World Securities Law Report informs you of developments in the regulation of transactions involving securities around the world. It provides expert analysis and practical guidance, with...
By Emma Radmore and Catherine Hogg
Her Majesty's Treasury announces a regulatory cooperation agreement between FCA and the Monetary Authority of Singapore (MAS), among other regulatory and legal developments in the U.K., as outlined below.
Treasury has announced the U.K.'s first “FinTech bridge,” which includes a regulatory cooperation agreement between FCA and the Monetary Authority of Singapore (MAS). The agreement will enable the regulators to refer FinTech firms to their counterparts across the globe.
FCA has published a supplement to its most recent Handbook Notice. It includes the European Long-Term Investment Funds (ELTIF) Regulation (No 2) Instrument 2016 which it has made jointly with FOS and which applies the redress rules to ELTIFs.
FCA has created a new page on its website devoted to Suspicious Transaction and Order Reports (STOR) under the Market Abuse Regulation (EU MAR). The page gives information on FCA's supervisory approach to the new regime, and its expectations on “notifiers.” FCA notes some firms may need to make significant changes to enable them to meet the EU MAR requirements. It says it will take a risk-based approach to supervision, and where firms are not able to apply all the necessary surveillance from the effective date of EU MAR, they should have made best efforts to achieve full compliance, and be ready to explain how approaches will be further developed. FCA is developing systems to ensure firms can report using the ESMA standard forms through Connect.
The latest edition of FCA’s Policy Development Update provides information and links to publications issued since the last edition, recent Handbook developments and an updated timetable for forthcoming publications. Key publications expected over the coming months include:
FCA has announced two convictions in the case it brought as part of Operation Tabernula. Martyn Dodgson, an investment banker, and Andrew Hind, a property developer and chartered accountant, conspired to deal secretly on several occasions, often using information from Mr Dodgson's employers. They created a complex method to avoid detection. FCA described the investigation as the largest and most complex insider dealing investigation it had carried out. It had previously secured three convictions. Three further individuals were acquitted by Southwark Crown Court.
FCA has published the minutes and slides from a conduct forum it held on 18 April on the revised Markets in Financial instruments Directive (MiFID 2). The forum attendees were industry associations and a few firms they suggested, and the forum covered product governance and disclosure of costs and charges. FCA invited questions in advance, and its responses included:
FCA is consulting on proposed changes to the Client Assets sourcebook (CASS) and the Collective Investment Schemes sourcebook (COLL), following the adoption of the Undertakings for Collective Investment in Transferable Securities (UCITS) V Level 2 Regulation. The UCITS V Level 2 Regulation will apply to firms from 13 October 2016 and does not need to be transposed into U.K. law. Most of FCA's proposals are changes to its handbook to ensure its rules are consistent with EU law. It proposes consequential amendments to CASS, which apply to UCITS depositaries, most of which will affect CASS 6.6. FCA plans to disapply certain CASS rules and guidance, and proposes guidance in COLL 6.9 to signpost the conditions for meeting the UCITS V Level 2 Regulation's independence requirements, while not changing the substance of the guidance. The consultation also covers minor changes to the Senior Management Arrangements, Systems and Controls sourcebook (SYSC) and consequential amendments in COLL and the Investment Funds sourcebook (FUND) to reflect certain measures in the Securities Financing Transactions and Reuse Regulation (SFTR). There will be a minor amendment to SYSC 19E.2.9R(1), on UCITS management company remuneration committee requirements. FCA plans to copy out into COLL the SFTR provisions which require managers of UCITS and alternative investment funds (AIFs) to disclose details of their use of SFTs and total return swaps in the funds’ pre-contractual documents and periodical reports to investors. FCA is consulting on changes to COLL 4.2 and COLL 4.5 for UCITS schemes and non-UCITS retail schemes (NURS), and to add specific guidance for qualified investor schemes (QIS) in COLL 8.3 and for full-scope UK AIF managers (AIFMs) in FUND 3.2 and FUND 3.3 cross-referring to the relevant COLL provisions. Consultation closes on 19 July, to allow FCA time to make its rules and bring them into force with the UCITS V Level 2 Regulation.
FCA has produced notification forms for firms' use under EU MAR. There are forms for the delayed disclosure of inside information and for persons discharging managerial responsibilities (PDMRs), with a short accompanying market bulletin focusing on how issuers are to file these notifications. FCA reminds users that inside information must be announced as soon as possible and may only be delayed where certain conditions are met. From 3 July, where an issuer has delayed disclosing inside information in accordance with EU MAR, the issuer must notify FCA, via this form, of the delay immediately following public disclosure of the information. PDMRs and persons closely associated with them must notify the issuer and FCA of certain transactions in or related to the issuer’s financial instruments conducted on their own account and worth over €5,000. Notification via these forms should be made promptly and at least within three business days.
LSE has published an “Inside AIM” newsletter outlining the preparation underway for the implementation of EU MAR. It sets out information to support nominated advisers as they work with their clients to prepare for the introduction of EU MAR and the consequent changes to the AIM Rules that are currently subject to consultation. The newsletter assumed that the proposals set out in the consultation are implemented.
CMA has published its provisional decision following a review of the 2008 Northern Ireland PCA banking order as amended in 2011 alongside the review of the 2002 SME banking undertakings and the retail banking market investigation. CMA has provisionally decided that market and regulatory developments and the retail banking market investigation’s proposed remedies package represent a change of circumstances such that the order in its entirety can be revoked. CMA provides an assessment of each of the order's articles.
Emma Radmore is a Managing Associate and Catherine Hogg is an Information Assistant in Denton's UKMEA LLP's Financial Services and Funds Practice in London. Emma Radmore is also a member of the World Securities Law Report Advisory Board. They may be contacted at email@example.com and firstname.lastname@example.org.
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