The three principal U.K. financial market supervisors have each made significant announcements in the last month-and-a-half.

Last week, the Bank of England published a Consultation Paper on its approach to supervising international banks. The consultation sets out how the Prudential Regulation Authority ("PRA") will supervise U.K. branches of banks based outside the European Economic Area ("EEA") and also explains in more detail the PRA's approach to EEA branches and subsidiaries. For branches from outside the EEA, the framework focuses on two main tests: whether the supervision of the firm in its home state is equivalent to that of the PRA; and whether the PRA has assurance from the home supervisor over the firm's resolution plan in a way that reduces the impact on financial stability in the U.K. In addition, the PRA will determine whether the firm undertakes any critical economic functions in the U.K. Depending on what these are, and their potential impact on U.K. financial stability, the PRA will make a judgment about whether it is content for the firm to operate as a branch in the U.K. This will impact both new and existing branches of non EEA banks. For subsidiaries, the PRA has the same legal powers and follows the same supervisory model as for U.K. Headquartered firms. For branches of EEA banks, the PRA's approach is set out under E.U. law which means that, once CRD IV is fully implemented, the home supervisor is fully responsible for prudential supervision. Comments should be submitted on or before May 27, 2014. PRA Press Release.

The Serious Fraud Office ("SFO"), with the Director of Public Prosecutions, published a joint code of practice on the use of Deferred Prosecution Agreements ("DPA"), which became available to prosecutors on February 24, 2014. As used by the U.K., a DPA is an agreement reached under judicial supervision between the prosecutor and an organization. The agreement allows a prosecution to be suspended for a defined period provided the organization meets certain specified conditions. DPAs will only apply to organizations in cases of economic crime.

The Director of the SFO noted that the most important features of DPAs are the availability of judicial oversight and unequivocal cooperation from the corporate organizations involved. Conditions attached to a DPA may include disgorgement of profits; payment of a fine, compensation for victims and costs; cooperation in any prosecution of individuals; and implementation of a compliance program. SFO Press Release.

Last week, the Financial Conduct Authority ("FCA") published its Commodity Markets Update. The update explains how the FCA will be responding to changes in the commodity derivative markets. The FCA will continue its intensive supervision of trading platforms and regulated entities active in U.K. commodity derivative markets and address the risks identified in the update.

And last Friday, the FCA published new rules for the consumer credit market. Effective April 1, 2014, the new rules would, among other things, require payday lenders and debt management companies to conduct mandatory affordability checks for payday borrowers. In addition, the new rules give the FCA the power to ban misleading advertisements. FCA Press Release.

In a related move the FCA published a consultation paper that would prohibit or restrict EEA authorized payment institutions and electronic money institutions from undertaking certain consumer credit business in the U.K. Comments on the proposal should be submitted on or before March 14, 2014.

At the end of January, the FCA published final rules concerning the distribution of retail investments. The rules ban new referral payments by a discretionary investment manager ("DIM") to an adviser when the adviser recommends that a client places additional money with the same DIM from whom they receive payments following a pre-retail distribution review referral and ban referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them. The new rules are effective December 31, 2014. FCA Press Release.

The FCA has also provided general guidance on how an alternative investment fund manager ("AIFM") should compensate partners and staff. The guidance addresses to which remuneration payments the AIFM Remuneration Code will first apply and the scope of the AIFM Remuneration Code; proportionality; the treatment of payments to partners or members of an AIFM; remuneration in the form of units, shares or other instruments; and minimum retention periods.

The FCA opened a consultation on listing rules and prospectus rules concerning sponsor competence and seeking market views on joint sponsor arrangements. The consultation includes two other proposals, a proposal to remove a Listing Rule requirement for a premium listed issuer to have to prepare a 28-day circular, and a proposal to create new Prospectus Rules that would make an applicant responsible for submitting a compliant and factually accurate prospectus. Comments should be submitted on or before April 30, 2014.