Weekly Financial Services Regulatory Update - Week To 21.02.14

This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FCA, the PRA, 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:

18 February 2014: PRA CP3/14 - Solvency II: recognition of deferred tax. The PRA has published Consultation Paper CP3/14 seeking views on a draft supervisory statement which sets out its expectations of firms in relation to the recognition of:

Deferred tax assets (DTA) on the Solvency II (SII) balance sheet The tax effects of the 1 in 200 shock loss on the capital requirement calculation The Solvency II regime permits a firm to recognise DTA and the tax effect of the 1 in 200 shock loss to the extent that it can demonstrate that it is "probable" that it will be able to benefit from them.

The consultation closes on 19 March 2014.

http://www.bankofengland.co.uk/pra/Pages/publications/solvency2recognitioncon.aspx

Discussion papers:

No new developments this week.

Policy statements:

No new developments this week.

Press releases:

17 February 2014: FCA wins case against Capital Alternatives. The FCA launched legal action in July 2013 in respect of two investment schemes, African Land (also known as Agri Capital) and Reforestation Projects (also known as Capital Carbon Credits). The defendants had structured schemes to try to avoid the need to be regulated by the FCA. However, the High Court agreed with the FCA that the schemes were unauthorised collective investment schemes (UCISs) and could not be lawfully operated by the defendants. The Judge has granted leave to appeal on certain aspects of the judgment so the FCA will have to wait until any appeal hearing and its outcome. As the court has ruled that the investment schemes are UCISs it may order the defendants to pay compensation that can be passed on to investors. The FCA has explained to investors in each of the schemes that they do not need to take any action at this stage regarding the FCA's case, as the previous undertakings and freezing orders we obtained in July 2013 remain in place for now.

Press release: http://www.fca.org.uk/news/fca-wins-case-against-capital-alternatives

Webpage for consumers: http://www.fca.org.uk/news/consumers/capital-alternatives-court-investment-schemes

17 February 2014: Yorkshire Building Society Group to refund GBP 8.4 million in arrears administration fees. Yorkshire Building Society Group (YBS), which includes the Yorkshire Building Society, Chelsea Building Society, Barnsley Building Society and Accord Mortgages has voluntarily agreed to refund all administration fees for mortgage arrears since January 2009, after the FCA raised concerns that some YBS customers had been charged incorrectly as a consequence of its procedures not being...