FCA

Former Broker Banned by FCA for Encouraging Market Abuse

Posted on

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.

FCA Publishes Statement on Reporting Requirements of AIFMs

Posted on

On November 4, the FCA published a statement on reporting requirements for managers of AIFs (AIFMs) under the AIFMD.

In certain circumstances, firms already authorized as AIFMs will be required to provide regulatory reports to the FCA in the first quarter of 2014, using the XML v1.0 reporting template, which was published by ESMA in October 2013.

Further details on the reporting mechanism are due to be published on the FCA website in due course.  Statement.

FCA Factsheets on EMIR

Posted on

On October 28, the FCA published the following factsheets relating to EMIR (the Regulation on OTC derivatives, central counterparties and trade repositories) (Regulation 648/2012):

  • A factsheet for financial counterparties (FCs) subject to the EMIR requirements for timely confirmation and bilateral risk mitigation; and
  • A factsheet for non-financial counterparties (NFCs) subject to EMIR to understand how NFCs are defining their hedging activity and monitoring their status against the clearing threshold between June and September 2013.

FCA Second Consultation on Implementing CRD IV For Investment Firms

Posted on

The FCA published a second consultation paper on proposals to implement CRD IV for investment firms (CP13/12).  CRD IV is a package of major reforms to EU legislation on prudential requirements for credit institutions and investment firms.  The effect of the reforms will be to replace the existing CRD with a regulation (the CRR) and a directive (the CRD IV Directive).

In CP13/12, the FCA consults on proposals applying to investment firms that are currently subject to the Capital Requirements Directive (2006/48/EC and 2006/49/EC) (CRD), and to management companies (as defined under the UCITS Directive (2009/65/EC) (UCITS IV) and alternative investment fund managers (AIFMs).  Second Consultation Paper.

ICAP Fined £14 Million by FCA

Posted on

The FCA has fined broker ICAP Europe Ltd £14 million for misconduct regarding the London Interbank Offered Rate (LIBOR), according to the final notice published by the FCA on September 25.

ICAP was found to be in breach of Principle 3 (management and control) and Principle 5 (market conduct) of the FCA’s Principles for Businesses.  According to an FCA press release, ICAP is the first broking firm to be fined for LIBOR-related failings.  Final Notice.  Press Release.

FCA Updates AIFMD Information for Depositories

Posted on

On September 23, the FCA provided updated information on its dedicated AIFMD webpage for firms applying for authorization (or variation of permission) to act as a depository or trustee of an alternative investment fund.

The guidance highlights rule 3.11.26 in the FCA’s Investment Funds sourcebook (FUND), which states that a depository cannot delegate its functions to a third party (except, in certain conditions, for the safekeeping of assets), which the FCA considers to be any party that is not part of the same legal entity as the applicant.  Webpage.

FCA Chief Executive Speaks at ISDA Conference on Reform of the International Derivatives Market

Posted on

The FCA has published a speech made at a conference held by ISDA in London by the Chief Executive of the FCA, Martin Wheatley, on reform of the international derivatives market.

The speech focused on the “final delivery stage” of reforms in this area.  Martin Wheatley commented that the details on which regulators are currently focusing “happen to be some of the most important facing the derivatives industry.”

The key issues under consideration were the extent to which financial regulators exert influence across international markets, the issue of the broader recognition of equivalence between international regimes, the collateralization of bilateral derivatives, EMIR implementation and benchmarking.  Speech.

FCA Publishes FAQs on Passporting Under AIFMD

Posted on

On August 27, the FCA published a new webpage setting out frequently asked questions (FAQs) on passporting arrangements under the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD).

The FAQs are designed to help firms and their advisers with the passporting process.  The questions discuss: (i) identification of the competent authority; (ii) authorization as a manager of an AIF; and (iii) continuation of use of UCITS passports in relation to UCITS business.  Webpage.

FCA Publishes Final Guidance on Oversight of Member Controls by RIEs and MTFs

Posted on

Following its consultation in April, on August 22, the FCA released its final guidance on the oversight of member controls carried out by recognized investment exchanges (RIEs) and firms operating multilateral trading facilities (MTFs).

The guidance discusses the “risk based” and “proactive” approach the FCA expects RIEs and MTFs to take to ensure ongoing oversight of the systems and controls which their member firms operate to comply with the RIE’s or MTF operator’s rulebook.  Guidance.

FCA and SEC Publish a MoU on Investment Fund Supervision

Posted on

The FCA and the SEC published a memorandum of understanding (MoU) on July 19 on the supervision of the asset management industry, which came into force on July 22.

The accompanying press release states that the MoUs were concluded with 25 European Union (EU) and 3 European Economic Area (EEA) member-state regulators.  They provide a framework for supervisory cooperation and exchange of information between the SEC and the EU/EEA member state national regulators in the asset management industry, as part of a long-term strategy to improve the oversight of entities in the industry that operate across national borders.

In May 2013, the European Securities and Markets Authority (ESMA) announced that it had approved cooperation agreements between EU regulators with responsibility for supervising Alternative Investment Funds (AIFs) and 34 of their global counterparts, including the SEC.  These agreements are key in allowing the national regulators to monitor the way non-EU AIFMs comply with the AIFMD.  Memorandum of Understanding.  Press Release.