On November 24, the Council of the European Union published a note (dated November 8, 2013) from the Council Presidency to Council Delegations which includes a UK issues paper on the fourth Money Laundering Directive (MLD4). The issues paper states that the UK welcomes MLD4, but notes certain points for discussion. In particular, the UK highlights the issue of beneficial ownerships of companies and misuse of trusts.
The UK suggests that central registries of company beneficial ownership would help to break through corporate secrecy and reveal who truly owns companies. To further this aim, the UK has pledged to make the UK’s central registry of company beneficial ownership publically accessible. The UK is also taking part in an automatic information exchange pilot with France, Italy, Spain and Germany in order to tackle tax evasion and the use of trusts for illegal purposes.
According to an EU press release, these issues were discussed at the November 2013 ECOFIN conference. Note. Press Release.
On November 26, the FCA published a speech made by the FCA Director of Supervision on the future of retail banking and the issues identified by the FCA.
In particular, the speech notes that banks must focus on rebuilding consumer trust, dealing with new and potentially threatening technologies, addressing changes in consumer behavior in light of technological developments and addressing issues such as misselling and building a stronger business model.
The speech also notes that the FCA intends to encourage a competitive market and urges banks to focus on evolving in a consumer friendly way. Speech.
On December 4, the European Commission announced that it had fined eight international banks a total of more than 1.7 billion for their participation in illegal cartels in markets for financial derivatives covering the European Economic Area.
Using the cartel settlement procedure, the Commission reached two separate decisions; one decision involved seven separate bilateral infringements relating to interest rate derivatives denominated in Japanese yen. The companies involved were UBS, RBS, Deutsche Bank, JPMorgan, Citigroup and RP Martin.
The other decision was made in relation to a collusion by four banks in relation to interest rate derivatives denominated in euro. The banks were Barclays, Deutsche Bank, RBS and Société Générale. Utilizing the Commission’s 2006 Leniency Notice, Barclays and UBS received complete immunity from fines. Announcement.
The UK Serious Fraud Office (SFO) has updated a webpage on its case relating to Sustainable Agroenergy plc and Sustainable Wealth Investments UK Ltd. These are the first charges to be brought by the SFO under the Bribery Act.
The SFO is investigating the activities of these and associated companies in connection with selling bio-fuel investment products involving Jatropha tree plantations in South East Asia. Webpage.
On November 20, the European Central Bank (ECB) published a speech given on November 18 by Yves Mersch, ECB executive board member, on the ECB’s perspective on current issues relating to the European banking union.
Among other things, Mr Mersch:
Considers the comprehensive assessment of banks in the single supervisory mechanism (SSM) that will be subject to direct ECB supervision;
states that the stress test, which forms part of the comprehensive assessment, will be conducted by the ECB over a period of three years, and that the ECB will use a baseline scenario and one stress scenario;
comments that the ECB is currently discussing internally the question of how exposure to government bonds should be valued; and
summarizes the ECB’s proposed supervisory approach to banks that will be subject to direct supervision (that is, banks deemed to be significant under the SSM Regulation (Regulation 1024/2013)) and to the other banks in the SSM.
The UK Prime Minister has stated that the UK will not participate in the SSM. Speech.
On November 20, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) published its report (dated November 19) on the proposed Directive on payment accounts.
The report contains a European Parliament legislative resolution on the proposed Directive on payment accounts, the text of which sets out suggested amendments to the European Commission’s original proposal, which was published in May 2013. Report.
On November 14, the European Commission published an updated document setting out its agenda and timetable for the legislative proposals and non-legislative acts related to financial services that it expects to adopt between November 1 and December 31. The most recent previous version of this document was the July 2013 update. Updated Document.
The Italy Regulatory Update is a quarterly newsletter which summarizes the main Italian and EC/EU law developments in the area of corporate, banking and financial services. To view the latest edition, please click here.
On November 14, the FCA published the final notice it has issued to Rahul Shah. The FCA’s statement is that Mr. Shah encouraged another person to engage in behavior which, had Mr. Shah engaged in that same behavior, would amount to market abuse (insider dealing) as per section 118(2) of the Financial Services and Markets Act (FSMA).
Mr. Shah has been prohibited by an FCA order from performing any function in relation to any regulated activities carried on by any authorized or exempt persons or exempt professional firm. In light of his financial position, no financial penalty was imposed on Mr. Shah.
The prohibition on Mr. Shah arises from the fact that he had agreed, while a broker, to be made an insider by a financial advisor acting on behalf of Vyke Communications plc. Final notice.
On November 7, the European Central Bank (ECB) updated its webpage on building a banking union to reflect the coming into force of the inter-institutional agreement (IIA). The ECB has agreed with the European Parliament on cooperation on procedures related to the single supervisory mechanism (SSM). The ECB also published a copy of the IIA, which will also be published in the Official Journal of the EU.
The UK Prime Minister has stated that the UK will not participate in the SSM. ECB webpage. IIA.
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