JMLSG consults on revisions to Parts II and III of its AML and CTF guidance

The Joint Money Laundering Steering Group (JMLSG) has published revised versions of Parts II and III of its anti-money laundering (AML) and counter-terrorist financing (CTF) guidance for consultation. They are as follows:

  • A revised version of Part II of its anti-money laundering (AML) and counter-terrorist financing (CTF) guidance (dated 10 May 2017). This Part consists of industry-specific chapters dealing with particular issues faced by a range of sub-sectors of the financial services sector. (It appears that the chapter on electronic money is not yet available for consultation.)
  • A revised version of Part III of its AML and CTF guidance (dated 10 May 2017). This Part sets out specialist guidance on a number of topics.

On a related webpage, the JMLSG explains that it has revised the guidance in line with the proposed Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (which a number of bodies are referring to as the "Money Laundering Regulations 2017"). The proposed 2017 Regulations are designed to transpose the Fourth Money Laundering Directive (MLD4) and the revised Wire Transfer Regulation (revised WTR) in the UK. JMLSG, 9 May 2017 Record of FPC meeting: 27 April 2017

The Financial Policy Committee (FPC) has published a record of a meeting held on 27 April 2017. At the meeting, the FPC discussed the current structure for delivering the UK high value payment system (HVPS), in the context of the broader picture of evolving risks to systemically important financial market infrastructure (FMI). The FPC had received a briefing from the Bank of England (BoE) in March 2017 on the operation of HVPS, and had asked for further information on the financial stability risks arising from it. Since the briefing, the BoE's work on alternative structures had progressed, and the FPC met to review and discuss it. FPC, 9 May 2017 FCA policy statement on appropriate qualification exam standards

The FCA has published a policy statement setting out updated appropriate exam standards (AES) following its review of the qualification standards. The final revised AES are set out in Appendix 2 to PS17/11, and have been published on the FCA's exam standards webpage. The FCA will keep the AES under review to ensure they remain up to date. The standards are aim to ensure that staff working in financial services are appropriately qualified and well regulated, and provides feedback on responses to its consultation CP16/24 'Review of the FCA's appropriate qualification exam standards'.  The final rule changes are set out in Handbook instrument, Training and Competence Sourcebook (Appropriate Qualification Examination Standards) Instrument 2017 (FCA 2017/24). The rule changes take immediate effect. FCA, 9 May 2017 Bank of England's plans for renewed RTGS service

The Bank of England (BoE) has published a report setting out its blueprint for a renewed real-time gross settlement (RTGS) service. RTGS is where banks hold their sterling bank accounts. They can store balances on these accounts or use them to make payments. On an average day, RTGS settles around £500 billion between banks. Given its central role, the BoE recognises that it has to anticipate the demands that could be placed on the RTGS service in the medium term, safeguarding stability while also enabling innovation within a rapidly changing payment ecosystem. The key design features of the renewed RTGS service include:

  • Higher resilience.
  • Broader access.
  • Wider interoperability.
  • Improved user functionality.
  • Strengthened end-to-end risk management.

The BoE's plan is for the majority of the enhanced functionality in RTGS to be live by the end of 2020. Commenting on the blueprint in a related press release, Andrew Hauser, BoE Executive Director for Banking, Payments and Financial Resilience, said that it sets out a vision of a renewed RTGS service that will safeguard financial stability while at the same time enabling innovation. He considers that the reforms will keep the UK at the leading edge globally by increasing resilience, broadening access and expanding functionality. BoE, 9 May 2017

Digital Economy Act 2017: financial services aspects

The Digital Economy Bill has received Royal Assent and the text of the Digital Economy Act 2017 has been published. The Act contains the following provisions that may be particular interest to financial services practitioners and which appear exactly as drafted in the Bill:

  • Section 112 of the Act (clause 85 of the Bill) amends the Financial Services and Markets Act 2000 (FSMA) to give HM Treasury the power to apply the settlement finality regime to payment institutions as participants in payment or securities settlement systems.
  • Section 113 of the Act (clause 86 of the Bill) amends Part 5 of the Banking Act 2009, which relates to the Bank of England's (BoE's) oversight of inter-bank payment systems, to extend its oversight beyond inter-bank payment systems to include other types of payment systems.
  • Section 118 contains commencement provisions for the Act. Section 112 takes immediate effect. Section 113 and Schedule 9 come into force on 28 June 2017 (that is, at the end of the period of two months beginning with the day on which the Act was passed)., 9 May 2017 BIS derivatives statistics show jump in centrally cleared CDSs

The Bank for International Settlements (BIS) has released over-the-counter (OTC) derivatives statistics for the six months ending in December 2016. The figures show the increase in OTC derivatives positions that took place in the first half of 2016 reversed in the second. The notional amount of outstanding OTC derivatives declined from $553trn to $483trn between end-June and end-December 2016. Their gross market value—the cost of replacing all outstanding contracts at current market prices—fell from $21trn to $15trn over the same period. BIS, 9 May 2017 FinTech group appoints ex-Financial Ombudsman CEO as non-exec chair

Innovate Finance, the membership association for the UK’s global FinTech sector, has appointed Natalie Ceeney CBE to the board of the company as non-executive chair, taking over from Alastair Lukies CBE. Innovate Finance said Ms Ceeney has a track record of leading technology-driven change, improving the reach and delivery of products and services to customers. Medium, 8 May 2017 EBA consults on draft RTS on simplified obligations under BRRD

The EBA has published a consultation paper on draft regulatory technical standards (RTS) on simplified obligations under Article 4(6) of the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD). In the consultation paper, the EBA seeks views on draft RTS specifying that authorities should have regard to the criteria by following a two-stage approach:

  • Stage 1. They should select institutions that could potentially benefit from simplified obligations based on a number of quantitative criteria measured on the basis of a set of quantitative indicators.
  • Stage 2. They should verify whether institutions selected as potentially eligible for simplified obligations in stage 1 also meet the qualitative criteria.

The draft RTS also contain a short and exhaustive list of exclusions applicable to the stage 1 assessment. The deadline for responses is 8 August 2017. EBA, 8 May 2017 EBA final draft RTS and ITS on standardised terminology and disclosure documents under Payment Accounts Directive

The EBA has published a report containing the final draft version of regulatory technical standards (RTS) and implementing technical standards (ITS) setting out standardised terminology for services linked to a payment account, standardised formats and common symbol of the fee information document (FID) and the statement of fees (SoF), under Articles 3(4), 4(6) and 5(4) of the Payment Accounts Directive. The annexes to the report contain the:

The EBA is currently translating the standardised terminology into all EU official languages and will make it available by the end of May 2017. The next step is for the RTS and ITS to be submitted to and adopted by the European Commission. Following that, member states will have to integrate the standardised terms into their provisional lists of the most representative services and publish their final national lists. EBA, 5 May 2017 New version of BBA access to banking protocol

British Bankers' Association (BBA) published a new version of its access to banking protocol.

The protocol (or standard, as it is also referred to) will apply to all bank branch closures announced after 1 May 2017 and to any previously announced closures that take place after 1 August 2017. BBA, 5 May 2017


INVESTMENTS AND FUNDS COREPER invited to suggest Council of the EU approves European Parliament's position on MMF Regulation

The Council of the EU has published a note (dated 5 May 2017) from the General Secretariat to the Permanent Representatives Committee (COREPER) on adoption of the draft Regulation on money market funds (MMF Regulation). Among other things, the note refers to the European Parliament having adopted its position at first reading on the MMF Regulation on 5 April 2017. The note explains that as the outcome of the Parliament's vote reflects the compromise agreement reached between the institutions, it should be acceptable to the Council. Council of the EU, 9 May 2017 Launch of the data collection on parent entities in the Global LEI System

The Legal Entity Identifier Regulatory Oversight Committee (LEI ROC) has welcomed the launch on 1 May 2017 of the collection of information on the direct and ultimate parents of legal entities. The data collected has been available since 8 May 2017 on the GLEIF website. LEI ROC, 9 May 2017

Proposed merger of WMA and APFA to create new Investment Management & Financial Advice Association

The Wealth Management Association (WMA) has published a press release announcing a proposed merger with the Association of Professional Financial Advisers (APFA) to become the Investment Management & Financial Advice Association (IMFA). Together, the WMA and APFA will become the Investment Management & Financial Advice Association (IMFA). They consider that, through the merger, they can unlock "further synergies" for the benefit of members, by providing a stronger, united voice that can better lobby on behalf of the combined membership. The combined IMFA membership would represent UK firms offering a range of financial solutions, including investment advice and portfolio management, as well as investment and execution services, financial planning and advice for private clients. WMA, 8 May 2017