Weekly Financial Services Regulatory Update - Week To 30.11.12

This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FSA, the UKLA, the Upper Tribunal, the Financial Ombudsman Service and the London Stock Exchange over the past week, with links to the full documents where these are available.

We hope that you will find this update useful.

Consultation papers:

29 November: Regulatory reform FCA Handbook: FSA consults on FCA supervision and threshold conditions, and statement on FCA's new power of direction over qualifying parent undertakings.

The FSA has published a consultation paper (CP12/34) on updates to the FCA Handbook. The proposals set out:

The FCA's new supervisory model in a revised version of chapter 1 of the Supervision Manual (SUP) Amendments to chapter 7 of SUP covering when the FCA will exercise its own initiative powers to vary or impose requirements or limitations on firm's permissions Amendments to the Threshold Conditions sourcebook to reflect the new FCA threshold conditions to be introduced by the Financial Services Bill The consultation paper also seeks comments on a draft version of the FCA's statement of policy on its approach to its powers of direction over certain unregulated holding companies, as required by the Bill. The deadline for comments is 29 January 2013 and the FSA hopes the proposals will be in place for when the new regulators acquire their legal powers in 2013.

http://www.fsa.gov.uk/library/policy/cp/2012/12-34.shtml

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

26 November: FSA publically censures Capita Financial Managers Ltd for CF Arch cru funds failings.

The FSA has published the Final Notice it issued to Capita Financial Managers Ltd (Capita) (dated 13 November) alongside a press release publically censuring Capita for failings relating to the CF Arch cru funds. Capita breached Principles 2 (skill, care and diligence) and 3 (management and control) of the FSA's Principles for Businesses (PRIN) as well as rules in the Collective Investment Schemes sourcebook.

Capita is the Authorised Corporate Director of the CF Arch cru funds and in July 2006 delegated this responsibility to a third party, Arch Financial Products (Arch). Capita failed in aspects of its oversight of Arch in that it failed to ensure it had sufficient processes in place to monitor Arch and as a result failed to effectively discharge its regulatory obligations to investors.

The funds were suspended in March 2009...