Financial Regulatory Developments (FReD) - May 3, 2013

Headlines

EuVECA and EuSEF Regulations published in OJEU ECJ allows proportionate national derogation from MLD Crime and Courts Act gets Royal Assent FCA finalises platforms rules FCA fines for poor AML controls FCA censures money transfer business EUROPEAN UNION AND INTERNATIONAL

European Commission (Commission)

EU derivatives group reports to G20: A group of EU derivatives regulators has published a report to G20 on the progress made on derivatives reform and the meetings the regulators have held with third country regulators. The report acknowledges both the importance of international cooperation and the difficulties of implementing identical global laws. It explains the measures regulators propose to take to deal with differences between national laws. (Source: EU Derivatives Group Reports to G20)

Contact: Rosali Pretorius or James Brennan

EuVECA and EuSEF Regulations published in OJEU: The Regulations on European Venture Capital (EuVECA) and Social Entrepreneurship (EuSEF) funds have now been published in the Official Journal of the European Union (OJEU) and will come into force on 22 July, the same day as the transposition deadline for the Directive on Alternative Investment Fund Managers (AIFMD). The Commission will be empowered to adopt delegated acts on various issues from 15 May. (Source: EuVECA Regulation and EuSEF Regulation)

Contact: Rosali Pretorius or Tom Harkus

Commission launches review of ESFS: The Commission is consulting, until 19 July, on the review of the European System of Financial Supervision (ESFS), composed of the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). The consultation covers:

the effectiveness and efficiency of the ESAs in accomplishing the tasks entrusted to them, including in relation to the single rulebook, consistent implementation of EU Acts, supervisory convergence and coordination, emergency interventions, and consumer protection and market integrity; the governance of ESAs, which is guided by the principles of independence and accountability; ESRB's warning and recommendations on systemic risks and ESRB's governance; cooperation and interaction between the ESAs and ESRB; and the structure of ESFS, with special consideration to the potential impacts of the single supervisory mechanism and to whether further adaptations are needed to the legal framework of ESFS. (Source: Consultation on the Review of ESFS)

Contact: Emma Radmore or Juan Jose Manchado

Commission consults on personal pensions: The Commission has opened a consultation on specific problems faced by consumers of third-pillar retirement products (personal private pension schemes). The consultative document considers how these products are already covered by existing or forthcoming EU legislation. It also asks whether consumer protection could be improved through voluntary codes coordinated at the EU level or an EU certification scheme, perhaps modelled on UCITS. The consultation is part of a broader initiative to develop a genuine Single Market for personal pension schemes. The consultation closes on 19 July. (Source: Consumer Protection in Third-Pillar Retirement Products)

Contact: Emma Radmore or Andrew Barber

European Parliament (EP)

Further delays to key voting dates: EP has delayed until 23 October the votes on the Key Information Document Directive (KID), the recast Insurance Mediation Directive (IMD2) and the Bank Recovery and Resolution Directive (RRD). Although the Council of the EU and EP reached preliminary agreement on the Mortgage Credit Directive (MCD) last week, EP's plenary vote to confirm its support to this agreement has been rescheduled for 2 July. The vote on the Directive on Criminal Sanctions for Market Abuse (CSMAD) has also been delayed until 22 October. (Source: OEIL File for KID, OEIL File for IMD2, OEIL File for RRD, OEIL File for MCD and OEIL File for CSMAD)

Contact: Emma Radmore or Juan Jose Manchado

EP wants FTT to finance EU budget: In the draft opinion to the Committee on Economic and Monetary Affairs (ECON) in EP, the Committee on Budgets proposes that the proceeds from collecting the Financial Transaction Tax (FTT) be used wholly or partly to finance the EU budget. It says that the Commission's FTT proposal meets most of the criteria for a genuine own resource: sufficiency, stability, visibility and simplicity, low operating costs, efficient allocation of resources and fair contributions. (Source: Draft Opinion on FTT by the Committee on Budgets)

Contact: Rosali Pretorius or Jeremy Cape

European Court of Justice (ECJ)

ECJ allows proportionate national derogation from MLD: ECJ has held the Spanish authorities were entitled to request information they considered relevant to the prevention of money laundering and terrorist finance from a bank that had no establishment in Spain. Jyske Bank, operating from Gibraltar under a services passport, refused to give the Spanish authorities certain know your customer and other information the authorities requested, saying that to do so would breach Gibraltar banking secrecy and it had duties to disclose information only to the Gibraltar authorities. The Spanish regulators cited Spanish law, which requires all credit institutions operating there to inform them of certain transfers, including the transfers in question. ECJ held that in principle such a law would be a restriction of the freedom to provide services, but that in this case it was proportionate for Spain to impose its law. It said the requirement was proportionate as it had the aim of preventing money laundering and terrorist finance and there were shortcomings in cooperation between national Financial Intelligence Units. (Source: ECJ Allows Proportionate Derogation from MLD)

Contact: Emma Radmore or Andrew Barber

UK PARLIAMENT AND GOVERNMENT

UK Parliament

Lords consults on risks to EU Single Market: The House of Lords has launched an enquiry, open until 24 June, on the impact that an increasingly integrated Eurozone, along the lines of proposals for a Genuine Economic and Monetary Union, would have for the wider Single...