BANKING

FCA policy statement on Handbook changes to reflect Lifetime ISA introduction

The FCA has published a policy statement on Handbook changes to reflect the introduction of the Lifetime ISA (LISA). The LISA is intended to allow individuals aged between 18 and 40 to save or invest flexibly to provide for a deposit for a first home or to save for retirement. It will be available to investors from 6 April 2017. Appendix 1 to the statement includes the final version of the Conduct of Business and Client Assets (Lifetime Individual savings account) Instrument 2017.

FCA, 7 March 2017

International Trade Committee report on UK international trade after Brexit

The House of Commons International Trade Committee (ITC) has published a report on UK international trade after Brexit. This report considers the UK's relationship with the World Trade Organization (WTO), the free trade agreement (FTA) which the government intends to agree with the EU, the implications of the UK trading with the EU under WTO rules in the absence of any agreement, and the UK's future trading relationship with non-EU countries. Paragraphs 80 to 92 of the report consider the potential future framework for UK-EU trade in financial services. The Committee calls on the government to:

  • Set out the likely consequences of trading with the EU under WTO rules, and ensure it makes contingency plans for that eventuality.
  • Clarify what it means when it says that it does not want a customs union with the EU but is looking for a "customs arrangement".
  • Clarify how far it can proceed towards concluding FTAs with non-EU countries while the UK is still an EU member.
  • Publish a White Paper about the possibility of the UK re-joining the European Free Trade Association (EFTA).

ITC, 7 March 2017

Regulatory references regime comes into force

From 7 March 2017, the FCA rules regarding regulatory references for Senior Managers and staff in the Senior Managers and Certification Regime (SMCR) will come into force, the FCA has announced. The rules have been introduced exactly one year after the SMCR came into force. The SMCR applies to staff in roles that can cause ‘significant harm’ to either the firm or its customers. This includes, for example, investment and mortgage advisers. The deadline for firms to have issued certificates for staff in the SMCR was also 7 March 2017. This was also the day on which the Conduct Rules, which have applied to Senior Managers and staff in the SMCR for a year, began to apply to all other staff, apart from those undertaking purely ancillary functions, such as security staff.

FCA, 7 March 2017

Draft Regulation seeks to involve consumers in EU financial services policy

In ‘I’ Item Note 6968/17, the Council of the European Union has released the final compromise text for a proposal for a Regulation of the European Parliament and of the Council on establishing a Union Programme to support specific activities enhancing the involvement of consumers and other financial services end-users in the Union policy making for the 2017-2020 period. The final compromise text is set out in the Annex to the Note. The Permanent Representatives Committee is invited to approve the final compromise text and the Council to approve the European Parliament’s position.

Council of the European Union, 7 March 2017

Treasury Committee hears evidence from BoE

The Treasury Committee has questioned the Court of Directors of the Bank of England as part of the Committee's remit to scrutinise the management of the Bank. The Committee heard evidence from the chair of the Court of the BoE, Anthony Habgood, and the deputy chair, Bradley Fried.

Treasury Committee, 7 March 2017

SMSG and BSG respond to management suitability draft guidelines

The European Securities and Markets Authority (ESMA) Securities and Markets Stakeholders Group (SMSG) and the European Banking Authority (EBA) Banking Stakeholders Group (BSG) have issued a joint statement and advice in response to the joint ESMA and EBA guidelines on the assessment of the suitability of members of the management body and key function holders under Directive 2013/36/EU and Directive 2014/65/EU. The response warns that the draft guidelines may be too onerous for smaller institutions and subsidiaries.

ESMA & EBA, 7 March 2017

BIS highlights international banking trends

Growth in international bank claims resumed in the second and third quarters of 2016, following declines in late 2015 and early 2016, according to the latest quarterly review by the Bank for International Settlements (BIS), which focusses on developments in international banking and financial markets. The BIS quarterly review for March 2017 includes an overview of international banking and financial market developments, as well as special features and updated statistical data.

BIS, 7 March 2017

BIS publishes latest statistics

An extensive overview of the statistics published by the Bank for International Settlements (BIS) has been published in the BIS Statistical Bulletin for March 2017. The statistics are compiled in cooperation with central banks and other national authorities. They aim to inform analysis of financial stability, international monetary spill overs and global liquidity. The BIS Statistical Bulletin for March 2017 covers:

  • locational banking statistics
  • consolidated banking statistics
  • debt securities statistics
  • derivatives statistics
  • global liquidity indicators
  • credit to the non-financial sector
  • debt service ratios for the private non-financial sector
  • property price statistics
  • effective exchange rate statistics
  • credit-to-GDP gaps
  • consumer prices

BIS, 7 March 2017

ESMA holds third Financial Innovation Day for regulators

ESMA has published details of its third Financial Innovation Day for regulators, held on 10 February 2017. The day saw panels discuss:

  • the future of FinTech and its regulatory and market challenges
  • Artificial Intelligence and Big Data in the financial sectors
  • can distributed ledger technology reshape securities markets infrastructures?
  • how can Fintech improve the consumer experience?

ESMA’s chair, Steven Maijoor, closed the day with reflections on the discussions and the role of regulators in Fintech developments.

ESMA, 7 March 2017

INSURANCE

PRA to set out insurance supervision policy

The Bank of England (BoE), in collaboration with the London Business School, is hosting an event on 20 March 2017 where it will set out the approach of the Prudential Regulation Authority (PRA) to supervising insurers. The deputy governor of the BoE and chief executive of the PRA, Sam Woods, will deliver a speech on PRA policy approaches. The event will also mark the launch of a report from the BoE’s Independent Evaluation Office on the PRA’s approach to its insurance objective, focusing on how it is interpreted, implemented and communicated.

London Business School, 7 March 2017

EIOPA updates technical information on symmetric adjustment of the equity capital charge for Solvency II

EIOPA has published the technical information on the symmetric adjustment of the equity capital charge for Solvency II with reference to the end of February 2017. The information contained in the technical information is compulsory information to be applied now by EU insurance and reinsurance undertakings, as Solvency II entered into force on 1 January 2016.

EIOPA, 7 March 2017

Business and charity groups call on Government to scrap planned rise in Insurance Premium Tax

ABI has joined forces with business, finance and charity groups in an open letter calling on the Government to cancel the planned increase in Insurance Premium Tax (IPT) in June, and to freeze it for the remainder of this Parliament. Since November 2015 three successive Government rises will have doubled the rate of IPT by June this year from 6% to 12%. IPT affects more than 50 million policies and applies to policies purchased by businesses, charities and individuals. Taken together, the three increases will raise over £13 billion for the Government over five years.

ABI, 7 March 2017