UK Edition - September 2018
The FCA has collaborated with the Chartered Insurance Institute (CII) to create a re-assessment test of the level 4 Diploma in Financial Planning. The re-evaluation will be available from 1 October 2018 and aims to raise the standards and competence of financial advisers.
The FCA states that while there is no requirement for advisors to periodically sit such a test, it will encourage firms to use it and may also use it as a supervisory tool if the regulatory thinks it is appropriate to ask firms to re-test specific advisers.
The FCA has published its quarterly consultation paper (CP18/24) proposing to make changes to:
- SUP 16 to update Gabriel validation rule and FCA guidance on capital adequacy for Authorised Payment Institutions
- the existing supervisory principles in SUP 1A.3.2G
The deadline for comments for SUP 16 changes is 7 November 2018 and for SUP 1A.3.2G 7 October 2018.
The Basel Committee on Banking Supervision (BCBS) has released its final amendment to the Pillar 3 disclosure requirements for jurisdictions which implement an expected credit loss model as well as those adopting transitional arrangements for the regulatory treatment of accounting provisions.
The amendment is intended to provide users with disclosures that fully reflect any transitional effects for the impact of expected credit loss accounting on regulatory capital and provide further information on the allocation of accounting provisions in the general and specific provisions for standardised exposures during the interim period.
3.0 EU Regulatory Updates
3.1 ESMA Updates Benchmark Register
The European Securities and Markets Authority (ESMA) has moved its register for benchmark administrators and third country benchmarks to the ESMA Registers Database.
ESMA has published the following updated questions and answers regarding:
- Data reporting under the Market in Financial Instruments Regulation (MiFIR) regarding FX swaps reporting, interest rate swaps reporting and reference data fields 8-11.
The Members of European Parliament (MEPs) have approved new measures to combat terrorist financing by preventing money laundering. It proposes new rules to prevent money laundering by closing loopholes in existing law, specifically by adding:
- EU-wide definitions of money laundering related crimes
- EU-wide minimum penalties
- New sanctions
The approach will also allow member states to tighten their control over cashflows by:
- extending the definition of cash to include gold and anonymous prepaid electronic cash cards,
- enabling authorities to register information about cash movements below the current €10,000 threshold and to temporarily seize cash if they suspect criminal activity, and
- require disclosure of unaccompanied cash sent by cargo or post.
The measures will need to be formally approved by the Council after which, Member States will have 24 months from the date of entry to bring the new rules into force.
The FCA has banned Christian Bittar, a former Deutsche bank trader, from performing any function in relation to any regulated financial activity due to his lack of integrity and therefore fitness and propriety to carry out such a role.
Mr Bittar made requests to EURIBOR submitters both internally and externally to benefit the profitability of the trading positions for which he was responsible. The FCA commented that if Mr Bittar had been convicted and imprisoned, they would have sought a financial penalty of £6.5 million. Currently the regulator has prohibited him from performing any regulatory approved function.
In its final notice to Alistair Rae Burns, the FCA has given a penalty of £60,000 and a prohibition on him from performing any senior management function and any significant influence function in relation to any regulated activities.
Mr Burns, a director of TailorMade Independent Limited, was found by the FCA to have breached Statement of Principle 7 as he had failed to take reasonable steps to ensure that the firm complied with the relevant requirements of the regulatory system.