Financial Services Law

Financial services developments Financial and trade sanctions: FCA publishes findings from review of firms’ systems and controls The Financial Conduct Authority (FCA) has released the results of a review examining financial services firms’ arrangements and safeguards for both financial and trade sanctions. The publication sets out illustrations of effective and poor practice, plus areas needing enhancement, designed to support compliance with sanctions law. According to the FCA, firms have advanced in stopping sanctions breaches, yet material shortcomings still persist. Alongside the findings, the FCA has entered into an MoU with the Office of Trade Sanctions Implementation (OTSI), defining how the two bodies will co-operate and routinely share intelligence. Since February 2022, the FCA reports it has proactively evaluated the sanctions frameworks and controls of more than 150 firms spanning a broad range of financial services sectors. This covered controls connected to financial...

In this issue: UK, EU and international regulators and bodies Authorisation, approval and supervision Prudential requirements Financial crime and sanctions Consumer protection Complaints, compensation and claims management Investigations, enforcement and discipline Regulation of capital markets Regulation of derivatives Sustainable finance and ESG Banks and mutuals Investment funds and asset management EU MiFID II Islamic finance Consumer credit, mortgage and home finance Regulation of insurance Payment services and systems Fintech and cryptoassets Regulation of AI in FS Dates for your diary New and updated content Financial Services Enforcement Database Daily and weekly news alerts LexTalk®Financial Services: a Lexis®Nexis community UK, EU and international regulators and bodies BCBS and IOSCO outline progress updates. The Basel Committee on Banking Supervision and the...

Financial services developments FCA urges financial promotion approvers to apply the Consumer Duty from the start of the process The Financial Conduct Authority (FCA) has released the findings of its review into financial promotion approvers, stating that these firms need to do more to safeguard consumers. The best performers wove the Consumer Duty in from the outset of their workflows, enabling them to ensure every signed-off promotion was accurate, easy to understand and directed at the correct audience. By contrast, the FCA identified cases where firms cleared adverts carrying unproven claims, or let retail investors access promotions meant for professional clients. In some instances, approvers leaned on third‑party templates rather than conducting thorough checks themselves. The review examined ten authorised firms that sign off financial promotions for businesses not authorised by the FCA, with a focus on those approving promotions for Buy Now Pay Later,...

In recent years, most sectors have felt the effects of innovation and emerging technology. Much of this progress is driven by the aim to lower costs and enhance efficiency. So far, disruption within the debt capital markets has been limited, chiefly due to significant entry barriers such as capital requirements and regulatory scrutiny. This is changing, however, as these markets begin to adopt new technologies... What is fintech? There is no single agreed definition of ‘fintech’, but the term is commonly used to capture technology-enabled innovation within financial services. cryptocurrencies/cryptoassets (eg bitcoin) blockchain or distributed ledger technology (DLT) artificial intelligence (AI) and machine learning (ML) crowd funding platforms ‘telematics-based’ insurance (eg where data is collected to monitor driving) mobile banking Why is fintech being explored for the debt capital...

This Practice Note reviews Group Litigation Orders (GLOs) in the context of financial services disputes. It contrasts GLOs with: other mechanisms for multi-party litigation: consolidation of actions (CPR 3.1(2)(g)) representative actions (CPR 19.8) ‘omnibus claims’ (CPR 7.3) test cases following complaints to the Financial Ombudsman Service (FOS) (DISP 3.4.2 R) the Financial Markets Test Case Procedure (CPR 63A) collective proceedings for competition law breaches collective redress obtainable through regulatory action by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA): consumer redress schemes (FSMA 2000, s 404) ...

The aim of this Practice Note is to set out an overview of the legislation that underpins building societies. It also briefly addresses the legal framework supporting other mutual bodies, such as friendly societies. Overview of the Building Societies Act 1986 The Building Societies Act 1986 (BSA 1986) introduced, at that time, an entirely fresh statutory framework for building societies, the first wholesale re-cast since the original comprehensive building society legislation of 1874. Since then, BSA 1986 has been amended repeatedly, and was substantially overhauled by the Building Societies Act 1997 (BSA 1997), the Financial Services and Markets Act 2000 (FSMA 2000), and the Financial Services Act 2012 (FSA 2012) (which also amended FSMA 2000). The Financial Services (Banking Reform) Act 2013 made further changes to BSA 1986, and assorted minor enactments have also produced additional amendments to BSA 1986. Additional amendments were enacted by the...

This precedent memorandum This precedent memorandum presents a specimen group-wide dealing policy issued by The Chartered Governance Institute (formerly known as ICSA: The Governance Institute) (CGI), GC100, the Quoted Companies Alliance (QCA) and other market participants too. It was created after the Financial Conduct Authority (FCA) chose to remove the Model Code, which had formed part of the listing rules, because it conflicted with the EU Market Abuse Regulation that came into force on 3 July 2016. The CGI, GC 100 and the QCA agreed that it would be greatly beneficial for listed and quoted companies to be able to refer to an equivalent version of the Model Code. Companies with a former premium listing of equity shares had previously been required to comply with the Model Code, which restricted persons discharging managerial responsibilities (PDMRs) from dealing in the company’s securities at certain times. The...

ARCHIVED This Precedent is archived and is not maintained. The training pack comprises template PowerPoint slides that may serve as the basis for one or more training seminars introducing retained EU law. It is anticipated that those providing training will use the slides as a helpful starting point for their presentation(s), tailoring, adapting and amending them as appropriate to reflect their particular area of practice. The materials are customisable. Click the link below to download the presentation. Contents These training materials cover the following: What constitutes retained EU law? How is retained EU law described? What do the pertinent provisions state?... ...

Environmental Targets for a Limited Partnership Agreement (Stella & Flora’s Clause) (The Chancery Lane Project) This provision sets out changes and supplements to the ILPA model Limited Partnership Agreement, enabling ESG matters to be examined, surfaced and factored into investment and valuation choices. Through these amendments and additions to the standard form, ESG issues can be investigated, raised and integrated into both investment analysis and pricing decisions. The Chancery Lane Project (TCLP) created these sustainability terms as ‘Stella & Flora’s Clause’, with links available on TCLP’s site below. For comprehensive direction on environmental targets within a Limited Partnership Agreement, please consult TCLP’s published clause. Please rely on TCLP’s clause for detail. TCLP is the code name for a concentrated, collaborative initiative of lawyers globally, creating contracts and template legislation to combat climate change. For further details, visit:...

There are a number of points to weigh up when determining if a consumer credit agreement is regulated by the Consumer Credit Act 1974 (CCA 1974). Under the CCA 1974, s 8(1), a consumer credit agreement is described as an agreement between an individual (“the debtor”) and any other person (“the creditor”) whereby the creditor extends credit of any amount......

What is the regulatory regime under the Financial Services and Markets Act 2000 (FSMA 2000) Under section 19 of the Financial Services and Markets Act 2000, the general prohibition applies: a person must not carry on a regulated activity in the UK, or even purport to do so, unless they are within one of the permitted categories below. An authorised person (that is, authorised by the Prudential Regulation Authority and/or the Financial Conduct Authority) An exempt person (for example, an appointed representative) For an outline of the UK regime governing regulated activities, see Practice Note: What are regulated activities? An activity is regulated if it is of a ‘specified kind’—as listed in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO 2001), SI 2001/544—and it is carried on by way of business. For further detail on what amounts to carrying on a...

BREXIT At 11pm (GMT) on 31 December 2020—known as ‘IP completion day’—the transition/implementation period entered into following the UK’s withdrawal from the EU came to a close. From that point onwards, key transitional arrangements came to an end and wide‑ranging changes started to take effect across the UK’s legal regime. This document provides guidance on subjects affected by these changes. Before continuing your research, see: Brexit and financial services: materials on the post‑Brexit UK/EU regulatory regime [Archived]. This Q&A assesses the impact of Brexit on passporting in the insurance sector, outlines the options available to insurers to continue to access the European Economic Areas (EEA), and highlights the factors for insurers to take into account in their contingency planning. This Q&A is produced in partnership with Clare Swirski at Clifford Chance. What are the main aspects of passporting under Solvency II?......