Regulatory Update: UK Edition – May 2021

      This edition includes – FCA Updates Statement on the Operation of MiFID Markets Regime, EBA Consultation on Proposal for a Central AML/CTF Database and FCA Fines Sapien Capital Limited for Risk of Facilitating Fraudulent Trading and Money Laundering.

      FCA Updates & Developments

      The FCA has updated its webpage concerning changes to regulatory reporting during coronavirus. The update provides firms with flexibility in the submission of FIN-A (annual reports and accounts). Firms will automatically be granted a two-month extension to the deadline for submission up to and including 31 July 2021.

      The extension is intended to support those firms that have had their reporting obligations impacted by COVID, and not intended to be a blanket extension. If firms are able to submit the FIN-A on time, they should continue to do so.

      If you would like support or advice regarding your regulatory reporting, including outsourcing your regulatory reporting to CCL Compliance, then please contact us.

      The FCA has updated its webpage concerning its statement on the operation of the Markets in Financial Instruments Directive (‘MiFID’) markets regime. The update includes published non-equity transparency results in the UK covering the 2021 annual bonds threshold assessment, the May 2021 bonds liquidity determination and the 2021 annual derivatives threshold and liquidity assessment.

      The FCA has updated its webpage to announce that it has moved to a new data collection platform, RegData. The new platform has replaced Gabriel and all 52,000 supervised firms will now be required to submit its regulatory submissions via RegData.

      If you would like support or advice regarding your regulatory reporting, including outsourcing your regulatory reporting to CCL Compliance, then please contact us.

      The FCA has updated its webpage on its statement on handling complaints during coronavirus. The statement has previously provided clarify on the FCA’s approach towards firms handling complaints during COVID-19. The update provides that as of 1 May 2021, the statement is no longer in effect.

      To see how CCL Compliance’s compliance technology can help you manage, record and report on complaints, please contact us for a demo.

      The FCA has updated its webpage regarding a change of legal status for authorised firms. The FCA sets out, from 1 June 2021, it will no longer be accepting change of legal status applications. Firms which are considering a legal status change must submit a new authorisation application and cancel its existing permissions among other requirements.

      For guidance and advice regarding changing legal status, authorisations or variations or permission, please contact us.

      The Financial Services Regulatory Initiatives Forum has updated its 24-month regulatory initiative outlook. The regulatory initiatives grid is a useful tool to set out the forthcoming regulatory changes that may impact your business here in the UK.

      For guidance and advice regarding regulatory change, please contact us.

      PRA Updates & Developments

      The PRA has published its Business Plan for 2021/22. The plan sets out the PRA’s workplan for each of its strategic goals alongside an overview of the PRA’s budget for the period March 2021 – February 2022. The plan also sets out in detail, the actions to mitigate the impact of the coronavirus on regulated firms.

      EU Regulatory Updates

      The European Banking Authority (‘EBA’) has published a consultation on a draft Regulatory Technical Standard (‘RTS’) on a central database for anti-money laundering and countering the financing of terrorism (‘AML/CTF’). The database will serve as a key tool to lead, coordinate and monitoring AML/CTF efforts.

      The draft RTS specifies the definition and the materiality of weaknesses identified by competent authorities and how much information is to be communicated to the EBA. In addition, how the EBA will analyse and disseminate the data is also provided.

      Financial Crime

      Transparency international has published a report on measuring the effectiveness of Anti-Bribery and Corruption (‘ABC’) programmes. The report focuses on why and how companies can measure effectiveness and how to deploy resources in appropriate areas.

      Some of the key recommendations include the following:

      • Test whether the training provided is working
      • The use of whistleblowing should be analysed
      • Gifts and Entertainment data should be analysed
      • Employee culture surveys should be conducted
      • Internal and external audit to access effectiveness
      • Assess the effectiveness of third party programme
      • Investigate root causes and control failings

      For any advice and support in relation to your firm’s ABC requirements, please contact us.

      The Joint Money Laundering Steering Group (‘JMLSG’) has published a consultation of the proposed text to its trade sector (sector 15). The proposed changes include clarification into the definition of trade finance products/services and how they may be used to facilitate global trade.

      To discuss any element of your AML framework requirements, please contact us.

      Enforcement Action

      The FCA has fined Sapien Capital Limited for failings which led to the risk of facilitation fraudulent trading and money laundering. This is the FCA’s first case in relation to cum/ex trading, dividend arbitrage and withholding tax reclaim schemes.

      Sapien was found to have failed to have in place adequate systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to business introduced by the Solo Group.

      In addition, Sapein failed to exercise due skill, care and diligence in applying AML policies and procedures and failing to monitor and assess the risk of financial crime.

      The firm agreed to resolve all issues and entered a focused resolution agreement qualifying for a 30% discount. The amount was further reduced from £219,000 due to the firm’s serious financial hardship.

      CCL Compliance has decades of international experience in assessing money laundering risk and frameworks. To confidentially discuss any requirements in relation to AML, please contact us.

      Previous post Next post

      More like this

      Regulatory Update: UK Edition - March 2021

      This edition includes - FCA Launches Campaign to Encourage Individuals to Report Wrongdoing, PRA Publishes Statement on Expectations to Outsourcing…
      Read more

      Regulatory Update: UK Edition - April 2021

      This edition includes - FCA Consults on New UK Prudential Regime for MiFID Investment Firms, PRA Publishes Consultation Paper to…
      Read more

      Regulatory Update: UK Edition - June 2021

      This edition includes – FCA Updates & Developments including FCA Updates Authorisation Webpage for Change of Legal Status, PRA Statement…
      Read more

      Regulatory Update: UK Edition - July 2021

      This edition includes – FCA agreements with overseas regulators, PRA proposal to make changes to policy on designated investment firms,…
      Read more

      Regulatory Update: UK Edition - August 2021

      This edition includes - FCA consultation paper on new UK Prudential Regime for MiFID investment firms, ESMA Q&As, SFO charges…
      Read more

      Regulatory Update: UK Edition - September 2021

      This edition includes - FCA publishes draft guidance to allow faster removal of regulatory permissions, PRA consultation paper on identification…
      Read more