2024年4月10日
Financial services update – 8 / 59 观点
In this month's update:
On 28 March 2024, the Bank of England and the FCA set out their responses to the phase two industry recommendations of the Transforming Data Collection (TDC) project, a joint initiative of the Bank and the FCA, stemming from the 2021 joint data transformation programme, which addressed issues with data collection.
The recommendations were made by two industry-led committees – the Reporting Transformation Committee and the Data Standards Committee – and focused on four use cases.
In their response, the regulators have confirmed that a number of projects are planned over the next 18 months to enhance data collection, which are designed to achieve five outcomes that support the regulators' vision of getting the data they require at the lowest possible cost.
The outcomes are:
Modern systems to underpin data collection.
Workstreams include a Single Firm Portal that will enable firms to interact with a range of systems such as RegData and Connect, and a Firm Communications Portal for reporting queries.
Changes are also being made to the governance of the TDC. With effect from 2 April 2024, the TDC Advisory Board will be the means by which the Bank and FCA updates industry on the TDC and receives feedback. The Board will establish working groups with industry and will work with the new Industry Data Standards Committee.
For further background on the joint data transformation programme, the phase two use cases and the Industry Data Standards Committee, see our special article.
On 19 March 2024, the FCA published its 2024/25 business plan, outlining how it will deliver the 13 commitments in its April 2022 Strategy to achieve better outcomes for consumers and markets. Key issues it will prioritise include:
Promoting effective competition: the FCA will improve the attractiveness and reach of UK wholesale markets, support firms to invest, innovate and expand through its innovation services, and continue to make it quicker and easier for firms to apply for authorisation.
In the post on the FCA website, Nikhil Rathi, FCA Chief Executive, highlighted that the FCA has already made significant progress in delivering the bold vision set in the 2022 strategy, and remains resolute in supporting the vital role that the financial sector plays in the UK's long-term economic growth. The planned programme of work builds on the progress made in recent years to become a more outcomes-based, assertive and data-led regulator.
On 19 March 2024, the FCA updated the following webpages:
Our approach to international firms sets out what the FCA expects from international firms providing financial services in the UK, or firms preparing to apply for full UK authorisation.
On 15 March 2024, the FCA published a press release announcing that it will conduct a review into firms' treatment of customers in vulnerable circumstances. The FCA will share the findings by the end of 2024.
The review will look at:
the outcomes consumers in vulnerable circumstances receive and whether they’re as good as the outcomes of other consumers.
On 14 March 2024, the FCA published a speech by Nikhil Rathi, FCA Chief Executive. The speech was titled "Investing in outcomes: a regulatory approach to deliver for consumers, markets and competitiveness".
Points of interest include:
On 26 March 2024, the Technology Working Group (TWG) published a report on the second phase of its work in considering the possible use cases of fund tokenisation, building on its November 2023 interim report. The TWG was launched in April 2023 and operates alongside the government's Asset Management Taskforce.
One of the use cases the latest report considers is the role that tokenised funds may play in 'on-chain' investment markets that will enhance back-office functionality. The report also explores how funds may be able to hold tokenised assets in the portfolio.
Phase three of the TWG will focus on the role of artificial intelligence and other technology in the investment management sector.
On 25 March 2024, ESMA published a final report (ESMA18-72330276-1634) on its first set of draft regulatory technical standards (RTS) and implementing technical standards (ITS) under the Regulation on markets in cryptoassets ((EU) 2023/1114) (MiCA).
The report sets out the feedback statements relating to six of the seven draft RTS and ITS on the following topics:
The proposed acquisition of a qualifying holding in a CASP (Article 84(4) of MiCA).
ESMA consulted on the draft RTS and ITS in July 2023. The comments received mostly supported the proposals, but there was a mixed response to the proposal relating to the information that a proposed acquirer would need to provide to the competent authority of a target CASP.
The final report on the draft RTS on conflicts of interest for CASPs (Article 72(5) of MiCA) will be published at a later stage. This will allow the EBA to finish its consultation process and allow ESMA and the EBA to co-operate and ensure maximum alignment.
On 13 March 2024, the EBA published a final report (EBA/RTS/2024/02) on draft regulatory technical standards (RTS) specifying the requirements, templates and procedures for handling complaints under Article 31 of the Regulation on markets in cryptoassets ((EU) 2023/1114) (MiCA or MICAR).
As required under Article 31 of MiCA, the EBA has drafted RTS that specify effective and transparent procedures for the prompt, fair and consistent handling of complaints by holders of asset referenced tokens (ARTs).
The draft RTS:
Specifies procedures to facilitate the handling of complaints between ARTs holders and third-party entities.
On 11 March 2024, the FCA published a statement announcing that it will not object to requests from Recognised Investment Exchanges (RIEs) to create a UK listed market segment for cryptoasset-backed Exchange Traded Notes (cETNs). These products would be available for professional investors, such as investment firms and credit institutions, which are authorised or regulated to operate in financial markets only.
If an RIE creates a new UK listed market segment, it will consider applications on a case-by-case basis for listing cETNs, based on the criteria set out in the Listing Rules. RIEs will need to make sure sufficient controls are in place, to ensure orderly trading and that professional investors are properly protected. Additionally, cETNs must meet all the requirements of the UK Listing Regime.
The 2020 ban on the sale of cETNs to retail consumers remains, since the FCA continues to believe they are not suitable for retail consumers due to the harm they pose. However, it believes RIEs and professional investors are now better able to establish whether cETNs meet their risk appetite, considering the increased insight and data as a result of a longer period of trading history.
On 11 March 2024, HM Treasury launched a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) (MLRs).
One of the themes is "providing clarity on the scope of the MLRs", which covers issues that relate to the boundary of the AML/CTF regulation regime. It considers how best to align registration and change in control (CiC) measures for custodial wallet providers and cryptoasset exchange providers between the FSMA and the MLRs.One issue relates to the authorisation/registration and change in control assessments under FSMA, and how they differ to the MLRs in identifying and assessing the risk associated with controllers of crypto firms. FSMA and MLRs use different definitions to identify control and controllers of crypto firms.
The government seeks views on whether it is appropriate to have two different concepts of control for crypto firms under MLR supervision, depending on whether they are FSMA authorised or not. Subject to the responses, the Consultation proposes aligning the current MLR regime for crypto firms more closely with the FSMA model. This would consequently change the classes of persons who are subject to the fit and proper test as well as the threshold definitions for control. The government intends to make it easier for authorised crypto firms to move into the FSMA regime, as relevant controllers will have already been identified.
The deadline for responses is 9 June 2024.
On 8 March 2024, the EBA published a consultation paper (EBA/CP/2024/09) on draft guidelines on redemption plans under Articles 47 and 55 of the Regulation on markets in cryptoassets ((EU) 2023/1114) (MiCA)).
MiCA requires each issuer of an asset-referenced token (ART) or of an e-money token (EMT) to develop a redemption plan to ensure the orderly redemption of the tokens when the competent authority assess the issue is unable or likely to be unable to fulfil its obligations.
The draft guidelines set out proposed guidance for issuers when drafting their redemption plan and for competent authorities when assessing redemption plans. The guidelines cover:
triggers of a redemption plan.
The consultation closes to comments on 10 June 2024.
On 19 March 2024, the International Association of Insurance Supervisors (IAIS) published its third consultation on climate risk supervisory guidance.
The IAIS is conducting a series of four public consultations on proposed changes to guidance in various Insurance Core Principles (ICPs) and on new supporting material to better incorporate climate risk. The proposed changes are set out in the following documents:
The deadline for response is 19 June 2024.
On 14 March 2024, the Transition Finance Market Review (TFMR) published a call for evidence in which it invited stakeholders, including banks, insurers, assets managers, exchanges and corporates, to respond to questions on the following topics:
building the UK as a global hub for transition finance
The call for evidence is open for submission until 25 April 2024.
On 8 March 2024, the Investment Associate (IA) published a report on insights and suggested actions on the FCA's Task Force on Climate-related Financial Disclosures (TCFD) rules for asset managers. This follows the commencement of reporting obligations of climate-related disclosures under the ESG sourcebook.
The report reviews the key themes emerging from the first round of asset manager reporting in line with the TCFD framework, and sets out the key findings, including challenges faced by firms for their 2023 reports, and some ideas that firms can take away when producing their 2024 report.
Key themes found in entity-level reports include differences in the use of quantitative and qualitative reporting and varied reports on transition planning. A lack of FCA guidance may have resulted in the variation of approaches for product-level reporting, which creates a risk of different levels of disclosure.
Future focus areas for asset managers include being consistent with wider sustainability reporting, consumer testing and usability, and data timing. The IA will use the report to evaluate where further guidance from the FCA might be helpful.
On 28 March 2024, the Bank of England issued a statement on the memorandum of understanding (MoU) between the Bank, the FCA, the PSR and PRA, in relation to payment systems in the UK. Under the Financial Services (Banking Reform) Act 2013, the MoU must be reviewed by the authorities annually. The eighth review was undertaken in 2023.
The authorities have concluded that the MoU continues to function well. Areas for future co-operation and co-ordination identified in 2024 and beyond include:
further improving information and data sharing.
In addition, the authorities will work, as appropriate, with the Treasury as it prepares a National Payments Vision (see below).
On 20 March 2024, Chris Hemsley, Managing Director of the Payment Systems Regulator (PSR), delivered a speech at the PAY360 conference.
Hemsley discussed the development of payments innovation, and how the UK can unlock change and innovation to deliver good outcomes. Despite the progress that has been achieved over the past 25 years, he emphasised how UK payments systems must continue to modernise and change, and the markets they support must continue to develop, promote competition and drive innovation.
The Payment System Operator (PSO) can bring multiple benefits and plays an important role in innovation and change. It can also move more quickly than Pay.UK, therefore, the PSR thinks the UK should build on the model of an independent PSO for the interbank system. This is a system which has worked across the global. Large transformative change has occurred in payment systems which have a strong central coordinating body - Hemsley pointed to UPI in India and PIX in Brazil as examples.
Focusing on the creation of good, open markets, Hemsley highlighted that markets and competition are powerful forces to deliver innovation, but there is an important role for regulatory oversight so markets can work well. The PSR seeks to create new payment markets by expanding Open Banking, however, it understands that participants feel it is intervening too much. It asks the industry to "get on with it" where there is clear consensus, and is exploring how best to proceed in other areas.
On 8 March 2024, HM Treasury published a statement which provides an update on the National Payments Vision.
The Future of Payments Review found that the UK payments landscape is congested and would benefit from a clear overall strategy. The Government is committed to maintaining the UK's reputation as a world-leading payments ecosystem, so has accepted the recommendation to publish a National Payments Vision.
The Vision aims to clarify the government's ambition for UK payments. HM Treasury will carry out a comprehensive programme of engagement on key issues, working closely with trade associations and membership bodies to gather views.
The Vision is intended to be published as soon as possible this year, and it will constitute the government's full response to the Review.
On 5 March 2024, the European Parliament's Economic and Monetary Affairs Committee (ECON) published the following reports relating to the legislative proposals for PSD3 and the PSR:
A report (dated 21 February 2024) on the proposed Directive on payment services and electronic money services in the internal marked (2023/0209(COD)) (PSD3)).
The European Parliament is expected to vote on both texts during the first plenary session in April 2024, to be held on 10 and 11 April 2024. ECON voted to adopt reports in February 2024, as reported in our March 2024 update.
On 5 March 2024, the FCA published its response to a super-complaint raised by the Federation of Small Businesses (FSB) concerning the use of personal guarantees by lenders to support loans to small businesses.
The super-complaint focuses on lending to small and medium-sized enterprises (SMEs), which falls outside of the FCA regulatory perimeter. The FCA's ability to investigate is therefore limited. For lending that falls within its regulatory perimeter, the FCA intends to:
Consider whether lenders need further guidance on applying the rules and guidance within the Consumer Credit sourcebook (CONC) to situations where a personal guarantee is in place.
If its work on lending within the regulatory perimeter identifies areas of potential harm outside the perimeter, the FCA will share any relevant information with the government and parliamentary committees that have an interest in SME finance and business banking.
On 19 March 2024, the PRA published a press release announcing that it will launch the new PRA Rulebook website on 10 April 2024.
The PRA highlighted the following key changes to the website:
The ability to access on a rule-by-rule basis the legal instruments and policy statements that changed a particular rule.
The PRA have migrated all Rulebook content and metadata to the new platform and will finish adding Supervisory Statements (SS) and statements of policy (SoP) by the end of 2024.
On 7 March 2024, the Bank of England (BoE) published a speech by James Benford, BoE Executive Director for Data and Analytics Transformation and Chief Data Officer. The speech covers the steps the BoE is taking to update its data and analytics (D&A) strategy.
The BoE's Independent Evaluation Office (IEO), which was commissioned to evaluate the use of data by the BoE to support its policy objectives, published a report in October 2023 which made ten detailed recommendations. The speech highlights the following as some of the key steps the BoE has taken so far:
agreeing immediate priorities for a data portfolio.
On 29 February 2024, the FCA published a letter from Sheldon Mills, FCA Executive Director, Consumers and Competition, to Michael Gove, Secretary of State for Levelling Up, Housing and Communities (DLUHC). The letter provides an update on the FCA's work on its multi-occupancy building insurance (MOBI).
Points of interest include:
On 15 March 2024, the Joint Committee of the European Supervisory Authorities (ESAs) published an updated version of its Q&As (JC 2023 22) on the key information document (KID) requirements for packaged retail and insurance-based investment products (PRIIPs), as laid down in Commission Delegated Regulation (EU) 2017/653.
Q&As that have been added relate to issues which include:
performance scenarios.
On 7 March 2024, the FCA published the second tranche of the draft UK Listing Rules (UKLR) relating to its reforms to the UK listing regime, which proceeds on the basis set out in CP23/31.
For commercial companies, the second tranche includes:
Dispensations for commercial companies with a sovereign controlling shareholder in relation to admission to listing (UKLR 5), continuing obligations (UKLR 6) and related party transactions (UKLR 8).
Regarding rules applicable to all listed securities, the second tranche includes:
The process for admission to listing, together with rules relating to suspension, cancellation, restoration and transfer between listing categories (UKLR 20 and 21).
Regarding additional listing categories, the second tranche includes rules for:
International commercial companies with a secondary UK listing, including rules for reverse takeovers (UKLR 14).
The deadline for responding to CP23/31 and the first tranche of the UKLR was 22 March 2024, but the FCA accepted consultation submissions in relation to the second tranche material and the consequential changes instrument only until 2 April 2024.
On 1 March 2024, the FCA published a consultation paper in which it seeks feedback alongside the BoE on draft guidance in the form of Q&As on the revised reporting requirements under Article 9 of EMIR (648/2012).
The FCA and BoE published a joint policy statement (PS23/2) on changes to the derivatives reporting framework in February 2023. The new requirements come into effect on 30 September 2024 (subject to a transitional period for certain rules). The FCA and BoE plan to provide Q&As on twelve topics. The first consultation covers the first five:
asset class and product specific
The deadline for comments was 28 March 2024. The FCA will consult on the remaining seven topics later in spring 2024.
On 25 March 2024, the FCA published a new webpage which sets out its findings from a 2023 review of alternative investment fund manager (AIFM) hosting.
AIFMs can use the host model to employ staff on secondment from a third party to help manage the AIF, who carry out regulated tasks or administrative jobs. Sometimes, the AIFM may be a principal firm and the person seconded to the AIFM may come from one of its appointed representatives (ARs).
The FCA found potential harm from:
inadequacies in capital adequacy calculations.
It also found misleading claims from third parties that had seconded staff to an AIFM.
The FCA therefore provides guidance for firms operating the AIFM host model on:
Factoring in the number of AIFs or ARs when calculating their capital requirements.
The FCA has taken action against individual firms where it has seen harm arising from this model, so continues to monitor the secondment arrangement in the AIFM sector closely.
On 21 March 2024, the European Parliament's Economic and Monetary Affairs Committee (ECON) published a press release announcing it had adopted its draft report on the proposed Directive on retail investment protection (2023/0167(COD)).
The proposed Directive will amend:
the AIFM Directive (2011/61/EU) (AIFMD).
ECON also announced the adoption of its draft report on the proposed Regulation, which amends the Regulation on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs) (1286/2014) (PRIIPs Regulation) (2023/0166(COD)).
On 26 March 2024, Directive (EU) 2024/927 was published in the Official Journal of the European Union.
The directive amends the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) and the UCITS Directive (2009/65/EC) relating to delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services, and loan origination by alternative investment funds (AIFs). It enters into force on 15 April 2024.
On 1 March 2024, the FCA published a portfolio letter which provides an interim update on its supervisory strategy for the asset management and alternative portfolios.
The update reflects changes in the external risk environment and work that has been completed since its February 2023 portfolio letter, which was reported on in our March 2023 update. The update sets out the FCA's forward areas of focus for this sector over the next year, which are consistent with the multi-year plan set out previously and are intended to provide clarity on the FCA's areas of regulatory focus for the year ahead.
The following are the FCA's supervisory priorities:
promoting competition and positive change.
Next steps are for CEOs to discuss the letter with their board and executive committee, consider how it applies to their business, and, where necessary, take action.
On 28 March 2024, the Bank of England published a consultation paper, in which it set out the Bank's and the PRA's approach to enforcement and proposed changes to statements of policy and procedure.
The Bank's current approach to enforcement (including the PRA's approach) is found in the Bank of England's approach to enforcement: statements of policy and procedure, which was published in January 2024 (see our March 2024 update).
The proposed changes arise out of FSMA 2023 and Securitisation Regulations 2024. Where possible, the proposed approaches to using these additional enforcement powers follow the Bank’s and the PRA’s approaches in the other contexts in which each has enforcement powers.
The deadline for responses to the proposals is 28 June 2024, and the proposed implementation date for the suggested changes is Q4 2024.
On 18 March 2024, the FCA published the decision notice it issued to Nailesh Teraiya, Chief Executive of Indigo Global Partners Ltd, a brokerage firm.
The FCA states that Mr Teraiya managed Indigo's participation in an equities trading strategy, which took place December 2013 and January 2015, that resulted in claims on the Danish tax authority totalling EUR 91 million. Mr Teraiya was the sole controller and chief executive of Indigo during this period.
The FCA concluded that Mr Teraiya breached Principle 1 of the Statements of Principle for Approved Persons, which requires an approved person to act with integrity, since his conduct was dishonest and lacked integrity. He has also been fined £5.95 million (£5.1 million of which reflects what the FCA considers Mr Teraiya received through third parties for his part in the scheme) and has been banned from carrying out any regulated activity. Mr Teraiya has referred the decision to the Upper Tribunal; therefore, any findings are provisional.
On 1 March 2024, the FCA published its 43rd annual quarterly consultation paper (CP24/3).
The Financial Services and Markets Act 2023 (FSMA 2023) created a new regime for the oversight of critical third parties (CTPs), including new enforcement powers for the FCA, PRA and BoE. The FCA proposes a new Statement of Policy (SoP) which sets out its approach to using its enforcement powers under FSMA 2023. The proposals related to the FCA only and it expects the PRA and BoE to consult on their own enforcement proposals in due course.
The deadline for response was 8 April 2024.
On 1 March 2024, the High Court granted the FCA's application to stay proceedings in a civil case against WealthTek LLP and an individual (together, the defendants) for 12 months.
WealthTek LLP is an FCA-authorised wealth management firm in special administration. The FCA has been carrying out a dual regulatory and criminal investigation into the defendants' affairs since investigators were appointed in March 2023.
The court considered that the FCA's criminal investigation should take priority over the High Court proceedings. This will allow the FCA to make a decision in the 12-month period on whether to bring criminal charges. In a statement, the FCA said it will focus on investigating suspected criminal offences, however the option to restart the civil case remains open.
On 20 March 2024, the Wolfsberg Group published a statement on countering terrorist financing (CTF). It replaces the group's first statement on the suppression of the financing of terrorism, which was published in January 2002.
The statement considers:
the importance of global co-operation.
The group supports the following recommendations of the Financial Action Task Force as measures conducive to countering terrorist financing:
recommendation 8 (measures to prevent the misuse of nonprofit organisations).
On 14 March 2024, the European Commission adopted a Delegated Regulation (C(2024) 1754), which amends the list of high-risk third countries with strategic anti-money laundering (AML) and counter-terrorist financing (CTF) deficiencies produced under Article 9(2) of the Fourth Money Laundering Directive ((EU) 2015/849) (MLD4).
Under Article 9(2) of MLD4, the Commission can adopt delegated acts identifying high-risk third countries. Delegated Regulation (EU) 2016/1675 identifies third countries that have strategic deficiencies in their AML/CTF regimes that pose significant threats to the financial system of the EU. The annex will be amended to:
Add Kenya and Namibia to the table in point I of the annex, as they are considered third countries with strategic deficiencies in their AML/CTF regimes, which pose significant threats to the financial system of the EU.
On 11 March 2024, HM Treasury launched a consultation which aims to improve the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) (MLRs).
The four core themes covered are:
reforming registration requirements for the Trust Registration Service.
The deadline for responses is 9 June 2024.
The answer to last month's question: in Q4 2023, the FCA reviewed 407 financial promotions. 31% were from its proactive monitoring approach.
According to the FCA's 2024/25 Business Plan, how much is the FCA planning to invest in its regulatory work relating to Open Banking/Open Finance: