than larger banks of the sample.

EBA, 13 July 2017

 

INVESTMENTS AND FUNDS

ESMA produces more detailed opinions to support supervisory convergence in EU27 in context of UK withdrawing from EU

ESMA has published three opinions to support supervisory convergence in the context of the UK leaving the EU:

  • Opinion on investment firms (ESMA35-43-762). This opinion addresses regulatory and supervisory arbitrage risks related to the relocation of investment firms' activities. It is based on the framework under the Markets in Financial Instruments Directive (2004/39/EC) (MiFID) and the MiFID II Directive (2014/65/EU).
  • Opinion on investment management (ESMA34-45-344). This opinion addresses regulatory and supervisory arbitrage risks related to the relocation activities of UCITS management companies, self-managed investment companies and authorised alternative investment fund managers (AIFMs). It is based on the framework under the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) and the UCITS IV Directive (2009/65/EC).
  • Opinion on secondary markets (ESMA70-154-270). This opinion addresses regulatory and supervisory arbitrage risks stemming from third country trading venues (that is, regulated markets, multilateral trading facilities (MTFs) and organised trading facilities (OFTs)) relocating to the EU27 and seeking to outsource activities to their jurisdiction of origin. It is based on the outsourcing requirements in Article 13 of MiFID and Articles 16 and 48 of the MiFID II Directive.

In the opinions, ESMA has assumed that the UK will become a third country after its withdrawal from the EU. However, the opinions are without prejudice to any specific arrangements that may be agreed between the UK and the EU27, and to any future ESMA opinions or other convergence tools. In a related press release, ESMA explains that the opinions set out sector-specific principles, and build on the general cross-sectoral opinion that ESMA published in May 2017

ESMA, 13 July 2017

ESMA consults on guidelines on MiFID II suitability requirements

ESMA has published a consultation paper (ESMA35-43-748) on guidelines on certain aspects of the suitability requirements under the MiFID II Directive (2014/65/EU). ESMA, 13 July 2017