BANKING

EBA publishes responses to recovery and resolution planning consultation

The European Banking Authority (EBA) has published the feedback it received on its consultation on draft regulatory technical standards (RTS) further specifying the eligibility criteria to determine whether institutions should be subject to simplified obligations when drafting their recovery and resolution plans. The EBA received seven responses, plus an opinion from its Banking Stakeholder Group, which ‘wholeheartedly supports’ the concept of simplified obligations for less systemically important banks. The draft RTS propose that authorities conduct a two-stage eligibility assessment for determining whether an institution is eligible for simplified obligations. Competent and resolution authorities may apply simplified obligations if they determine that an institution's failure would not be likely to have a significant negative effect on financial markets, on other institutions, on funding conditions, or on the wider economy.

EBA, 30 August 2017

DBEIS asks FCA, FRC and Insolvency Service to clarify corporate governance powers

The Department for Business, Energy & Industrial Strategy has responded to the feedback it received on its November 2016 proposals to strengthen the UK’s corporate governance. The government says that, during the consultation, questions were raised as to whether the Financial Reporting Council (FRC) had the powers, resources and status to undertake its functions effectively. To address this the government will ask the FRC, the Financial Conduct Authority and the Insolvency Service to conclude new or, in some cases, revised letters of understanding with each other before the end of 2017 to ensure the most effective use of their existing powers to sanction directors and ensure the integrity of corporate governance reporting. They have also released a press release.

DBEIS, 30 August 2017

Citizens Advice calls for a ban on raising credit limits for those already in debt

The Citizens Advice charity has called for a ban on credit card companies raising limits on credit cards of those who are in debt without their approval. This follows the charities ‘Stuck in Debt’ report which found that 18% of people who are in debt have had their limits raised without their knowledge—6% more compared with all credit card holders. The report, which surveyed approximately 2,116 people, also found:

  • £67bn of the £200bn rise in consumer borrowing is on credit cards
  • Individuals who have credit card debt were more likely to suffer from long term debt in comparison to those with personal loans
  • On average those struggling with credit card debt were 12% less likely to reduce it over two years in comparison to those with personal loans.

In addition to banning firms from raising peoples credit limits without their consent, the Citizens Advice charity is calling for additional changes to ensure people are protected from falling into long term credit card debt. For example, they are calling for clearer guidance from the FCA, ensuring that before increasing a borrower’s limit, lenders must check their ability to pay it

Citizens Advice, 30 August 2017

INSURANCE

IAIS reports on observance of ICPs 13 and 24

The International Association of Insurance Supervisors (IAIS) has published the report from the team conducting the self-assessment and peer review (SAPR) of levels of observance of Insurance Core Principles (ICPs) 13 and 24 by insurance supervisors. The IAIS identifies implementation of the ICPs by insurance supervisors as one of its strategic priorities. The IAIS says that determining the observance level of the ICPs and, as a result, identifying gaps in implementation and observance of the ICPs is the critical first step for implementation. The SAPR programme assesses current levels of observance of the ICPs, taking into account regulatory frameworks and supervisory practices, and contributes to strengthening the observance and understanding of the ICPs.

IAIS, 30 August 2017

IAIS and A2ii report on supervisory capacity building and development needs

The International Association of Insurance Supervisors (IAIS) has published a report, produced jointly with Access to Insurance Initiative (A2ii), on the findings from its supervisory capacity building and development needs survey. The report was prepared by the IAIS implementation committee in co-operation with the Access to Insurance Initiative (A2ii).

IAIS, 30 August 2017

INVESTMENTS AND FUNDS

FCA webpage lists position limits for MiFID II commodity derivative contracts

The Financial Conduct Authority (FCA) has published a webpage listing the commodity derivative contracts that it has currently identified as trading on a UK trading venue which, from 3 January 2018, will have a bespoke position limit set against them. Under MIFID II all commodity derivatives will be subject to position limits. For new and illiquid contracts the limit will be 2,500 lots from 3 January 2018. For other contracts the FCA will set a position limit, as listed on the webpage. The list of contracts will be updated on a regular basis to reflect contracts traded on platforms which are applying to the FCA for authorisation as a trading venue. FCA, 30 August 2017