Posts by: Luke Steele

CMA Publishes Finalized Versions of Regulated Payment System Appeals Rules and Guide


On August 18, 2017, the Competition and Markets Authority (“CMA“) published the final version of its rules of procedure (CMA65) which governs appeals made under section 79 of the Financial Services (Banking Reform) Act 2013 (“FSBRA“) in respect of certain decisions made by the Payment Systems Regulator (“PSR“) under the same Act.

The FSBRA states that, in relation to decisions made by the PSR that:

  • require the granting of access to a payment system; or
  • require the variation of certain agreements relating to payment systems; or
  • require a person who has an interest in the operator of a regulated payment system to dispose all or part of that interest;

these can be appealed to the CMA by any person who is affected by the decision.

This ground is broad, and so the CMA will only allow appeals where it is satisfied that the PSR’s decision was wrong on the basis that:

  • the PSR failed properly to have regard to, or give appropriate weight to, the matters the PSR must have in regard to carrying out its functions under Part 5 FSBRA; or
  • the decision was based, either wholly or partly, on an error of fact or;
  • the decision was wrong in law.

Under the rules of procedure, any person who wishes to make an application to appeal a decision must first send a notice, marked “Notice of Payment Systems Appeal,” directly to the CMA within the two months following the date the appellant was notified of the decision or the date of publication of the decision (whichever is earlier). The CMA also has discretion to extend the two month time period where it concludes that there were exceptional circumstances for any appeal beyond this time.

To see the full draft of the rules, please click here.

ECB Publishes Interview Transcript on the Preparatory Work of Banks and Supervision as a Result of Brexit


The European Central Bank (“ECB“) has published a transcript of an interview, given by Sabine Lautenschlager (ECB Executive Board Member and Supervisory Board Vice-Chair), on the kind of preparation affected banks will have to undertake following the UK’s decision to leave the European Union. The interview is wide ranging, but includes the following pertinent points:

  • The ECB wants euro-area banks to be proactive and well prepared and is currently in discussion with all euro-area banks under its supervision that will be affected by Brexit.
  • The ECB has suggested that all affected banks should prepare for a hard Brexit. It has also recommended that all affected banks create their strategies for Brexit quickly and pass these on to the ECB, as they only have an extremely narrow time frame in which to assess plans and applications.
  • The ECB has itself set up a project to prepare for Brexit. It will need to increase its staff as it expects a significant increase in the number of internal model applications, qualifying holding procedures and licensing applications.

To see the full interview, please click here.

European Parliament Will Consider Money Market Fund Regulation in April 2017 Plenary Session


The European Parliament has announced that it will consider the MMF regulation during its upcoming plenary session, currently scheduled to be held April 3-6, 2017.

The MMF regulation is intended to introduce new framework requirements to more effectively regulate money market funds, as well as increase their stability and general liquidity. In particular, the regulation (introduced by the European Commission) is intended to more tightly regulate the shadow banking sector.

The plenary session will allow debate and potential amendment to the scope of the MMF regulation.

European Parliament Publishes Report on Fifth Money Laundering Directive Proposal


On March 9, 2017, the European Parliament published a report on the Fifth Money Laundering Directive (MLD5), this being the same report adopted by the Parliament’s Economic and Monetary Affairs Committee (ECON), as well as Parliament’s Civil Liberties, Justice and Home Affairs Committee (LIBE).

The report focuses on draft EP legislation resolutions and also contains opinions from the Committee on Legal Affairs (JURI), Development (DEVE) and International Trade (INTA).

Following publication of the report, the EP must now permit MEPs to start discussions with the European Commission and the Council to begin the process of amending and potentially implementing the directive so that it can be integrated by Member States.

EPC Publishes Updated White Paper on Mobile Payments in the SEPA


On March 7, 2017, the European Payments Council (“EPC“) published version 5 of a white paper that evaluates mobile payments across Single Euro Payments Area (“SEPA“). The white paper, the result of a collaborative effort between the EPC and expert groups in the area, is designed to help evolve an integrated payment market across the SEPA. It focuses primarily on mobile remote payments and mobile proximity payments and suggests ways in which these could improve in order to further support and develop SEPA card payments and credit transfers, for businesses and consumers alike.

It is the intention of the EPC to further consult industry bodies in order to develop interoperability between different mobile payment systems, to then be used by all interested parties.

Transparency International Publishes “Top Secret: Countries Keep Financial Crime Fighting Data to Themselves”


On February 15, 2017, Transparency International (“TI“) published the above report, recommending that national authorities engage to a greater level in making public disclosure of their countries’ anti-money laundering (“AML“) statistics.

TI’s report investigated leading EU nations (notably the UK, France, Italy and Germany) as well as the U.S. and found, in particular, that AML work was only partially available as a matter of public record and that it was largely only available from international AML institutions, rather than by any national bodies themselves.

TI made a number of recommendations in its report, chief among them being a desire to see the publishing of yearly AML statistics as a standard recommendation by international AML institutions such as the Financial Action Task Force (FATF).

Vladis Dombrovskis Gives Speech on the International Financial System


The European Commission has published a speech given by Vladis Dombrovskis, European Commissioner for Financial Stability, Services and Capital Markets Union, on February 10, 2017. Amid general concerns about the state of both European and international financial regulation, Mr. Dombrovskis placed emphasis on cooperation among international financial communities in finding a holistic and common approach to financial regulation. Mr. Dombrovskis stressed, in particular, the importance of a common standard of financial conduct, suggesting that the creation of low‑level regulations in one country with little oversight could trigger a contagion affect across other countries, therefore bringing fundamentally inadequate regulatory framework across the globe.

On this latter point, Mr. Dombrovskis highlighted what he thought might be the impact of different financial epicenters (notably New York, Paris, London and Frankfurt) having widely divergent rules. In particular, Mr. Dombrovskis thought this would create far greater scope for varying financial institutions to engage in regulatory arbitrage and would in fact cause the same institutions further costs to comply with each jurisdiction’s different rules.

In concluding, Mr. Dombrovskis stressed that international cooperation in the area was vital and should at present underpin the ever-evolving relationship between the UK and the EU.

Find the speech here.

European Parliament Publishes Provisional Version of Resolution It Has Adopted on Its 2016 Report on Banking Union


The European Parliament has published a draft of the text of the resolution it has adopted on its annual report on banking union. The Parliament’s resolution is divided into themes, these being resolution, supervision and deposit insurance. The Parliament notably encourages all states that have yet to join the Euro currency to do so or to join the banking union, so as to align the internal market with the same.

It also expresses concern at the growth of the shadow banking sector and highlights that the UK’s Brexit referendum result now requires a substantive assessment of EU-wide financial supervision, with particular focus on ensuring that exit negotiations played out between the two parties should not lead to an uneven playing field between non-EU and EU financial institutions. In particular, the Parliament stands by the current levels of regulation and suggests that the exit vote and negotiations should not be used to generally promote deregulation of the financial markets across the EU as this may have dire economic consequences internationally.

The resolution can be found here.

European Commission Publishes Consultation Paper on Capital Markets Union (CMU) Mid-Term Review


The European Commission published a paper (dated January 20, 2017) requesting feedback and general input on revisions to the CMU action plan. The original action plan was published in September 2015 and set out the Commission’s proposals for the establishment of the CMU.

The European Commission wishes to publish a mid-term review of the action plan by June 2017, with the review being set up to look at any progress in implementing the CMU action plan and amend accordingly, dependent on responses.

The deadline for such responses is March 17, 2017, upon which the Commission will evaluate all responses and produce a feedback assessment.

The Commission has also promised to hold discussions with relevant stakeholders, notably small and medium enterprises and other institutional investors.

The Commission seeks views from any relevant stakeholders on the action plan – in particular, it seeks views on any relevant revisions to the same on actions that could, inter alia:

  • Assist in allowing companies to raise capital on public markets (and enter those markets)
  • Create sustainable investment and long-term infrastructure, as well as foster retail investment and cross-border investment

Solidify the capacity of banks to support the economy

ESMA Publishes Opinion on the Effect of Excluding Fund Managers From the Scope of MiFIR Intervention Powers


On January 12, 2017, the ESMA published an opinion on the impact of exclusion of fund management from the entire scope of MiFIR (Markets in Financial Instruments Regulation) (Regulation 600/2014).

Although, under Articles 40 and 42 of MiFIR, the ESMA and other NCAs (national competent authorities) can prohibit and restrict the sale, marketing and/or distribution of specific financial instruments or shares in Alternative Investment Funds (AIFs), this power applies only to credit institutions and MiFID firms and excludes from its scope any alternative investment fund managers that might be authorized under the AIFM Directive (2011/61/EU) or to UCITS management companies so authorized under the UCITS IV Directive (2009/65/EC).

The ESMA has commented with the opinion that the intervention powers within MiFIR may create arbitrage situations between fund management companies themselves, as well as between fund management companies and MiFID firms. It has also stated that both the ESMA and relevant NCAs should be given the power to apply the restrictions under MiFIR directly to fund management companies.