PS07/1: Integrated Regulatory Reporting (IRR): Certain investment firms

The FSA has published Policy Statement 07/1, Integrated Regulatory Reporting (IRR): Certain investment firms (PS07/1). PS07/1 provides feedback on respondents’ comments on Parts II and III of FSA Consultation Paper 06/11, Integrated Regulatory Reporting (IRR): Credit institutions and certain investment firms (CP06/11).

Part II of CP06/11 covered financial reporting proposals for investment firms not affected by the Capital Requirements Directive and non-financial reporting for any firm carrying on investment activities (excluding retail investment activities). Part III of CP06/11 covered auditors’ reports for certain investment firms and consistency review.

PS07/1 also provides feedback on the responses to the two questions in Chapter 2 of CP06/11 on reporting currencies and publishing aggregated data that applied to all firms impacted by CP06/11. Also, in Annex 1 of PS07/1, the FSA has reproduced and updated the ‘Road Map’ from CP06/11 to assist firms in identifying whether they are impacted by PS07/1 and what chapters apply to them. Policy Statement 06/10, published in October 2006, provided feedback and finalised policy for Part I of CP06/11.

PS07/2: Implementing the Markets in Financial Instruments Directive (MiFID)

The FSA has published Policy Statement 07/2: Implementing the Markets in Financial Instruments Directive (MiFID) (PS07/2). PS07/2 provides feedback on issues related to the transposition of the Markets in Financial Instruments Directive (MiFID) raised by respondents to FSA Consultation Paper 06/14: Implementing MiFID for Firms and Markets, FSA Consultation Paper 06/19: Reforming Conduct of Business Regulation and FSA Consultation Paper 06/20: Financial Promotion and Other Communications. 

PS07/3: Reforming the Approved Persons Regime

The FSA has published Policy Statement 07/3: Reforming the Approved Persons Regime (PS07/3). PS07/3 focuses on that part of FSA Consultation Paper 06/15: Reforming the Approved Persons Regime that relates to the Markets in Financial Instruments Directive and its impact on the Approved Persons Regime. PS07/3 sets out the FSA’s approach to the Approved Persons Regime following MiFID’s implementation on 1 November 2007 and final FSA Handbook text. In PS07/3 the FSA also advises that it will issue a Policy Statement on its proposal to merge the customer functions (CFs 21-27) into one generic controlled function in February 2007.

FSA publishes MiFID Article 4 notifications to the European Commission

The scope for Member States to apply additional requirements in certain of the areas covered by the Markets in Financial Instruments Directive (MiFID) is covered by Article 4 of the Level 2 Directive. This Article provides for the conditions for creating and retaining national requirements that go beyond MiFID and requires that these be notified and justified to the European Commission.

In Consultation Paper 06/19, Reforming Conduct of Business Regulation the FSA advised that they were proposing to retain certain requirements in a small number of areas that would require notification to the European Commission under Article 4.

The FSA has now published its Article 4 notifications which are:

  • Justification for retention of the FSA's requirements on the apportionment of responsibilities.
  • Notification and justification for retention of the FSA's requirements on the content of confirmation and periodic statements.
  • Notification and justification for retention of certain requirements relating to the market for packaged products.
  • Notification and justification for retention of the FSA's requirements on the use of dealing commissions.

The FSA will provide feedback on the responses to its notifications in the NEWCOB Policy Statement which the FSA intends to publish in the second quarter of 2007. In addition, a number of the proposed rules covered by the notifications will, if made, be the subject of further policy review during 2007 and 2008. The FSA will provide updates on developments throughout the process.

Inter-institutional Monitoring Group proposes improvements to the development of financial services regulation

The European Commission’s Inter-institutional Monitoring Group (IIMG) has published its second interim report on the Lamfalussy process. The second interim report provides some preliminary recommendations to improve what IIMG believes to have been, overall, a successful process. In particular, IIMG calls for regulatory self-restraint at all levels of the Lamfalussy process. It also believes that the choice between Directives and Regulations is not straightforward and suggests some guiding principles to choose between the two instruments. The second interim report is open for public consultation until 26 March 2007. 

Exchange of views on the Internal Market

On 30 January 2007, Charlie McCreevy (European Commissioner for Internal Market and Services) gave a speech at the European Parliament ECON Committee where he discussed EU-US cooperation in financial markets. Mr McCreevy then discussed some European policy issues, being the Payment Services Directive, supervision of the financial sector and retail financial services.

FSA Investigations & Enforcement 2007 : A Practitioner's Guide for Regulated Firms

The FSA has published the speech that Margaret Cole (Director of Enforcement, FSA) gave at the City and Financial Conference on 24 January 2007. In her speech Mrs Cole discussed the FSA’s philosophy behind enforcement activity, the use of enforcement to change behaviour in the interests of accomplishing the FSA's overall strategic agenda and the way the FSA's Enforcement Division goes about its business.

Statutory Instruments

The Financial Services (EEA State) Regulations 2007 (the Regulations) were laid before Parliament on 23 January 2007 and come into force on 13 February 2007. The Regulations amend the definition of ‘EEA State’ in paragraph 8 of Schedule 3 to the Financial Services and Markets Act 2000 so that Bulgaria and Romania are included. Bulgaria and Romania became European Community Member States on 1 January 2007. The Regulations also amend in the same way the definition of ‘EEA State’ in various other Statutory Instruments.

On 31 January 2007 HM Treasury published two Statutory Instruments. The first is the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 No. 3384. The second is the Financial Services and Markets Act 2000 (Exemption) (Amendment) Order 2007 No. 125. Both Statutory Instruments are part of a broad range of Statutory Instruments that have been prepared by HM Treasury for the implementation of the Markets in Financial Instruments Directive.

Final Notice - GE Capital Bank

The FSA has published its Final Notice in relation to imposing a fine on GE Capital Bank Ltd for failing to have adequate systems and controls for selling insurance which included Payment Protection Insurance and for failing to treat its customers fairly.