Legal News

The legislation broadly matched industry expectations, with some welcome adjustments, notably decentralised finance ( De Fi) being largely excluded from the scope and an exemption for overseas stablecoin issuers (see: Financial Services and Markets Act 2000 ( Regulated Activities and Miscellaneous Provisions) ( Cryptoassets) Order 2025, LNB News 30/04/2025 6, and News Analysis: Legislation to bring UK crypto activity within regulatory perimeter published). Finance minister Rachel Reeves also disclosed talks with US counterparts on deeper cooperation over digital assets, potentially easing anxiety among UK businesses about the United States moving ahead under crypto-friendly president Donald Trump. The Treasury said ‘clear new rules’ will boost investor confidence and protect consumers, though the 29 April 2025 announcements (a draft statutory instrument, a policy statement and a press release) sketch only the bare outline of the government’s plan. Businesses ‘should not expect this draft...

In this issue: UK, EU and International Regulators and Bodies Authorisation, Approval and Supervision Prudential Requirements Financial Crime and Sanctions Regulation of Capital Markets Regulation of Derivatives Sustainable Finance and ESG Banks and Mutuals Investment Funds and Asset Management UK Mi FID II Regulation of Insurance FSMA Regulated Pensions Activity Payment Services and Systems Fintech and Cryptoassets Regulation of AI in FS Dates for your diary Lex Talk® Financial Services: a Lexis®Nexis community UK, EU and International Regulators and Bodies FCA’s regulatory plans point to cautious optimism The Financial Conduct Authority’s 2025–2030 strategy, published on 25 March 2025, sets out four core priorities: combating financial crime supporting consumers encouraging growth becoming a smarter regulator Firms that look more closely will notice some less expected but...

Proposed changes to scope of UK regime Current regime In the UK, the AIFM framework currently separates firms into: full-scope AIFMs: FCA-authorised and required to meet a broad rulebook, covering disclosures, reporting and robust operational standards small authorised AIFMs: authorised by the FCA but not held to the comprehensive obligations imposed on full-scope AIFMs small registered AIFMs: registered with the FCA and subject only to limited reporting. This route was introduced for firms not previously FCA-authorised, such as managers of social entrepreneurship funds and registered venture capital funds The threshold for becoming a full-scope AIFM is: over €100m of assets under management in leveraged assets, generally relevant to hedge fund managers over €500m of assets under management in unleveraged assets with no redemption rights for five years, typically relevant to private equity...

Senior managers at financial firms identified in corporate self-reports to the Serious Fraud Office ( SFO) are set to come under Financial Conduct Authority ( FCA) scrutiny for any regulatory failings found, lawyers cautioned. They said probes will rely on material provided by the companies themselves, submitted in their own interests. The SFO will pass these disclosures to the financial regulator. The new offence sits within the Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023). Under ECCTA 2023, large corporates will be liable where an employee or agent commits fraud for the organisation’s benefit and adequate prevention measures were absent. The regime targets businesses only, not individuals. FCA investigations boost We expect an increase in FCA enforcement, particularly against senior managers who breach duties under the ‘failure to prevent’ offence, drawing on what firms report to the SFO, said Jennifer...

UK developments FCA updates webpage on sustainable finance discussion paper DP23/1 The FCA has refreshed its webpage to summarise feedback on ‘ DP23/1: Finance for Positive Sustainable Change’, first issued in February 2023. Respondents broadly endorsed the significance of sustainability topics and the themes presented in DP23/1. Since releasing DP23/1, the FCA has brought in measures addressing several of those themes, including the Consumer Duty, Sustainable Disclosure Requirements ( SDR) with labelling rules, and the Anti- Greenwashing Rule. As a result, it is not presently looking to propose further rules on the areas explored in DP23/1. Instead, the FCA will continue to champion these themes through other initiatives at home and abroad. See: LNB News 02/04/2025 49. Source: DP23/1: Finance for positive sustainable change | FCA [ Updated] HM Treasury issues guidance on best practice examples for sustainability reporting for 2023-2024 HM Treasury has released guidance on...

UK developments FCA updates webpage on sustainable finance discussion paper DP23/1 The FCA has refreshed its webpage to summarise views submitted on discussion paper ‘ DP23/1: Finance for Positive Sustainable Change’, which it originally issued in February 2023. The regulator reports that respondents were broadly supportive of the significance of sustainability issues and of themes set out in DP23/1. Since releasing DP23/1, however, the FCA notes it has already brought in measures touching several themes, including the Consumer Duty, Sustainable Disclosure Requirements ( SDR) and associated labelling, plus the Anti‑ Greenwashing Rule, and is therefore not presently minded to propose further rules on DP23/1’s themes at the present time. Instead, the FCA will keep advancing the DP23/1 themes via other initiatives, operating within the UK and through international work too. See: LNB News 02/04/2025 49. Source: DP23/1: Finance for positive sustainable change | FCA [...

In its strategy, the FCA signals a rethink of the data it seeks, including scrapping certain routine returns, so it only gathers information it genuinely needs and will use, alongside a forthcoming review of the redress regime. The FCA recognises that the current framework can create uncertainty for consumers, firms and their investors, potentially damping investment and innovation. Its secondary objective of promoting international competitiveness and growth is evident throughout, seemingly addressing recent criticism that this aim has not been given sufficient weight. A clear example is the repeated emphasis on avoiding unduly burdensome regulation and the perceived drag on growth that such rules can bring. As a consequence, a less interventionist stance appears likely in the near future. However, regulated firms should be under no illusion: the strategy also contains firm commitments to act assertively where the risk of harm is...

In this issue: UK, EU and international regulators and bodies Authorisation, approval and supervision Operational resilience Financial crime and sanctions Consumer protection Complaints, compensation and claims management Investigations, enforcement and discipline Regulation of capital markets Packaged Retail and Insurance-based Investment Products ( PRIIPs) Dispute resolution for financial services lawyers Regulation of derivatives Sustainable finance and ESG Investment funds and asset management UK Mi FID II EU Mi FID II Payment services and systems Fintech and cryptoassets Regulation of AI in FS Lex Talk®Financial Services: a Lexis®Nexis community Financial Services Enforcement Database Daily and weekly news alerts Intraday news alerts New and updated content Dates for your diary Latest Q& As No Weekly Highlights on 24 April...

Practice Note This Practice Note serves as a navigational guide for exploring the UK EMIR provisions, delivering an article-by-article comparison with the corresponding elements of the EU EMIR regime. A traffic light system......

The successful prosecution of Dmitrii Ovsiannikov The successful prosecution of Dmitrii Ovsiannikov, the first person convicted of breaching the UK’s sanctions regime against Russia, has triggered debate among lawyers, who argue that pursuing spending on basic living costs sits uneasily with Britain’s foreign policy objectives. While police, prosecutors and ministers trumpeted the Southwark Crown Court verdict as a warning shot to oligarchs, some practitioners caution it may send the wrong signal. Carter- Ruck associate Tasha Benkhadra suggested the National Crime Agency’s efforts would be better directed at suspected circumvention tied to arms transactions and the funding of sectors essential to the Russian war effort. A Southwark jury found Ovsiannikov guilty of circumventing the UK sanctions regime on 9 April 2025, and he received a 40-month prison term on 11 April 2025. The case alleged he and his family intentionally sidestepped financial...

In this issue: UK, EU and international regulators and bodies Authorisation, approval and supervision; accountability, culture and social governance; prudential requirements Financial crime and sanctions; investigations, enforcement and discipline Benchmarks/ IBOR reform and capital markets regulation; dispute resolution for financial services lawyers Derivatives regulation; sustainable finance and ESG Banks and mutuals; investment funds and asset management UK Mi FID II and EU Mi FID II Consumer credit, mortgage and home finance; insurance regulation Payment services and systems; fintech and cryptoassets Lex Talk® Financial Services: a Lexis®Nexis community; Financial Services Enforcement Database Daily/weekly and intraday news alerts; new and updated content; dates for your diary; latest Q& As UK, EU and international regulators and bodies EIOPA publishes strategy to simplify regulation and enhance European...

Santander UK plc v CCP Graduate School Ltd [2025] EWHC 667 ( KB) What are the practical implications of this case? This is a noteworthy judgment in a developing branch of the law concerning the scope for victims of APP frauds to pursue redress through actions against banks that, while outwardly innocent, had their accounts used in the fraud. The court delineates constraints on what might otherwise be regarded as an expanding field of bank duties and potential liabilities. The judgment makes the point that the cautious, incremental evolution of any duty of care is not a theoretical exercise; deciding what is fair, just and reasonable depends on the surrounding circumstances. As Lord Leggatt observed in Philipp at [16], banks operate within a highly regulated legal regime which recognises the need to strike a balance between facilitating swift payment processing and the...

The credit brokering journey Portraying the act of telling a customer that you will source, select and arrange a finance deal with a separate provider as “a textbook brokering function”, Robert Weir KC of Devereux Chambers—appearing for motorists in three linked claims—advanced his case. He explained that “ The credit brokering journey” in each instance began only after the vehicle’s price had been fixed, with dealers then putting in place purchase agreements for customers with limited financial sophistication. His submissions were delivered on the second day of a high-profile hearing about allegedly “hidden” commissions paid by lenders to car dealers for arranging finance. Close Brothers Ltd and First Rand Bank Ltd are seeking to overturn a Court of Appeal ruling that dealers could lawfully receive commissions from motor finance providers only where those payments were disclosed to customers. Consumers contend that dealers owe a duty to...

In this issue: UK, EU and international regulators and bodies Authorisations, approvals and oversight Accountability, culture and social governance Insurance regulation Prudential standards Operational resilience Financial crime and sanctions Consumer protection Complaints, redress and claims handling Investigations, enforcement and discipline Capital markets regulation Dispute resolution for financial services lawyers Derivatives regulation Sustainable finance and ESG Banks and mutuals Mi FID II Consumer credit, mortgages and home finance Regulation of insurance FSMA-regulated pensions activity Payment services and systems Fintech and cryptoassets Lex Talk® Financial Services: a Lexis®Nexis community Financial Services Enforcement Database Daily and weekly news alerts Intraday news alerts New and updated content Dates for your diary Latest Q& As UK, EU and...

The public prosecutor’s office has levied sanctions following a joint, coordinated probe, conducted with Germany’s federal criminal police office, into deceptive environmental assertions—labelled ‘greenwashing’ by German regulators and authorities—against the firms in question ( DWS Group Gmb H & Co KGa A and DWS Investment Gmb H). Fines, the prosecutor’s office said, relate to breaches of the German Capital Investment Code. These provisions forbid businesses from misrepresenting their holdings as being greener than they actually are. The German authority added that DWS’s asset managers promoted products that......

Two lenders challenge Court of Appeal ruling on fiduciary duty First Rand Bank and Close Brothers are contesting a Court of Appeal judgment holding that motor dealers owed customers a fiduciary duty and required consent before accepting lender commissions for arranging finance. Mark Howard KC of Brick Court Chambers, for First Rand, argued the appellate court committed an “egregious error” in its October 2024 conclusion that dealers, acting as credit brokers, had to disclose commission arrangements. In filings, Howard described the outcome as a “novel finding” that “came as a very considerable surprise to the industry”. The decision, which favoured three motorists — Marcus Johnson, Andrew Wrench and Amy Hopcraft — sparked suggestions that motor finance providers could face a flood of claims over historic agreements. Lenders might be required to reimburse consumers where such payments are deemed...

Lenders including Barclays, Citigroup and JPMorgan told the UK Supreme Court that the Court of Appeal had circumvented the Competition Appeal Tribunal’s ( CAT) position as the primary assessor of whether to certify collective proceedings when it overturned the CAT’s decision to stop an opt-out claim. Daniel Beard KC of Monckton Chambers, for the banks, said the tribunal was entitled to evaluate the merits and strength of the case—alleging the banks rigged foreign-exchange markets between 2007 and 2013—when it declined to certify the claim on an opt-out basis. He said the tribunal applied the correct legal approach and reached a conclusion that was plainly available to it. The banks are contesting a July 2023 Court of Appeal judgment that altered the specialist tribunal’s collective proceedings order and permitted the claim to continue on an opt-out footing. The appeals court allowed thousands of...

The result of a three-day hearing before the UK Supreme Court may signal a significant shift in how the broking and lending sector views its duties and everyday dealings with customers, said Nicola Pangbourne, a partner at Kennedys. The motor finance sector was jolted in October 2024 when the Court of Appeal firmly decided it was unlawful for car retailers to receive any commission from motor finance providers unless this was fully and transparently revealed to customers, and that they had agreed. Two major banks, Close Brothers Plc and First Rand Ltd, are contesting the judgment. The Financial Conduct Authority ( FCA), which has been examining car credit, has formally been allowed to step in. Chris Webber, a partner at Squire Patton Boggs LLP, called the dispute a major moment for two reasons. In motor finance, it will probably settle whether the FCA...

UK Finance, which speaks for 300 firms, said in a report produced with EY that wholesale banks lacking direct retail customers should be excluded from the Consumer Duty, a consumer-protection regime that requires good outcomes for consumers. The trade association argued that the Duty piles on cost and complexity, discouraging the supply of innovative products. It is a friction that regulators ought to resolve to improve the flow of capital into investments. The report added that wholesale investment banks have limited control over consumer outcomes and are already covered by significant consumer-facing obligations such as Mi FID II and the principle of treating customers fairly. The Markets in Financial Instruments Directive II ( Mi FID II) is an EU legacy regulation that provides an investor-protection framework, requiring investment firms to act in the best interest of their clients......

The portfolio letter This portfolio letter builds on an earlier FCA letter issued on 16 March 2023. That communication to payments firms outlined the steps the FCA expected firms to take to deliver three outcomes it had set for the sector, together with three cost-cutting priorities: Safeguard customers’ money Ensure firms do not compromise the integrity of the financial system Meet customers’ needs through high-quality products and services by implementing the Consumer Duty The FCA reiterated that firms must implement and comply with the Consumer Duty. The March 2023 portfolio letter also highlighted additional cost-cutting priorities: Governance and leadership, including oversight of agents and distributors Operational resilience, including reliance on providers of critical services such as technology and banking services Regulatory reporting The FCA stated it would make greater use of its right to charge firms that miss...