London Update: UK Financial Services Regulatory Developments (March 2010)

This edition covers UK and EU developments between 1 February and 28 February 2010.

UK DEVELOPMENTS

SEC and FSA Announce Results of Strategic Dialogue Meeting

On 1 February, the Financial Services Authority (FSA) and the Securities and Exchange Commission (SEC) announced the results of a meeting held between Lord Turner and Hector Sants, Chairman and Chief Executive of the FSA respectively, and Mary Schapiro, SEC Chairman.

The announcement disclosed that the UK and US regulators discussed, among other matters: corporate governance and executive compensation; regulation of hedge funds and investment advisers and the protection of customer assets; disclosure regimes around client asset risks; market infrastructure, particularly relating to central counterparties for OTC derivatives; market supervision; and cooperation on cross-border supervision.

The regulators agreed that enhanced supervisory cooperation was crucial to market integrity. In order to facilitate expanding cooperation in areas such as oversight of credit rating agencies, hedge fund advisors and the clearing of OTC derivatives, they agreed to undertake a review of the current 2006 Memorandum of Understanding Concerning Consultation, Cooperation and the Exchange of Information Related to the Supervision of Financial Services Firms and Market Oversight.

According to FSA Chief Executive Hector Sants, "Global cooperation between regulators is central to tackling the reform agenda, and the relationship between the FSA and the SEC is key for international markets." SEC Chairman Schapiro said, "This dialogue has proved its utility again in allowing the SEC and FSA to share expertise and experiences regarding the rapid changes occurring in our capital markets."

Read more (www.fsa.gov.uk/pages/Library/Communication/PR/2010/021.shtml).

London Hedge Fund Manager Banned for Mismarking

On 3 February, the FSA announced that it had banned Simon Treacher, a London-based hedge fund manager, and fined him £140,000 for deceiving investors by mismarking funds he managed and misleading the FSA during its investigation.

Simon Treacher was an FSA approved person employed by BlueBay Asset Management plc as a senior fund manager in Blue Bay's emerging markets team. For a period of several months in 2008, he physically cut out and pasted different figures on to hard copies of documents used in the valuation process of assets of the funds he managed. Mr. Treacher then provided misleading information about his conduct to the FSA during its investigation.

The fraudulent alterations led to an apparent increase of approximately $27 million in the value of the funds in question. This resulted in investors being financially disadvantaged by approximately $650,000. The FSA stated that BlueBay had fully compensated the investors and that it made no criticism of BlueBay in connection with this investigation.

Mr. Treacher agreed to settle at an early...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT