7 février 2024
Financial services update – 10 de 59 Publications
In this month's update:
On 24 January 2024, the Financial Stability Board (FSB) published a document setting out its work programme for 2024. The annex to the document provides an indicative timeline of the FSB's 2024 planned publications. The FSB's 2024 initiatives include:
Monitoring and evaluating the effectiveness and effects of G20 financial reforms.
The FSB will publish its Annual Report ahead of the G20 Leaders Summit.
On 23 January 2024, a transcript of an oral evidence session held on 17 January 2024 was published. The session was held as part of the House of Commons Treasury Committee's "Sexism in the City" inquiry. The inquiry examines the barriers faced by women in financial services and the progress made in removing gender pay gaps. The topics discussed at the oral evidence session included:
The FCA's whistleblowing pilot scheme, which was launched in September 2023 and provides enhanced feedback to whistleblowers.
On 22 January 2024, the European Securities and Markets Authority (ESMA) published a document setting out its planned consultation papers for 2024, alongside their estimated publication dates. The consultations that are planned for Q1 2024 include:
Call for Evidence on the review of the UCITS Eligible Assets Directive.
The table will be updated by ESMA on a regular basis.
On 10 January 2024, the FCA published its Rule Review Framework on its website. The Framework was developed in line with an obligation introduced by the Financial Services and Markets Act 2023. The Framework outlines how the FCA sets, measures, and monitors the outcomes of its rules. It also explains how the FCA gathers metrics and qualitative intelligence to understand if there are concerns about certain rules and how the FCA would review this if necessary. The Framework covers the following topics:
On 31 January 2024, the FCA updated its webpage on the cryptoasset firm registration process under the Money Laundering Regulations 2017 to include information on pre-application meetings. Firms looking to register may request a pre-application meeting to gain further insight into the requirements and expectations of the FCA when making an application. A pre-application meeting does not guarantee a successful application, but it provides an opportunity to introduce and explain the applying firm's business model. To request a pre-application meeting, an email should be sent to DigitalAssetsPreApp@fca.org.uk along with certain information about the applying firm's business. The webpage sets out what should be included in the request in more detail.
On 29 January 2024, ESMA published a consultation paper on the draft guidelines on reverse solicitation under the Markets in Crypto Assets Regulation ((EU) 2023/1114) (MiCA), alongside a corresponding press release. The consultation paper seeks input on proposed guidance relating to the conditions of application of the reverse solicitation exemption, and the supervision practices that national competent authorities could take to prevent its circumvention. The consultation follows ESMA's October 2023 statement that the provision of cryptoasset services or activities by a third-country firm is strictly limited under MiCA to cases where such service is initiated at the own exclusive initiative of a client (the reverse solicitation exemption).
The consultation closes to comments on 29 April 2024. ESMA aims to publish a final report in Q4 2024.
For more information on this consultation and the reverse solicitation exemption, please see our article.
On 23 January 2024, the FCA published a speech its Chief Executive, Nikhil Rathi, delivered on how "consumer-facing technology can help keep consumer markets honest". Key points from the speech include:
Consumer-facing technology in financial services should be used to boost financial inclusion and security of data and services.
On 23 January 2024, the Bank for International Settlements (BIS) published its Innovation Hub's 2024 work programme. The work programme consists of six new projects, focusing on cyber security, financial crime, central bank digital currencies, and green finance. The BIS has a webpage that sets out the Innovation Hub's ongoing, forthcoming, and concluded projects. The Innovation Hub aims to develop public goods in the technology space to improve the functioning of the financial system.
On 17 January 2024, the Joint Committee of the European Supervisory Authorities (ESAs) published the following four reports on the first set of draft regulatory technical standards (RTS) and draft implementing technical standards (ITS) created under the Regulation on digital operational resilience for the financial sector ((EU) 2022/2554) (DORA):
Another final report covers the draft RTS on the standard templates for the purposes of the register of information in relation to all contractual arrangements on the use of ICT services provided by ICT third-party service providers, as mandated under article 28(9).
The ESAs have submitted the final draft RTS to the European Commission for further scrutiny. The technical standards are expected to apply from 17 January 2025.
On 16 January 2024, the European Banking Authority (EBA) published a final report that includes amending guidelines on customer due diligence, and the factors credit and financial institutions should consider when assessing the money laundering (ML) and terrorist financing (TF) risk associated with individual business relationships and occasional transactions, under articles 17 and 18(4) of the Fourth Money Laundering Directive ((EU) 2015/849). From 30 December 2024, the scope of these guidelines will be extended to apply to cryptoasset service providers (CASPs). This final report follows the EBA's May 2023 consultation on the same topic. The new guidelines provide guidance for credit and financial institutions when entering into business relationships with CASPs established in a third country. The guidelines also explain factors CASPs should consider when assessing risks associated with customer business relationships, and explains mitigating measures CASPs should take in response to risk.
On 23 January 2024, the Network for Greening the Financial System (NGFS) published a technical document explaining the purpose and use cases of the scenarios. The technical document also provides guidance on where institutional adaptations are required in relation to the NGFS scenarios. The NGFS scenarios assist central banks, supervisors, and other financial actors in exploring potential future outcomes of climate change and the transition. The document also sets out answers to frequently asked questions about the scenarios, which will be updated regularly over time.
On 16 January 2024, the FCA announced that it had established an industry-led working group focused on supporting the financial advice sector in advising consumers on products making claims about sustainability. This follows the FCA's November 2023 policy statement on sustainability disclosure requirements and investment labels, which we covered in an article. The FCA will be an active observer of the new working group, and has requested that the working group be ready to report on how the advice sector can be supported in delivering good practice in H2 2024.
On 12 January 2024, the Joint Committee of the ESAs published an updated version of its consolidated Q&As on the Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (SFDR) and on the supplementary Commission Delegated Regulation ((EU) 2022/1288) (SFDR Delegated Regulation). The only amendment made in this version was a minor change to the wording in the first question of section V. For more on the SFDR Q&As, please see our June 2023 update.
On 22 December 2023, the Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards (ESRS) to support the Corporate Sustainability Reporting Directive 2022 ((EU) 2022/2464) (CSRD), was published in the Official Journal of the EU. The Delegated Regulation comprises the first set of EU sustainability reporting standards, and came into force on 1 January 2024. The CSRD requires in-scope companies to disclose information on a broad range of sustainability matters relevant to their businesses, in line with the ESRS. The CSRD requires the European Commission to adopt a second set of ESRS by June 2024, covering sector-specific standards, proportionate standards for listed small to medium-sized enterprises, and standards for non-EU businesses.
On 13 December 2023, the High Court issued a judgment that refused ClientEarth (an environmental NGO) permission to apply for judicial review of the FCA's decision to approve Ithaca Energy plc's (an oil and gas producer) prospectus. The High Court found that it could not be argued that the prospectus failed to properly disclose Ithaca Energy plc's climate-related financial risks, in breach of article 6 and 16 of the UK Prospectus Regulation. An argument that ClientEarth's claim fell within the scope of the Aarhus Convention was also rejected.
On 11 January 2024, the Payment Systems Regulator (PSR) published a consultation paper setting out proposed revisions to Specific Directions 14, 15 and 16. The changes relate to the supply of card-acquiring services, updates the list of directed legal entities, and amend the PSR's method for updating changes in the future. The PSR also proposes to add Checkout Ltd to the list of directed parties under the directions, after it obtained market evidence that Checkout Ltd now falls within the set of most significant providers of card-acquiring services.
The consultation closes to comments on 9 February 2024.
On 16 January 2024, the Competition and Markets Authority (CMA) launched an Invitation to Comment on whether the CMA should launch a review of part 3, article 29 and part 1 of schedule 4 of the Home Credit Market Investigation Order 2007 (Order). The same day, the CMA published a Notice of Suspension of the aforementioned parts of the Order, for an indefinite period while it consults on the potential review. Part 3 of the Order imposes obligations on home credit lenders to provide information to and fund a comparison website for home credit products. Article 29 obliges lenders to highlight the comparison website to customers, and part 1 of schedule 4 contains the prescribed text to do so. Following a reduction in the number of large lenders in the home credit market, the CMA is considering whether the specified obligations remain appropriate.
Comments were accepted until 30 January 2024.
On 11 January 2024, the FCA announced on a webpage that it was undertaking work in the motor finance market. To facilitate this work, the FCA has published a policy statement setting out temporary changes to handling rules for motor finance complaints. The FCA banned discretionary commission arrangements between lenders and brokers in 2021, to remove the incentive for brokers to increase interest rates offered to customers. Recently, the Financial Ombudsman Service (FOS) considered complaints rejected by firms. It found in favour of complainants in two cases, and as a result, anticipates a significant increase in complaints from consumers to firms and to the FOS. The FCA therefore decided to use its section 166 Financial Services and Markets Act 2000 (FSMA) powers to review historical motor finance commission arrangements and sales across several firms to determine a route to consistent, orderly, and efficient remedial action. In the meantime, the FCA has paused the eight-week deadline for motor finance firms to provide a final response to customer complaints concerning discretionary commission arrangements. This pause was introduced with immediate effect, and will end on 25 September 2024.
On 19 December 2023, the High Court issued a judgment finding that claims brought under section 138D FSMA were statute-barred. The case clarifies that the six-year limitation period under section 14A Limitation Act 1980 does not apply to claims for breach of statutory duty under section 138D FSMA, as these would not be "an action for damages for negligence within the meaning of section 14A". Instead, an ordinary six-year limitation period applies.
On 11 January 2024, HM Treasury published a consultation paper setting out the government's proposals on enhancing the UK's special resolution regime, by providing a new mechanism to facilitate the use of certain existing stabilisation powers to manage the failure of small banks and limit risks to public funds. Annex A of the paper sets out a deployment diagram, which is an overview of how the new mechanism would work.
The consultation closes to comments on 7 March 2024.
On 11 January 2024, the Prudential Regulation Authority (PRA) published a Dear CEO letter it sent to PRA-regulated international banks and designated investment firms active in the UK. The letter sets out the PRA's supervisory priorities for 2024. Key points from the letter include:
The PRA will continue to work on its long-term reforms to the way it collects data as part of the Transforming Data Collection Programme, and the Banking Data Review.
On 11 January 2024, the PRA published a Dear CEO letter it sent to UK deposit takers, which sets out the PRA's 2024 supervisory priorities. The letter is intended to complement firms' specific feedback from their most recent Periodic Summary Meeting. Key points from the letter include:
The PRA notes that the largest firms will be subject to the Resolvability Assessment Framework cycle 2 in 2024.
On 11 January 2024, the PRA published a Dear CEO letter it sent to insurance firms outlining its 2024 supervisory priorities. Key points from the letter include:
On 22 January 2024, the Official Journal of the EU published Commission Delegated Regulation (EU) 2024/358 on RTS on requirements for crowdfunding service providers under the Regulation on European crowdfunding service providers for business ((EU) 2020/1503) (ECSPR). The RTS were created under a mandate created by article 19(7) of the ECSPR.
The Delegated Regulation will apply from 11 February 2024.
On 15 January 2024, the FCA published a portfolio letter setting out its expectations for loan-based peer-to-peer lending (P2P) platforms. The letter outlines the harms to consumers and markets that are most likely to arise from P2P businesses, and explains the FCA's strategy to address those harms. P2P firms should ensure they are mitigating risk in relation to:
The Consumer Duty. Firms should ensure that they are delivering good outcomes for consumers in relation to consumer understanding, products and services, price and value, and consumer support.
On 15 January 2024, the FCA published a portfolio letter setting out its expectations for investment-based crowdfunding platforms. The letter outlines the potential harms to consumers and markets that can arise from crowdfunding businesses. Crowdfunding firms should ensure they are complying with the FCA's expectations in relation to:
On 10 January 2024, ESMA announced that it had published its first analysis exploring the current exposures in EU securities markets and the asset management sector to the increasing levels of risk in real estate markets. The document sets out the details of the evolution of the real estate sector over the last five years. The analysis broadly suggests that there have been elevated levels of debt in the real estate sector with wider risk implications from non-bank financial market players. Interest rate risk is expected to continue to shape real estate market exposures. Liquidity mismatches are also identified as a key vulnerability for real estate investment funds. The document concludes that real estate market conditions will likely remain challenging.
On 30 January 2024, the PRA announced that it had issued a £57,417,500 fine to HSBC Bank plc and HSBC UK Bank plc (the Firms) for failures in deposit protection identification and notification under the Depositor Protection Rules. The PRA found that the Firms, over a number of years, failed to accurately identify deposits that were eligible for protection under the Financial Services Compensation Scheme. The Firms cooperated throughout the PRA's investigation, made early admissions, and agreed to resolve the matter. The Firms were therefore eligible for a fine reduction totalling 45%.
On 22 December 2023, the EBA published a consultation on two sets of guidelines on internal policies, procedures, and controls to ensure the implementation of EU and national restrictive measures. The first set of draft guidelines concerns financial institutions and prudential supervisors. It sets regulatory expectations regarding the role of senior management, internal governance, and risk management in the restrictive measures context. The second set of draft guidelines concerns payment service providers (PSPs) and CASPs. This set specifies what PSPs and CASPs should do to comply with the restrictive measures when transferring funds or cryptoassets.
The consultation closes to comments on 25 March 2024. The EBA is holding a virtual public hearing on 8 February 2024 on the proposals, which is now closed for registration.
The answer to last month's question: According to the recently published Treasury Committee report on a digital pound, electronic deposits held with commercial banks represent 95% of the money held by households and businesses.
The FCA recently released a policy statement on temporary changes to handling rules for motor finance complaints. According to this policy statement, based on data received from major motor finance lenders, what percentage of motor finance commission complaints were rejected between January 2019 and the end of June 2023?
7 November 2024
par plusieurs auteurs
1 December 2022
2 November 2022
7 October 2022
1 September 2022
4 August 2022
11 July 2022
7 April 2022
3 March 2022
3 February 2022
13 January 2022
2 December 2021
4 November 2021
7 October 2021
20 September 2021
5 August 2021
1 April 2021
4 March 2021
par plusieurs auteurs