UK FCA past business reviews: what duties, if any, do financial institutions owe directly to customers? High Court finds no contractual obligations, but tortious duties are arguable

The recent and somewhat surprising decision of the High Court in Suremime Limited v Barclays Bank plc [2015] EWHC 2277 (QB) is important to any financial institution that has agreed to conduct an FCA past business review or redress exercise.

In particular, the court has held that it is arguable that such institutions owe duties of care in tort, such that customers would have private law rights of action against the institution if the terms agreed with the FCA are not followed. However, the existence of such rights has not been finally determined by the court because the questions arose in the context of an interim application to amend Particulars of Claim. Continue reading

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Filed under Banking, Commercial Litigation, FCA, Retail Banks

People’s Bank of China Enters into Anti-Money Laundering Cooperation Arrangement with Macau’s Monetary Authority

In what will undoubtedly be seen as another step in Beijing’s effort in the battle against corruption and the proceeds of corrupt transactions, the Chinese central bank has entered into a cooperation agreement with Macau’s Monetary Authority that will result in additional levels of cooperation between the central bank and the Special Administrative Region’s financial regulator.  To read more from our Corporate Crime team, click here.


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Filed under Asia, China, Sanctions and Money Laundering

Authorising third country insurance firms: has the Commission got it wrong?

maddockGeoff Maddock, partner

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By Geoff Maddock, corporate insurance partner

Commission view on authorisation

In July 2015 a Commission official expressed a controversial view on when third country insurance firms need authorisation. This was at a fully minuted meeting of the “Expert Group on Banking, Payments and Insurance”. The Commission said that a third-country insurance firm may only insure risks located in an EEA member State through a branch authorised by the competent supervisory authority of that member state.

I believe this opinion is wrong. If indeed it were right it would have a damaging effect on the London and probably other insurance markets. I give my reasons below. Continue reading

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Filed under Europe, Insurance, UK, UK Legislation, UK Regulations, Uncategorized

Market Abuse update – August 2015

The second quarter of 2015 saw continued regulatory focus on market and benchmark misconduct: the FCA and the US regulators imposed a series of record-breaking fines.  The FCA’s latest Board minutes refer to a strong pipeline of expected cases, and to delays resulting from some significantly more complex cases and from external factors. The Fair and Effective Markets Review (FEMR) has made strong recommendations for future conduct, regulation and enforcement in the fixed income, currency and commodity markets.  Continue reading

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Filed under Americas, Asia, France, Hong Kong, Italy, UK

Problems with unit-linked products

Unit-linked insurance products have recently given rise to a number of regulatory issues. These cover:

  • mis-selling;
  • the responsibility of the insurer on the one hand and the intermediary on the other;
  • the impact of Solvency II on the calculation of technical provisions;
  • the liberalisation of the classes of asset which these policies may link to;
  • in the absence of harmonisation of conduct of business rules, whose country’s rules apply to which products?
  • governance questions.

To find out more about these questions please read our e bulletin.

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Filed under Europe, European Regulation, FCA, PRA, Retail Banks, Uncategorized

UK: A record sentence for the SFO?

On 3 August, the UK’s Serious Fraud Office (SFO) secured a conviction on eight counts of conspiracy to defraud against a former trader.  He was sentenced to 9.5 years imprisonment in respect of the first four counts, each to run concurrently, and 4.5 years imprisonment for the next four, each to run concurrently to each other, but consecutively with the first four – a total of 14 years imprisonment.  Confiscation proceedings will be determined at a later date.    Continue reading

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Filed under Corporate Crime, UK

UK launches Financial Advice Market Review

On 3 August, the UK Government launched what it described as a major new review to examine how financial advice could work better for consumers.  The review will consider:

  • the “advice gap” for those who do not have significant wealth;
  • the regulatory or other barriers firms may face in giving advice and how to overcome them; Continue reading

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Filed under Banking, Consultations, FCA, HM Treasury, Insurance, Regulatory Reform, UK

Hefty fine as HK SFC steps up scrutiny of intermediaries’ compliance with self-reporting obligations

On 30 July 2015, the Hong Kong Securities and Futures Commission (SFC) announced that it had reprimanded and fined Nomura International (Hong Kong) Limited HK$4.5 million for failing to report significant misconduct by a former trader in a timely manner.

This case underlines and reinforces the importance of the self-reporting obligations contained under Paragraph 12.5 of the SFC’s Code of Conduct, which requires intermediaries to report misconduct and suspected misconduct to the SFC immediately upon discovery, not when they have concluded internal investigation or obtained legal advice on the matter.  It also reflects a broader global trend on the part of regulators in taking tough action in respect of firms who fail to be open and cooperative with their regulators. Continue reading

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Filed under Asia, China, Hong Kong

Ombudsman determinations, fraud and nemesis

Ombudsmen within the Financial Ombudsman Service (FOS) make decisions on complaints by customers of financial firms. An example of such a decision is an award of compensation for mis-selling of payment protection insurance. An ombudsman’s decision becomes final and binding when it is accepted by the complainant, who has the alternative option not to accept but to try again in the civil courts. There is usually no right to appeal.  Continue reading

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Filed under Insurance, UK Regulations, Uncategorized

UK: New pilots of streamlined procedures for claims in the main business courts

Two pilot schemes, the Shorter Trials Scheme and the Flexible Trials Scheme, will be introduced for claims commenced from 1 October and will run for a period of two years. The schemes allow for shorter and more flexible procedures for claims brought in the Rolls Building courts (including the Commercial Court, the Chancery Division and the Technology and Construction Court). The new Practice Direction governing the pilots (PD 51N) was published yesterday, following on from a consultation in May this year.

To read more from our Litigation team, click here.

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Filed under Banking, Commercial Litigation