Exams

If your firm has set the Investment Management Certificate as an exam determinant in connection with SYSC5.1 (“A firm must employ personnel with the skills …” etc.) then a reminder that there are changes in hand (of course, if you are a retail firm then TC App 1.1 will determine [...]

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CASS Consultation Paper

The FSA has released Consultation paper CP10/9 – “Enhancing the Client Assets Sourcebook”. Proposals include greater transparency requirements by UK authorised prime brokers (‘PBs’) in respect of re-hypothecation provisions by way of a summary annex (the CP refers to “… sophisticated clients’ lack of understanding …”). Additionally PBs will have [...]

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US and Investment Advisors

There have been further developments in respect of the proposed Private Fund Investment Advisers Registration Act 2010 (see Regulatory Roundup 18 January and previous). Senator Christopher Dodd’s financial reform proposals passed the Senate Committee on Banking on 23 March with a 13-10 vote, without a single Republican voting for it. [...]

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FAIF

The acronym arises from the publication of PS10/3 – ‘Funds of Alternative Investment Funds’. A FAIF will allow (albeit indirectly) the marketing to, and investment by, retail clients in hedge funds. A FAIF will fall within the NURS (‘non-UCITS retail scheme’) regime so it will be an authorised fund – [...]

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Shorting

CESR has presented a report to the European Institutions that recommends the introduction of a pan-European short selling disclosure regime. There are two distinct differences between the existing disclosure requirements in MAR 1.9 and the new CESR Proposals. Firstly, in MAR 1.9, the short selling disclosure requirements apply only to [...]

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Financial penalty setting

In keeping with the FSA’s ‘credible deterrence’ approach, it has published PS10/4 – ‘Enforcement financial penalties’ – with a view to establishing a consistent and more transparent framework for the calculation of financial penalties. The associated press release states that as a result enforcement fines could treble in size. A [...]

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ICAAP Submissions

The FSA has issued a paper setting out its observations on ICAAP submissions that have been submitted by Limited Licence firms. Areas commented on include: Lack of clarity in terms of presentation of key information Insufficient analysis of wind-down costs Firms need to demonstrate that the ICAAP is integrated into [...]

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Financial Risk Outlook

Somewhat later than usual the FSA has published its 2010 Financial Risk Outlook. The FSA’s 2010/11 Business Plan (‘BP’) will follow in the next few days. It should cover the period 1/4/10 to 31/3/11, although page 73 of the FRO does refer to 2011/12. The purpose of the FRO is [...]

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Digestif

And to round off a heavy FRO 2010 the FSA recommend the Asset Management Sector Digest 2010. There are nine key messages in the publication, four of which are deemed ‘priority risks’ being: Controls over client money and assets; The valuation of assets in funds; Platforms; and (of course) The [...]

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ONA

The Regulatory Roundup of 16 October 2009 contained an article on the new FSA reporting system – Online Notifications and Applications – which would be used for the submission of applications/notifications re: Approved Persons; Appointed Representatives; Variations of permissions; Passports; Cancellations; Waivers; and Standing Data. Mandatory use of ONA was [...]

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Radar & Smaller Firms

At the same seminar mentioned above there was also a speech by Linda Woodall, FSA Head of Savings & Investments Department. The subject matter included ‘Intensive Supervision’ and what it means for smaller firms. In the eyes of the FSA the latter are part of the fabric of financial services [...]

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FATF

It may be recalled that the Financial Action Task Force (FATF) used to maintain a list of ‘Non-Cooperative Countries and Territories’ – a total of 23 countries/territories appeared on the list at one time or another. As and when a listed entrant made significant progress in addressing AML/CFT deficiencies it [...]

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Out of Control

A brief press release by the FSA announced that it had successfully brought its second prosecution for change in control offences. Semperian pleaded guilty to acquiring an interest in an authorised firm before receiving approval from the FSA (SUP 11 refers). Semperian’s fine of £1,000 contrasts with last year’s action [...]

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Broken

Two brokers, Wills & Co and Direct Sharedeal (‘DS’), both met with FSA actions in February and there has been a large amount of publicity about both cases. Common to both was unacceptable or high pressure sales tactics in respect of higher risk securities to clients (and numerologists will be [...]

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AIFM (cont)

The Alternative Investment Fund Managers Directive proposal saga continues to rumble on (the original draft Directive was issued at the end of April last year). After the ‘Swedish Proposal’ we now have the ‘Spanish Proposal’. A quick recap on the original proposals: It would impact on all ‘Alternative Investment Funds’ [...]

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Hedge Funds and Systemic Risk

Neatly following on from the latest developments in the ongoing AIFM saga is the publication by the FSA on ‘Assessing possible sources of systemic risk from hedge funds’. The FSA conducts two different surveys every six months: Hedge Funds as Counterparties Survey (“HFACS”) – which has been running for 5 [...]

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AIFM & FSA (cont)

And just to make the FSA’s views clear, Dan Waters’ speech the other day – which reminded us that the FSA regulates around 80% of the hedge fund management industry in Europe – made interesting reading. Following praise of sorts for the progress made on the proposed Directive under the [...]

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Corporate Governance

The FSA has issued Consultation Paper CP10/03: ‘Effective corporate governance’. As we all know, the FSA places considerable emphasis on good corporate governance and is a subject matter that can be guaranteed to feature in the planning of an ARROW visit. The proposals, which need to be considered by most [...]

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