After a relatively quiet start to the year on the enforcement front, the FCA published three notable Final Notices in June 2020. All relate to areas which have been a focus for the FCA for some time: the fair treatment of customers experiencing financial difficulty (especially important in light of Covid-19); AML controls; and ensuring timely and accurate market disclosures. Financial services group fined £64m for failures in mortgage arrears handling On 11 June 2020,…

On 8 July 2020, the European Securities and Markets Authority updated its Q&As on the Regulation on improving securities settlement in the EU and on central securities depositories. Part III of the Q&As dealing with settlement discipline have been updated with the addition of a new item in Q&A 7 dealing with buy-in timeframes. The new item provides an answer to the following question: According to Articles 26, 27(1), 28, 29(1), 30 and 31(1) of…

On 8 July 2020, the European Central Bank (ECB) issued guidance on the definition of the materiality threshold for banks that are directly supervised by Member State national competent authorities (NCAs). The guidance specifies how NCAs shall exercise the discretion conferred on competent authorities under Article178(2)(d) of the Capital Requirements Regulation in relation to less significant institutions with regard to the threshold for assessing the materiality of credit obligations past due, irrespective of the method…

On 8 July 2020, the Islamic Financial Services Board (IFSB) issued two statements addressing the implications of the COVID-19 pandemic on certain elements of Islamic banking and Islamic capital markets. The statement on Islamic banking aims to clarify the treatment of payment moratoriums, the expected credit loss approach and profit sharing investment accounts in-line with Shar’iah rules and principles and guidance issued by the IFSB as well as other international standard-setters. The objective of the…

On 8 July 2020, the European Securities and Markets Authority updated its Q&As on MiFIR data reporting. A new Q&A in the transaction reporting section has been added dealing with algorithmic trading. The new Q&A answers the following question: Consider a scenario where an Investment Firm A executes a reportable transaction through an execution algorithm provided by another Investment Firm B. a) How should field 59 (Execution within firm) of RTS 22 be reported when…

On 8 July 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the European Market Infrastructure Regulation (EMIR). ESMA has updated Trade Repository Q&A 11(b) clarifying that the counterparties should follow their local time and the relevant calendar of their Member State to specify the “working day” in the context of determining the deadline for reporting under EMIR. This clarification should be applied even if the two counterparties to the same derivative…

On 1 July 2020, UK Finance, which represents over 250 firms across the banking and finance industry, published a paper on managing cyber incidents, designed to assist firms in thinking about their response plans. The paper emphasises the importance of firms being able to action an effective response to a cyber-attack and key takeaways include: Plan: Firms should plan for ‘severe but plausible disruption scenarios’, as stated by the Bank of England, PRA and FCA.…