By: Joseph Skilton, Michael Ruck, Rosie Naylor
The FCA has assessed and reported on the sanctions controls of over 90 financial service firms from a range of sectors including wealth management.
Read MoreBy Robert Lloyd and Philip Morgan
On 27 June 2023, the UK and the EU Commission entered into a memorandum of understanding (MoU) on regulatory cooperation in financial services triggered, it seems, by the agreement of revised arrangements on Northern Ireland. You could be forgiven for thinking that the MoU was agreed a long time ago – accordingly to a nonbinding joint declaration between the EU and the UK, the targeted date was 31 March 2021. At the end of the Brexit transition period on 31 December 2020 few people would have expected that it would take the best part of two and a half years to reach this modest objective.
Read MoreThousands of advertisements for cryptoasset-related products were displayed on London public transport, including the underground network, in 2021. There has been a drop-off since the Advertising Standards Authority (“ASA”) issued standards for crypto adverts. Nonetheless, in 2022 there were reportedly adverts for 24 crypto products on London public transport. Now, however, legislation seems likely to end much of this public advertisement of crypto in the UK.
Read MoreBy Philip Morgan and Zainab Kuku
Responding to encouragement from both the FCA and IOSCO, HM Treasury has proposed regulating ESG ratings providers in a consultation paper dated 30 March 2023. It primarily aims to improve the transparency of the methodologies and governance objectives adopted by ESG ratings providers, as well as to mitigate risks arising from conflicts of interest where the rating provider also provides other services to the rated entity.
Read MoreBy Michael Ruck and Aurelija Grubytė
HM Treasury and the FCA have completed their joint review of the criminal market abuse regime, and published a joint statement on 24 March 2023. Their observations are relevant to both the criminal and civil market abuse regimes in the UK. Most notably:
Read MoreThe FCA, PRA and UK Government are looking for feedback by 1 June 2023 to guide potential changes to the Senior Managers and Certification Regime (SMCR), the UK’s regime designed to improve individual accountability and conduct standards of (mostly) senior personnel in financial services firms. To this end, the FCA and PRA jointly published a discussion paper on 30 March and HM Treasury published a call for evidence.
Read MoreBy Zainab Kuku
The FCA did not hold back in its most recent comments to ESG benchmark administrators, in an indication of its increasingly adversarial approach to ‘greenwashing’. It described the quality of disclosures of ESG factors considered in benchmark methodologies as ‘poor’, and aimed clear warning shots at administrators who fail to comply with the FCA’s feedback.
Read MoreBy Kai Zhang and Philip Morgan
On 1 February, the UK Government published another consultation paper on the proposed regulation of business relating to cryptoassets in the UK. This is to seek views (by 30 April 2023) on the overall approach and policy direction, and includes a call for evidence to gather more pertinent information on decentralised finance. As such, the consultation does not contain details on any specific proposed rules. For example, the proposed cryptoasset-related regulated activities described in the consultation paper are stated to be illustrative of the sorts of activities the Government intends to regulate, rather than specific proposals. For further information on this consultation please see our fintech blog here.
One of the UK FCA’s favoured ways of regulating is through “Dear CEO” letters, which seek to place a direct onus on CEOs to address FCA priorities. On 3 February 2023, CEOs of UK asset management firms were the recipients of one such letter. Much of the content is not surprising (e.g. the emphasis on consumer outcomes) but we highlight here some particularly notable points:
Read MoreBy Andrew Massey and Robert Lloyd
With effect from 31 July 2023*, a new Consumer Duty will require firms conducting regulated activities in the UK to act to deliver good outcomes for retail customers. The FCA has conducted a review of the implementation plans of a number of larger firms, and published its findings on 25 January 2023.
Although pertaining to larger firms, the findings – particularly the examples of good practice and areas for improvement – are intended to be “useful” for all firms preparing for the Duty. The underlying concern identified by the FCA is the risk that firms may not be ready in time, or may struggle to embed the Duty effectively throughout their business.
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