FCA finalised guidance for payments firms: safeguarding customer funds and Covid-19

The FCA recently issued its finalised guidance for payments and e-money firms on safeguarding customer funds and Covid-19. The guidance is designed to mitigate, in the short-term, concerns that some firms are not complying with the Payment Services Regulations 2017 (PSRs) and Electronic Money Regulations 2011 (EMRs) safeguarding rules in the way the FCA expects. It is also designed to help prevent potential harm to customers in the event of insolvencies caused by Covid-19.

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Pressure Points: Covid-19 and Fraud

Covid-19 restrictions are being slowly eased, but the impact of the pandemic and related lockdown measures on financial crime risk and on related compliance measures continues to be a high priority for business. In our April briefing, we analysed the impact of the restrictions on the UK criminal justice system – in particular, the practical issues facing law enforcement agencies (LEAs), the courts and the prison service.  Continue reading

First steps taken on new UK prudential regime for investment firms

On 23 June 2020, the FCA published its long-awaited Discussion Paper on a new prudential regime for MiFID investment firms, to be based on the EU Investment Firms Directive and Regulation (“IFD” and “IFR” respectively), which are due to be implemented in June 2021 (see our blog post).

On the same date, HM Treasury published a related Policy Statement on prudential standards in the Financial Services Bill, which complements and sets the parameters for the FCA’s approach as outlined in the Discussion Paper. Continue reading

IOSCO proposes updated Outsourcing Principles as Covid-19 drives operational resilience to the top of the agenda

Having initially delayed its planned consultation exercise to allow the financial services sector to focus on responding to Covid-19, the International Organization of Securities Commissions (IOSCO) subsequently found the pandemic a catalyst to proceed. Therefore, at the end of May, IOSCO launched its consultation on proposed updates to the 2005 Outsourcing Principles for Market Intermediaries and the 2009 Outsourcing Principles for Markets; feedback on the proposed new Outsourcing Principles (OPs) is requested on or before 1 October 2020. The decision to proceed reflects the acknowledgement that outsourcing is a key element for consideration when assessing operational resilience across the sector.

This post gives a high level summary of the consultation, with a link to our briefing that focuses in more detail on: the scope of application; IOSCO’s definition of outsourcing; intragroup arrangements; concentration risk; and access and audit rights. To provide additional context to IOSCO’s proposals, the associated briefing also catalogues relevant proposals and initiatives which are running concurrent to the consultation exercise.

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Megan Butler on the FCA’s response to Covid-19 and expectations for 2020

On 4 June 2020, Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered a speech on the FCA’s response to Covid-19 and expectations for 2020.

Addressing a virtual audience at PIMFA’s Virtual Festival, Ms Butler explored the FCA’s priorities and longer-term expectations, in particular for the wealth management and advice industry. Continue reading

FCA to carry out a survey of firms’ financial resilience

The FCA has announced that it will be surveying the financial resilience of around 13,000 firms from across 15 sectors. Between the 4 and 8 June 2020, firms will be sent a short survey by email to complete. In her speech at the PIMFA Virtual Festival, Megan Butler,  Executive Director of Supervision – Investment, Wholesale and Specialists, advised that firms will be given seven days to respond to the survey. The survey is intended to help the FCA better understand the effects that the Covid-19 pandemic is having on the finances of the firms it regulates and better guide its supervisory actions.

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