The FCA has published on its website a proposed miscellaneous amendment to the Handbook. It states that the amendments are minor changes but feedback on the proposals are welcomed. The proposal is in regard to changes including:
- Disclosure and Transparency Rules regarding diversity reporting (Chapter 3)
- DISP regarding access to the Financial Ombudsman Service for Politically Exposed Persons (PEPs) (Chapter 4)
- Guidance notes on the Annual Financial Crime Report (Chapter 7)
- Regulatory reporting requirements (Chapter 8)
The deadline for comments for chapter 3, 4 and 8 is 1st February 2018. The deadline for chapter 7 was 1st January 2018.
The FCA has updated on its website the success of its applicants in the third cohort of the sandbox. The sandbox functions can be found on the FCA website or in our Oct 2017 update. The FCA processed 18 applications that met the sandbox criteria and were accepted into testing. A list of the firms which are in the current cohort is available on the FCA website.
The FCA is now accepting applications from firms to be part of the fourth sandbox phase. The deadline to submit their applications is 31 January 2018.
Megan Butler, Director of Supervision – investment in the FCA, delivered a speech at the ICI Global Conference in London on 05 December 2017. The speech focused on capital markets’ regulation, specifically discussing the FCA’s tackling of cyber-crime, the responsibility of firms to report material breaches, financial crime through the capital markets, Brexit, and Markets in Financial Instruments Directive II (MiFID II). The key points are as follows:
- Cyber-crime: the FCA intends to achieve multi-national co-ordination in two key ways:
- sharing intelligence and expertise with other financial and enforcement authorities in the UK
- working closely with international colleagues in Europe to try and align individual approaches
- Responsibility of firms to report material breaches through good cyber security:
- knowing your information assets, how important it is and how to protect it
- managing the risk through implementation of appropriate governance and clear accountability
- responding to an incident and knowing whether you can operate during a cyber-attack
- Financial crime through the capital markets, namely the escalation of money laundering through capital markets:
- a keen interest from the FCA regarding the quality of Anti-Money Laundering (AML) systems and controls, including the monitoring of security transactions
- resilience to implement measures surrounding restrictions and sanctions
- preserve close regulatory and supervisory links with the EU
- uphold the key characteristics of successful co-ordination: comparability of rules, supervisory co-ordination, exchange of information and a mechanism to deal with differences
- MiFID II
- a sensible and proportional approach taken by the FCA to MiFID’s introduction
- introduction of MiFID II brings with it the second tranche of market abuse regulation implementation
The FCA has released its Handbook Notice 50 setting out the changes made to the FCA Handbook on 7 December 2017. The changes made are as follows:
- Handbook Administration (MiFID II) Instrument 2017
Conduct of Business Sourcebook (Insistent Clients) Instrument 2017
- Advising on Investments (Article 53(1) of the Regulation Activities Order) (Consequential Amendments) Instrument 2017
- Financial Services Compensation Scheme (Extension of Scope to Recognised
- Investment Exchanges) Instrument 2017
- Periodic Fees (2017/18) and Other Fees (No 2) Instrument 2017
- Fee (Consumer Financial Education Body Levy) Instrument 2017
- Fees (Payment Services) (No 3) Instrument 2017
- Fees (Payment Systems Regulation) Instrument (No 5) 2017
- Supervision Manual (Amendment No 23) Instrument 2017
- MiFID II Approved Persons and Senior Managers (Form Amendments) Instrument 2017
- Supervision Manual (Reporting No 7) instrument 2017
- Conduct of Business Sourcebook (Packaged Retail and Insurance-based Investment Products Regulation) (Amendment) Instrument
- MiFID II (Deferred Matters) Instrument 2017
- Banking (Information About Current Account Services) Instrument 2017
- Client Assets (Indirect Clearing) Instrument 2017
The FCA has published an article on its approach to competition. The FCA reinforces that one of its core objectives is to promote competition in everything it does. This is to ensure that the regulation will evolve with the financial service industry rather than holding it back. In its approach to competition, the FCA looks at:
- How competition objectives are delivered
- How it promotes competition in the interests of consumers
- Keeping markets open to entry and innovation
- Tackling anti-competitive conduct
The FCA is seeking views on whether their approach is clear to the firms. Comments are invited and the deadline is by 12 March 2018.
The FCA has published an article regarding its approach to authorisation and asks questions about how the FCA approaches authorisation. The following are some of the questions asked:
- Whether a clear understanding of the Threshold Conditions has been provided for by the FCA to firms and individuals
- How could the FCA improve in supporting firms and individuals in meeting the minimum standards
- Whether the FCA has prioritised the right strategic goals and if there are any additional goals the FCA should have
The document is open for comments till 12 March 2018.
The FCA has released on its website the final rules which will require providers of personal current accounts and business accounts to publish information that will aid customers in comparing the service received from different providers.
- The customers will be able to find the following from this new rule:
- How and when services and helplines are available
- Contact details for help and a 24-hour helpline
- How long it takes to open a current account and to have a debit card replaced
- How often the firms have had to report major operational and security incidents
- The level of complaints made against the firm
The FCA released its newsletter, the Market Watch, for December 2017. The newsletter covers market conduct and transaction reporting issues. The following are the items discussed in the handout:
- Transaction reporting (block/allocation level)
- An investment firm’s transaction report must reflect the transaction from its own perspective and, unless it meets the transmission conditions under Article 4 of the Delegated Regulation 2017/590, should not look forwards or backwards but report its immediate counterparty or client. This applies even if the client or counterparty is not subject to Markets in Financial Instruments Regulation (MiFIR).
- Data Reporting Service Provider (DRSP) Supervision Forms are available on the newsletter alongside the purpose of each form.
- Application of the Market Abuse Regulation (MAR) to Emission Allowance Market Participants (EAMPs)
- EAMPs are subject to the scope of the MAR from January 2018 by MiFID II.
- When certain thresholds are met, there will be a need to disclose inside information on emission allowance held.
- Notification on delay and persons discharging managerial responsibility (PDMRs) are included in the newsletter.
The FCA has published a policy statement (PS17/28) regarding changes to its handbook to ensure consistency with the Benchmark Regulation.
The handbook changes will affect benchmark administrators and firms that are already supervised under EU financial services legislation that contribute input data to benchmarks or use benchmarks.
The FCA has published a communication and a Q&A on reporting obligations of Alternative Investment Fund Managers (AIFMs) under the Alternative Investment Fund Managers Directive (AIFMD). The documents provide important information about:
- The transparency reporting requirement
- Procedures for reporting transparency information
- FCA’s approach to missed/late reporting
The FCA has released three open consultations regarding the transition of FCA firms’ Approved Persons Regime (APR) to the Senior Managers & Certification Regime (SM&CR). The papers focuses on how the FCA will move firms and senior staff over to the new regime. The three consultation papers are as follows:
- CP17/40 on how FSMA authorised firms and individuals will move to the SM&CR
- CP17/41 on how insurers and individuals will move to the SMCR
- CP17/42 on how the FCA will apply the Duty of Responsibility to insurers and FCA solo-regulated firms
FSMA authorised firms and individuals (CP17/40)
The FCA’s consultation paper regards how FSMA authorised firms and individuals will move to the SMCR. The paper introduces a process called ‘conversion’ and the FCA’s aim for this process is for it to be simple, clear and proportionate. For a majority of firms, the FCA plans to simply automatically convert APR approvals to Senior Management Functions (SMF). This is depending on what kind of firm you are and is reflected below:
The FCA has outlined the process of conversion for different firms:
- For individuals at Core and Limited Scope firms, APR will be automatically converted to SMCR where possible.
- For individuals at Enhanced firms, the conversion will be subject to notification and documentations.
For details of the type of firms and documentation required, please see the consultation paper.
This paper will apply to all firms authorised by the FCA under FSMA except for insurers (separate proposals) and deposit takers (SMCR already in place). The proposal does not extend to Appointed Representatives of affected firms. The deadline for comments is 21 February 2018.
Insurers and Individuals (CP17/41)
This consultation paper considers how insurers and individuals will move to the SMCR. The paper proposes different approaches depending on whether the insurer is:
- a firm subject to Solvency II or a Large Non-Directive Firm (NDF)
- a small NDF or a small run-off firm
- an Insurance Special Purpose Vehicle (ISPV)
The FCA has two processes for the conversion of the different types of firms:
- Individuals at Small NDFs, small run-off firms and ISPVs will be automatically converted to the SMCR
- Individuals at Solvency II firms and Large NDFs will be converted to the SMCR, subject to the submission of notifications and documentation.
For details of the type of firms and documentation required, please see the consultation paper.
The proposal applies to all dual-regulated insurance firms but do not extend to approved persons and individuals at Appointed Representatives of insurers. The deadline for comments is 21 February 2018.
Duty of Responsibility (CP17/42)
The consultation paper is regarding how the FCA will apply the Duty of Responsibility to insurers and FCA solo-regulated firms. The Duty of Responsibility has applied to Senior Managers of banking firms since May 2016. It will now further apply to Senior Managers of insurers and FCA solo-regulated firms when the SMCR is extended.
Action may be taken under the Duty of Responsibility against Senior Managers if:
- there is a contravention of a relevant requirement by the Senior Manager’s firm
- at the time of the contravention or during any part of it, the Senior Manager was responsible for the management of any of the firm’s activities in relation to which the contravention occurred
- the Senior Manager did not take such steps as a person in their position could reasonably have been expected to take to avoid the contravention occurring or continuing
The paper will apply to insurers, FCA solo-regulated firms and the senior management of both. The deadline for comment is by 21 February 2018.
The FCA has published a new form for EEA relevant authorised persons only. The form, Short Form A – EEA Relevant Authorised Persons Only, is an application to perform senior management functions.
The UK has adopted the Packaged Retail and Insurance-based Investment Products Regulations 2017 into UK legislation on 5th December with it coming into force on 1st January 2018. Minor corrections on the legislations have been made regarding:
- ‘SFT regulation’ to ‘CSD regulation’ in schedule 2
- ‘715 and 2017/701’ to ‘715, and 2017/701 and 1064’
The PRA has published a consultation paper CP26/17 regarding model risk management principles for stress testing. The objective of the document is to help regulators and firms assess capital positions under adverse economic conditions. The PRA proposes the following:
- firms participating in the Bank’s annual concurrent stress test should adopt the principles for all stress test models
- firms not participating should take into account their size, nature, scale, complexity of business activities and use of stress test models when seeking to apply the principles. For these firms, the PRA proses at a minimum:
- establishing a model definition, maintaining a model inventory, and implementing an effective governance framework, policies and procedures
- implementing a robust model development process, and undertaking validation and an independent review to model identified as material.
The consultation deadline is on 6 March 2018.
The PRA has published a consultation paper CP25/17 regarding an update to the pillar 2 reporting requirements. The document proposes the following:
- a new data item (PRA111) to capture stress testing data currently included in firms’ Internal Capital Adequacy Assessment Process (ICAAP)
- reduction in the frequency of reporting data items in the Reporting Pillar 2 Part of the PRA Rulebook for some firms
- consolidation of definitions in several reporting Parts of the PRA Rulebook into the Glossary
The consultation is relevant to banks, building societies and PRA-designated investment firms. The deadline for the consultation is 6 March 2018.
The PRA has published a policy statement (PS31/17) providing the final policy for changes in the PRA Rulebook as outlined in Chapter 7 of the Occasional Consultation Paper (CP18/17). The changes in the PS are in relation to MiFID II and the European Union Benchmarks Regulation (BMR).
The document will be updated to include MiFID II Passporting Amendment Instrument (without implementing technical standards). Following publication of the relevant technical standard in the Official Journal of the EU (OJ), the document will be updated with a MiFID II Passporting Instrument alongside the technical standard.
The document is relevant to PRA designated investment firms and FCA regulated MiFID firms, as well as all PRA regulated firms, all common platform firms and all firms completing the Senior Management Regime Statements of Responsibilities form.
The European Commission has published a legislative proposal on the prudential regulation and supervision of investment firms. Under the proposal, a vast majority of investment firms in the EU would no longer be subject to rules that were originally designed for banks. This will reduce administrative burden, enable competition and increase investment flows without compromising financial stability. At the same time, the largest and most systemic investment firms would be subject to the same rules and supervision as banks.
The PRA has published the PRA Rulebook: MiFID II Passporting Amendment Instrument 2017 in relation to the implementation of MiFID II. The following topics have been amended in relation to MiFID II:
- Notice of intention to establish a branch or use a tied agent
- Notice of intention to provide cross border services
- Notice of change of details to a branch or tied agent
- Notice of change of details to cross border services
The above comes into force on 3 January 2018.
The European Securities and Markets Authority (ESMA) has published two revised opinions providing guidance related to third-country trading venues for post trade transparency and position limits under MiFID II/MiFIR. The document addresses the execution of transactions by EU investment firms in third country trading venues (post-trade transparency) and the positions held in contracts traded on those venues for the position limit under MiFID II.
The document states that subject to ESMA assessment of third country trading venues, transactions on third country trading venues do not need to be made post-trade transparent and/or positions held are not considered to be economically equivalent to over-the-counter (OTC) contracts.
UK Finance have developed guidelines on MiFID II product governance and retail costs and charges. This will enable firms to share data knowing that their activity will be broadly in line with common industry approach and at a consistent level of application of the requirements.
The Global Legal Entity Identifier Foundation (GLEIF) has published a list of Entity Legal Forms (ELF) available for download on its website. The list contains more than 1,600 entity legal forms across more than 50 jurisdictions.
The ELF ‘specifies the elements of a scheme to identify the distinct entity legal forms in a jurisdiction. Its aim is to enable legal forms within jurisdictions to be codified and facilitate the classification of legal entity according to their legal form.’
The list will be periodically updated with newly issued Legal Entity Identifiers (LEIs) from 1 March 2018 indicating the applicable ELF code.
ESMA’s website states that it will provide updated register information in line with MiFIR/MiFID II requirements. On 3 January 2018, the existing register under MiFID I will be updated and new registers will be provided for MiFID II/MiFIR. The list of affected registers is as follows:
- Regulated markets
- Multilateral Trading Facilities
- NEW Organised trading facilities
- Systematic internalisers
- NEW approved publication arrangements
- NEW consolidated tape providers
- NEW approved reporting mechanisms
- Suspension and Restoration (SARIS)
- Central counterparties will become obsolete and removed from publication
- Shares admitted to trading on EU regulated markets will be replaced by FIRDS publication
The European Parliament has updated its procedure file on the Commission Delegated Regulation (EU) of 17 November 2017. The update concerns the scrutiny period which was originally stated to be one month from the 17 November 2017 and has now been extended to three months. If no objections are heard from the European Parliament and the Council of the EU, it will enter into force on the day following its publication in the OJ.
The European Securities and Markets Authority (ESMA) has published an update to their Questions and Answers (Q&As) regarding the below topics.
Central Securities Depository Regulation
ESMA has updated its Q&A The implementation of the Central Securities Depository Regulation (CSDR): the document covers updates on organisational requirements regarding membership of user committee and record keeping requirements in respect of settlement banks.
The updated document includes new answers on the following areas:
- Authorisation and registration on the obligations applicable to
- Requirements for users regarding the written plans to be produced by supervised entities
European Markets Infrastructure Regulation (EMIR)
The updated document is in relation to:
- Indirect clearing
- Reporting of collateral
- Swap reporting to trade repositories
- Contracts with no maturity
ESMA has published several Q&As in relation to MiFID II’s post-trading issues, commodity derivatives, data reporting, transparency and market structures issues and investor protection:
Post-trading issues and the implementation of MiFID II and MiFIR: the updated document includes new answers on the segregation level for indirect clearing accounts.
Commodity Derivatives under MiFID II and MiFIR relates to position limits and position reporting and the document is aimed at national Competent Authorities (CAs) and firms.
MiFIR data reporting is in relation to the following:
- Unknown date of admission
- Concept of underlying
- Non-EU branches of EU investment firms
Transparency and market structures are regarding:
- The scope of the tick size regime
- Application of MiFID II after 3 January 2018 as well as issues of late transposition
- Equity transparency
- Pre-trade transparency waivers
ESMA’s Q&A on investor protection provides clarification on the following subjects:
- Best execution
- Suitability and appropriateness
- Recording of telephone conversations and electronic communication
- Post-sale reporting
- Record keeping
- Investment advice on an independent basis
- Inducements (research)
- Information on charges and costs
- Underwriting and placement of a financial instrument
- Client categorisation
- Provision of investment services and activities by third country firms
- Application of MiFID II after 3 January 2018 and issues of late transposition
The Council of the EU has published the following presidency compromise proposals amending the Capital Requirements Regulation (CRR), the Capital Requirements Directive (CRD), the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR):
- Proposal for a Regulation 14891/17 amending Regulation (EU) No 575/2013 regarding the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements and amending Regulation (EU) No 648/2012.
- Proposal for a Directive 14892/17 amending Directive 2013/36/EU regarding exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures.
- Proposal for a Directive 14894/17 amending Directive 2014/59/EU on loss-absorbing and recapitalisation capacity of credit institutions and investment firms and amending Directive 98/26/EC, directive 2002/47/EC, Directive 2012/30/EU, Directive 2011/35/EU, Directive 2005/56/EC, Directive 2004/25/EC, and Directive 2007/36/EC.
- Proposal for the amendment of SRMR 14895/17
The following delegated/implementing regulations have been published on the OJ:
- The Commission Implementing Regulation (EU) 2017/2241 on the extension of the transitional periods related to own funds requirements for exposures to central counterparties set out in the CRR and the EMIR
- The Commission Delegated Regulation (EU) 2017/2295 supplementing Regulation (EU) No 575/2013 regarding the regulatory technical standards for disclosure of encumbered and unencumbered assets
- The Commission Delegated Regulation (EU) 2017/2294 amending Delegated Regulation (EU) 2017/565 regarding the specification of the definition of systematic internalisers for the purposes of MiFID II
- The Commission Implementing Regulation (EU) 2017/2382 laying down implementing technical standards (ITS) regarding standard forms, templates and procedures for the transmission of information in accordance with MiFID II (applicable from 3 January 2018)
The European Parliament has published a press release regarding the final vote on new EU rules on who bears banks’ losses. The MEPs have decided in favour of clear rules on the order in which troubled banks’ creditors are liable to cover losses. The Directive (BRRD 2) adds a new category of debts to bank insolvency hierarchy in order to protect senior debt and other liabilities as well as helping to reduce potential risk.
ESMA will publish a register of administrators and third country benchmarks in accordance with the Benchmark Regulation. Publishing began on the 3 January 2018 until Q3 2018 when the register interface will be available.
ESMA has delivered a speech regarding the key developments in the asset management sector over the past year. The speech focused on the following topics:
- Supervisory convergence work on Brexit, specifically the implications of the UK’s decision to withdraw from the EU and the need for a contingency plan
- Costs and charges of investment funds
- MiFID II regarding investment research and the global legal identifier.
ESMA has published a statement to support the smooth implementation of the LEI requirements under the MiFIR. ESMA and National Competent Authorities (NCAs) have identified that not all investment firms will succeed in obtaining LEI codes from all their clients ahead of 3 January 2018. In support to smooth introduction of the LEI requirements, ESMA will allow for a temporary period of six months so that:
- Firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, under the condition that before providing service the firm obtains necessary documentation from this client to apply for a LEI on behalf of the client
- Trading venues report their own LEI instead of LEI codes of non-EU issuers currently not having their own LEI codes
The FCA has released a statement in support of ESMA’s statement, which states that it will amend a validation rule in the transaction reporting system, the Market Data Processor (MDP, as soon as possible. The FCA also notes that while the period will last for six months, firms should make every effort to secure a clients’ LEI before trading on their behalf.
The European Commission has recognised some US trading venues as eligible for compliance with the EU trading obligation for derivatives. These US trading venues are authorised by the Commodity Futures Trading Commission (CFTC). The decision will allow EU counterparties to continue trading in the most liquid derivatise instruments on US platforms.
The CFTC is working towards an exemption to certain EU-authorised trading venues from registration requirements in the US.
The HM Treasury has published an advisory notice regarding money laundering and terrorist financing controls in higher risk jurisdictions. The notice provides a response to a previous Financial Action Task Force (FATF) statement regarding jurisdictions with strategic deficiencies in their AML/CFT regimes. The HM Treasury response asks firms to consider:
- DPRK - consider as high risk and apply counter measures and enhanced due diligence measures in accordance with the risks
- Iran- consider as high risk and apply enhanced due diligence measures in accordance with the risks
- Take appropriate actions to minimise the associated risks, which may include enhanced due diligence measures in high risk jurisdictions (Bosnia and Herzegovina, Ethiopia, Iraq, Sri Lanka, Syria, Trinidad Tobago, Tunisia, Vanuatu and Yemen)
The notice comments that these jurisdictions are subject to sanction measures which may require firms to take further additional measures.
The House of Commons’ Committee of Public Accounts, has published a document regarding the growing threat of online fraud. The Committee declares that online fraud is too vast a problem for the Home Office to solve on its own. Organisations including banks and retailers, must work in coordination with the Home Office to tackle the problem. The document sets out conclusions that the Home Office have drawn as well as recommendations for banks. Below are some of the conclusions and recommendations:
- Banks do not accept enough responsibility for preventing and reducing fraud and there is no data available for an assessment.
- It is recommended that minimum standards for banks should be set out on preventing online fraud and protecting its customers.
- Unless all banks cooperate, there will be little progress on tackling fraud and returning money to customers.
- It is recommended that banks cooperate with the Join Fraud Taskforce partners and make better use of technology and information sharing.
- The Department has no effective arrangements for the oversight of a coordinated and effective response to online fraud and the reporting of such progress.
- It is recommended that the Department should develop specific plans for how it will measure progress and judge the success of the Joint Fraud Taskforce.
ESMA has published a draft technical standards, aiming to strengthen group-wide management of money laundering and terrorist financing risks where firms have branches or majority-owned subsidiaries based in third countries, whose laws do not permit the application of group-wide policies and procedures on AML and countering the finance of terrorism.
The draft Regulatory Technical Standard (RTS) requires credit and financial institutions to determine the extent of the measures on a risk-sensitive basis and demonstrate to CAs that the steps taken are commensurate with the ML/TF risk.
The Home Secretary has announced the creation of the National Economic Crime Centre (NECC) within the National Crime Agency (NCA). The NECC will plan, task and coordinate operational responses across agencies to tackle economic crime more effectively.
The NECC includes representatives from the City of London Police, Serious Fraud Office, Financial Conduct Authority, the Home Office, Crown Prosecution Service and HM Revenue & Customs.
The HM Treasury has published a response to the anti-money laundering supervisory review consultation in July 2017. The July 2017 consultation was regarding the draft Oversight of Professional Body AML and Counter Terrorist Financing (CTF) Supervision Regulations and the impact on business from the Office for Professional Body AML Supervision (OPBAS).
The document discusses respondents’ comments on the July 2017 consultation in relation to the following;
- Powers to request information and skilled person’s reports and issue directions
- Safeguards on the provision of information
- Admissibility of statements
- Disclosure of OPBAS
- Processes and appeals
- Costs of supervision
The document further provides FAQs in consideration of questions that were raised in the submission of the draft regulation and sets out how the issues are being processed.
The European Parliament and the Council have reached a political agreement on the proposal to strengthen EU rules on AML and CTF. The revision of the AMLD4 aims at the following:
- Increasing transparency on company owners and trusts by establishing beneficial ownership registers;
- Preventing risks associated with the use of virtual currencies for terrorist financing and limited the use of pre-paid cards;
- Improving financial transaction safeguards regarding high-risk third countries;
- Enhancing the access of Financial Intelligence Units to information as well as centralised bank account registers.
The Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017 (SI 2017/1301) have been laid before Parliament. The purpose of the document is to allow the FCA to have oversight of the professional bodies which have responsibility for supervising compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
The Regulation comes into force on 18 January 2018. The HM Treasury must review and report its conclusions by 26 June 2022.
The UK government has published the anti-corruption strategy to tackle corruption domestically and internationally up to 2022. The document sets out a long-term vision of anti-corruption action leading to:
• Reduced threats to national security
• Stronger economic opportunities
• Greater public trust and confidence in the institutions
The document sets out 6 priorities for the Parliament:
- Reducing the insider threat in high-risk domestic sectors (eg. borders and ports)
- Strengthening the integrity of the UK as a financial centre
- Promoting integrity across both the public and private sector
- Reducing corruption in public procurement and grants
- Improving the global business environment
- Cooperation with other countries against corruption
The FCA has commenced civil proceedings against:
- Avacade Limited, trading as Avacade Investment Options
- Alexandra Associates (U.K.) Limited, trading as Avacade Future Solutions
- Craig Lummis
- Lee Lummis
- Raymond Fox
The FCA alleges that the above firms have:
- Made misleading statements
- Carried out regulated activities without FCA authorisation or exemption
- Communicated financial promotions without the prior approval/authorisation to the Financial Services and Markets Act 2000 and 2012.
The individuals above were alleged to have knowingly involved in the breaches of Avacade and Alexandra Associates. Restitution is being sought for in favour of customers who have been affected by the breaches. The proceedings are at an early stage and no dates for the trial have been set.
The FCA has fined Bluefin Insurance Services Limited (Bluefin) £4,023,800 for having inadequate systems and controls and failing to provide information to its customers about Bluefin’s independence in a way that was clear, fair and not misleading.
Bluefin did not disclose a policy that compromised its independence which focused on increasing the business placed with its parent company over treating customers fairly. The FCA remarked that it is unacceptable for firms to hold themselves out as independent when they are not.
Bluefin agreed to settle at an early stage and obtained a 30% reduction. IF not for the discount, the fine would have been £5,748,200.
The FCA has made its first fine on an AIM company for late disclosure regarding the Market Abuse Regulation introduced in July 2016. The company concerned, Tejoori Limited (Tejoori), has been fined for failing to inform the market of inside information as required by Article 17(1) of the MAR. Under the section, Tejoori was required to disclose inside information of a sale as soon as possible. Its failure to do so resulted in a fine of £70,000 from the FCA.
The FCA was notified by Tejoori regarding the breach and full cooperation was complied with, by Tejoori providing account of the events that occurred. Tejoori decided to settle at an early stage and therefore qualified for a 30% discount. Without this, the penalty would have been £100,000.