Financial Regulatory Developments (FReD) - 18 October 2013

HEADLINES

UK and China hold Economic and Financial Dialogue SFO speaks on Bribery Act FCA consults on CRD 4 implementation FCA writes to firms on CRD 3 FCA speaks on wealth management COBS conference 15 November EUROPEAN UNION AND INTERNATIONAL

EU Legislation Tracker

Please follow the relevant link to see the European Parliament's (EP) "OEIL" voting date forecasts and access EP reports and positions on major legislative initiatives:

Bank Recovery and Resolution Directive (BRRD) OEIL file

Single Resolution Mechanism Regulation (SRM Regulation) OEIL file

Omnibus 2 Directive OEIL file

UCITS5 OEIL file

Money Market Funds Regulation (MMFR) OEIL file

Directive on European long-term investment funds (ELTIF Diretive) OEIL file

Central Securities Depositories Regulation (CSD Regulation) OEIL file

Recast Markets in Financial Instruments Directive (MiFID2) OEIL file

Markets in Financial Instruments Regulation (MiFIR) OEIL file

Market Abuse Regulation (MAR) OEIL file

Directive on Criminal Sanctions for Market Abuse (CSMAD) OEIL file

Fourth Money Laundering Directive (MLD4) OEIL file

Recast Insurance Mediation Directive (IMD2) OEIL file

Payment Accounts Directive (PAD) OEIL file

Key Information Document for Packaged Retail Investment Products Regulation (PRIPs Regulation) OEIL File

Review of the Payment Services Directive (PSD2) OEIL file

Contact: Emma Radmore or Juan Jose Manchado

G-20

G-20 Finance Ministers meet in Washington: In the statement released after their meeting in Washington, DC, the G-20 Finance Ministers and Central Bank Governors reiterated their commitment to building a safe and reliable financial system. They also announced efforts to facilitate domestic capital markets development and to implement the principles on long-term investment financing by institutional investors. (Source: G-20 Finance Ministers Statement)

Contact: Rosali Pretorius or Emma Radmore

Financial Stability Board (FSB)

FSB reports on data gaps: FSB and the International Monetary Fund have published their fourth progress report on the implementation of the G-20 data gaps initiative. The report notes the considerable progress made so far and outlines the strategy for the future. During 2014 work will continue on improving financial soundness indicators, international banking statistics, the coordinated portfolio investment survey and the international investment position. FSB will also be deciding on the template for global systemically important banks. (Source: Fourth Progress Report on the Implementation of the G-20 Data Gaps Initiative)

Contact: Rosali Pretorius or Andrew Barber

European Commission (Commission)

Commission to review Consumer Protection Cooperation Regulation: The Commission has launched a consultation, open until 31 January 2014, on the review of the Consumer Protection Cooperation Regulation. This Regulation provides mechanisms for mutual assistance between national authorities when tackling breaches of consumer protection legislation that involve at least two EU countries. (Source: Review of the Consumer Protection Cooperation Regulation)

Contact: Andrew Barber or Emma Radmore

European Insurance and Occupational Pensions Authority (EIOPA)

EIOPA publishes 2014 Work Programme: In its Work Programme for 2014, EIOPA says it will put a stronger emphasis on occupational pensions, as well as the technical standards and guidance due under Solvency 2. On the consumer protection front, EIOPA plans to continue work on personal pensions, comparison websites and consumer choice in the life insurance sector. During 2014 EIOPA will also carry out pan-European stress tests for the insurance sector. (Source: EIOPA Work Programme 2014)

Contact: Andrew Barber or Emma Radmore

Council of the European Union (Council)

Council approves SSM: The Council has adopted legislation creating a Single Supervisory Mechanism (SSM) for credit institutions in the Eurozone and other participating Member States. This follows the agreement reached with EP in trilogue negotiations earlier this year and EP's joint statement with the European Central Bank on the latter's accountability when acting as supervisor. The final text of the legislation will be published in the Official Journal of the EU and come into force soon. The SSM will be fully effective one year later. (Source: Council Approves SSM)

Contact: Emma Radmore or Juan Jose Manchado

Council publishes new SRM compromise text: The Council has published the latest compromise text tabled by its Presidency on the Regulation establishing a Single Resolution Mechanism (SRM) for the EU. (Source: Compromise Text for the SRM Regulation)

Contact: Rosali Pretorius or Andrew Barber

Agency for the Cooperation of Energy Regulators (ACER)

ACER organises REMIT briefing: ACER has organised a public meeting in Ljubljana on 7 November to discuss with stakeholders the implementation of the Regulation on Energy Market Integrity and Transparency (REMIT) and ACER's work in relation to it. (Source: ACER Organises REMIT Briefing)

Contact: Luca Salerno or Rosali Pretorius

UK GOVERNMENT AND PARLIAMENT

Government

UK and China hold Economic and Financial Dialogue: In their latest Economic and Financial Dialogue, the UK and China have announced several measures on financial sector development and regulation, including:

the UK regulators will consider applications from Chinese banks to set up branches in the UK to carry out wholesale banking activities; the renminbi Qualified Foreign Institutional Investor (RQFII) quota has been extended to the UK; both governments will work together on facilitating the growth of cross-border fund management activity; and China's National Association of Financial Market Institutional Investors will consider applications of foreign banks for underwriting bonds in China. (Source: Combined Policy Outcomes of the 5th China-UK Economic and Financial Dialogue)

Contact: Rosali Pretorius or Emma Radmore

Parliament

Banking bills continue in Parliament: The Financial Services (Banking Reform) Bill (the Banking Reform Bill) has had its second day in Committee Stage in the House of Lords. The third day will be on 23 October. The High Cost Credit Bill, a Private Members' Bill designed to impose further controls on high-cost credit companies (particularly payday lenders) in respect of amounts of high-cost credit available, levels of default charges, charges relating to continuous payment authorities and rollover or repeat lending, will continue its second reading in the House of Commons on 23 November. (Source: Financial Services (Banking Reform) Bill Progress and High Cost Credit Bill Progress)

Contact: Emma Radmore or Juan Jose Manchado

Bank of England (BoE)

BoE speaks on resolution: Speaking on solving the "too big to fail" problem at the annual membership meeting of the Institute of International Finance (IIF), Paul Tucker of BoE discussed the following points on planning for orderly resolution:

although most US banks could already be resolved using a top-down, group-wide approach through their holding companies, European banks will need reorganisation to make themselves susceptible to either a Single Point of Entry (SPE) or a Multiple Points of Entry (MPE) resolution strategy; few major groups will escape having to remove obstacles to effective resolution under their preferred strategy. For example, an SPE strategy means groups will need to have in place intra-group debt, issued by key subsidiaries around the world to the holding company, that can be written down when a distressed subsidiary would otherwise need to be resolved; for "MPE groups‟, many will need to reorganise their structures to create regional and functional sub-groups which could be subjected to SPE resolution; the bail in tool, which can be applied to any debt obligation, must be distinguished from mandated issuance of an...