This week has seen the FCA publish a second consultation paper concerning the implementation of the MiFID II Directive

REGULATORY

UK implementation of MiFID II Directive: 2nd FCA consultation

The FCA has published a consultation paper (CP16/19) on the implementation of the MiFID II Directive, following on from consultation CP15/43 which was published in December 2015. The second consultation closes on 28 October 2016 and covers issues such as the framework for position limits, reporting for commodity derivative contracts, whistleblowing and remuneration requirements for sales staff, and includes an appendix related draft Handbook text. There will also be a third consultation which will include changes to the Conduct of Business sourcebook and the FCA will publish a single policy statement on the implementation of MiFID II in the first half of 2017.

FCA, 29 July 2016

PRA consultation on reporting requirements for operational continuity in resolution

The PRA has published a consultation paper (CP28/16) on reporting requirements for ensuring operational continuity in resolution. This applies to UK banks and building societies and designated investment firms providing functions that are critical to the economy. The paper sets out proposals for firms to report on the activities and financial resources of the group provider and includes appendices outlining proposed amendments to the Regulatory Reporting Part plus new reporting templates and instructions. The consultation closes on 28 October 2016.

PRA, 29 July 2016

Consultation paper on PRA's implementation of the systemic risk buffer

The PRA has published consultation paper (CP27/16) on the systemic risk buffer (SRB). This includes a draft statement of policy on its approach to the SRB implementation which will apply to ring-fenced banks and large building societies. One of the proposals put forward by the PRA includes only deviating from the SRB rates derived from the Financial Policy Committee framework in exceptional circumstances. The consultation closes on 28 October 2016.

PRA, 29 July 2016

FCA publishes final report of credit card market study

The FCA has published the final findings in its credit card market study and has set out a package of measures to help consumers to shop around more effectively, take better control of their spending, and to make faster repayments. The report confirmed the FCA's provisional findings that competition is working well for most consumers but noted some customers struggle to find the best deal for them, particularly higher risk consumers with problematic debt. The FCA's proposed remedies include work on opening access to data and use of application programming interfaces, taking forward work with price comparison websites, customer prompts before promotion periods end, promoting and facilitating the use of quotation searches, alerting customers at a set point of credit limit utilisation, and exploring a novel approach to repayments.

FCA, 26 July 2016

UK

Implementation report from FEMR chairs

The Bank of England (BoE) has published the Fair and Effective Markets Review (FEMR) co-chair's FEMR implementation report. This report sets out progress in actions to improve conduct in the fixed income, currency and commodities (FICC) markets and concludes that significant progress has been made in implementing FEMR recommendations with further work to be done, especially around trust in financial markets and institutions.

FEMR, 28 July 2016

BBA figures for the high street banks – June 2016

The British Banking Association (BBA) has published latest figures for the high street banks for June. They found business borrowing dropped for the first time in 2016, with investment decisions being delayed until after the European referendum vote. Mortgage lending and approvals also fell in June but remain above the low levels seen in April.

BBA, 26 July 2016

EU

ESRB publishes EU shadow banking monitor – July 2016

The European Systemic Risk Board (ERSB) has published the first edition of its EU shadow banking monitor, looking at developments in the European shadow banking system to assess potential risks to financial stability. It is the first report in an annual series that will contribute to the monitoring of a part of the financial system that has experienced significant growth in recent years. An occasional paper was also released highlighting the methodology used for assessing shadow banking activities.

ESRB, 27 July 2016

EBA consults on report on appropriate basis for target level of resolution financing arrangements

The European Banking Authority has published consultation paper which details recommendations from its report on the appropriate basis for the target level of resolution financing arrangements. The report recommends that the Commission considers and, where appropriate, changes the base for the target level of resolution financing agreements to one of the following options:

• Total liabilities (excluding own funds), less covered deposits
• Total liabilities (including own funds)
• Total liabilities (excluding own funds)

The EBA believes it is crucial to capture all institutions within the scope of the BRRD and will be holding a public hearing on the consultation on 16 August 2016 with the consultation closing on 2 September 2016.

EBA, 25 July 2016

EBA consultation paper on guidelines on connected clients under CRR

The European Banking Authority has published a consultation paper on guidelines on connected clients under Article 4(1)(39) of the Capital Requirements Regulation (CRR). The draft guidelines are set out at section 4 and focus exclusively on the issue of connected clients as defined in the CRR and reflect the developments in the area of shadow banking and large exposures both at EU and international level. The consultation runs until 26 October 2016 and a public hearing will be held on 5 September 2016.

The European Banking Authority, 26 July 2016

EBA consultation on draft guidelines on credit institutions' credit risk management practices and accounting for expected credit losses

The European Banking Authority has published a consultation paper on draft Guidelines on credit institutions' credit risk management practices and accounting for expected credit losses. They aim to ensure sound credit risk management practices for credit institutions associated with the implementation and ongoing application of expected credit loss accounting models. The consultation runs until 26 October 2016.

The European Banking Authority, 26 July 2016

EBA publishes guidelines on communication between supervisors and statutory auditors

The European Banking Authority has published final Guidelines on the communication between competent authorities supervising credit institutions and statutory auditors of those institutions. The guidelines include an underlying general framework that should underpin effective communication between the competent authorities and auditors at all times.

The European Banking Authority, 26 July 2016