BANKING ECB to develop service for settlement of instant payments (TIPS) The European Central Bank (ECB) has announced that it will develop a new service, referred to as TARGET instant payment settlement (TIPS), for the settlement of instant payments. The new service, referred to as TARGET instant payment settlement (TIPS), is intended to help facilitate instant money transfers, offered via banks, so that instant retail payments can be made across Europe. It will be available all day and on every day of the year. The service will be developed in close co-operation with the EU banking industry. To encourage take-up, it will be offered to banks at a low price for at least the first two years of operation. The ECB has also published an article on TIPS. The article considers the emergence of instant payments and their challenges, together with the services and benefits that TIPS will offer. TIPS is scheduled to start operating in November 2018. ECB, 22 June 2017 Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 published The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (SI 2017/701) have been published on legislation.gov.uk. A transposition note setting out how the MiFID II Directive (2014/65/EU) is being transposed into UK law, and a final impact assessment (dated 6 February 2017), have also been published alongside the Regulations. The Regulations implement parts of the MiFID II Directive and the Markets in Financial Instruments Regulation (MiFIR). The Regulations were made on 21 June 2017 and laid before Parliament on 22 June 2017. Aspects of the Regulations come into force on three different dates, namely 29 June 2017, 3 July 2017, 31 July 2017, to enable certain specific actions to take place under FSMA, as detailed in Regulation 1. For all other purposes, the Regulations come into force on 3 January 2018. legislation.gov.uk, 22 June 2017 IMF speech at FATF plenary considers shared AML and CFT priorities The Financial Action Task Force (FATF) published a speech by Christine Lagarde, International Monetary Fund (IMF) Chair, on the IMF and FATF working together to combat money laundering and terrorist financing. Ms Lagarde gave her speech at the FATF Plenary on 22 June 2017. She identified the following as three current, shared priorities: Fighting corruption and tax evasion. CFT. Maintaining correspondent banking relationships. FATF, 22 June 2017 New FCA cyber security guide for firms The FCA has published a new guide to the foundations of good cyber security in its June 2017 Regulation round-up. The FCA has designed the guide to help firms, particularly smaller businesses, become more resilient to cyber-attacks and to respond appropriately to cyber incidents. The FCA has seen a significant increase in the number of material cyber incidents reported to it over the last three years: from five incidents in 2014, to 90 incidents in 2016. This trend shows no sign of slowing down. By outlining the foundations of good practice, the FCA hopes the guide will help firms to review their approach to cyber security. More specifically, the guide: Helps firms develop their cyber security strategy by identifying potential areas of strength or weakness. Provides some useful questions to ask about the way firms manage and protect their people, processes and technology. Explains when firms may need to report a cyber-incident, how to report it, and to whom. Sets out how to link with the UK networks for sharing threat information. FCA, 22 June 2017 EBA discussion paper on treatment of structural FX under Article 352(2) of the CRR The EBA has published a discussion paper on the treatment of foreign exchange (FX) positions of a structural nature under Article 352(2) of the Capital Requirements Regulation (CRR). Article 352(2) permits competent authorities to authorise, on an ad hoc basis, the exclusion of FX positions deliberately taken by firms to hedge against the adverse effect of exchange rates on capital ratios where those positions are of a non-trading or structural nature. The EBA has decided to produce own initiative guidelines on the implementation of the Article 352(2) structural FX provision to ensure that there is harmonised EU interpretation and implementation. It comments that the implementation of this provision is "quite uneven" across jurisdictions and that there is a lack of clarity around what constitutes a structural position. The EBA is now seeking views from stakeholders to assist it in its work on the draft guidelines. The deadline for responses is 22 September 2017. EBA, 22 June 2017 BCBS report on range of practices in implementing CCyB policy The Basel Committee on Banking Supervision (BCBS) has issued a report on the range of practices in implementing the countercyclical capital buffer (CCyB) policy. The report details the various national CCyB policy frameworks and operational aspects, underlining the varying discretionary elements of jurisdictions' CCyB policy frameworks and practices. It is based on information from a BCBS survey and a BCBS webpage relating to CCyB decisions. BCBA, 22 June 2017 EBA draft RTS on amendments to CRR RTS on CVA risk The EBA has published its final report on amendments to Commission Delegated Regulation (EU) No 526/2014, which supplements the Capital Requirements Regulation (CRR) and contains regulatory technical standards (RTS) for determining proxy spread and limited smaller portfolios for credit valuation adjustment (CVA) risk. The draft RTS propose limited amendments and aim to further specify cases where alternative approaches can be used for the purposes of identifying an appropriate proxy spread and LGD MKT (that is, the market implied loss given default (LGD) of the counterparty). They have been developed under a mandate set out in Article 383(7) of the CRR. EBA, 22 June 2017 INSURANCE PRA "Dear CEO" letter to insurance firms sets out observations based on feedback from 2017 monitoring-the-market questionnaire The FCA has published a "Dear CEO" letter, from David Rule, PRA Executive Director, Insurance, to insurance firms, setting out observations based on feedback from a recent questionnaire, entitled "monitoring-the-market". The questionnaire was completed, as in 2016, by most London market insurers, including all Lloyd's syndicates. It was also completed, for the first time, by a number of the largest UK commercial insurers. In addition to large commercial insurers outside the London market, the PRA also had responses from a number of European insurers that write significant amounts of commercial or London market business in the UK by means of passporting arrangements. FCA, 22 June 2017 FCA follow-up work on general insurance appointed representatives In its regulatory round-up for June 2017, the FCA provides an update on its follow-up work relating to general insurance appointed representatives. The FCA published a report, in July 2016, setting out the findings of its thematic review (TR16/6) relating to principals and their appointed representatives in the general insurance sector. It has conducted follow-up supervisory work focusing on the London Market insurance intermediaries, which have diversified and developed networks of appointed representatives, as this was identified as a specific risk in TR16/6. The FCA has found that the issues identified in TR16/6 existed in a wider sample of firms in this sector.