HM Treasury (“HMT”) has published a consultation launching the second phase of the Future Regulatory Framework (FRF) Review (the “Review”). The purpose of the Review, which began in 2019, is to explore how the UK’s regulatory framework for financial services needs to change in order to be fit for the future, particularly in light of the UK’s exit from the EU. The aim is to achieve an agile and coherent approach to financial services regulation in the UK, with appropriate democratic policy input to support “a stable, innovative and world leading FS sector”.
HM Treasury has announced two consultations on possible changes to the UK financial promotions regime:
- a consultation on limiting the scope of firms that can approve financial promotions of unauthorised persons; and
- a consultation on extending the financial promotions regime to include unregulated cryptoassets.
The deadline for responses to both consultations is 25 October 2020.
These consultations reflect the continued focus by the Financial Conduct Authority (FCA) on marketing and the related risks to consumers, particularly following the mini-bond scandal, as well as the continued focus on the regulation of fintechs and cryptoasset technologies. Continue reading
On 29 October Lord Sharkey introduced a Private Members’ Bill into the House of Lords, which proposed amending the Financial Services and Markets Act 2000 (“FSMA“) to empower the FCA to introduce a duty of care owed by authorised persons to consumers in carrying out regulated activities under FSMA (the “Bill“).
The Bill proposed that a duty of care be defined as an obligation to exercise reasonable care and skill when providing a product or a service.
First published on Thomson Reuters Regulatory Intelligence on 15 July 2019.
This third article of a series on cryptoassets focuses on personal account dealing (PAD) policies and procedures. This topic is important not only for firms themselves but also for individual staff who have entered into or are considering entering into cryptoasset transactions on their own behalf.
On 17 July 2018, the FCA published a paper on its Approach to Consumers (the Approach), accompanied by a discussion paper DP18/5 (the DP) on the possible introduction of a new duty of care and other alternative approaches (a New Duty).
The Approach sets the FCA’s vision for well-functioning markets that work for consumers, and builds on the November 2017 consultation on its Future Approach to Consumers. The aim is to provide greater transparency on when and how the FCA will act to protect consumers, its policy positions on key issues, and its strategy for ensuring that it advances its consumer protection objective with the greatest impact. For our full briefing on the matter, please click here.
In a judgment highly anticipated by firms and their senior managers as well as the regulators, the Supreme Court has overturned decisions of the Court of Appeal and Upper Tribunal, holding in FCA v Macris  UKSC 19 that Achilles Macris was not identified in certain enforcement notices and therefore was not entitled to third party rights.
The Court has stayed a trial of a prosecution case, brought by the FCA in respect of a land banking scheme involving an alleged £5m fraud, on the basis that, as a result of legal aid cuts, there was no realistic prospect that the defendants could secure legal representation for the trial date which had been set. The Court described the effort put in by the defence to find trial advocates as “very substantial indeed”. It was common ground that the five defendants could not receive a fair trial unrepresented. Continue reading
In the years preceding the financial crisis, more and more private clients began to invest in increasingly complex and riskier financial products in the search for yield.
Following the subsequent market turmoil, those investors have sought to recover their losses from the firms by whom they were sold the products. Investors commonly claim they had not understood the complex products in which they had invested, that they were, as a recent judgment put it, “led by the nose like a lamb” into investments far too risky for financial ingénues like themselves. Continue reading