Included in this issue of InContact: FCA reports on first year of regulatory sandbox, Cheque and Credit Clearing Company launches cheque image clearing system, Banking sector contributed £35.4bn to UK finances in 2016/17 and more...
FCA reports on first year of regulatory sandbox
The FCA has published a report outlining how the regulatory sandbox has met its objectives over the first year of operation. The report sets out the sandbox's overall impact on the market, including the adoption of new technologies, increasing access and improving experiences for vulnerable customers, and lessons learned from individual tests.
FCA, 20 October 2017
Cheque and Credit Clearing Company launches cheque image clearing system
The Cheque & Credit Clearing Company (C&CCC) has announced the launch of the Image Clearing System (ICS). The C&CCC published a press release announcing the launch of the Image Clearing System (ICS). It has also published a webpage, FAQs and a factsheet on the ICS. The ICS enables images of cheques to be exchanged between banks and building societies, with the aim of allowing cheques to clear more quickly than they have done previously. The C&CCC states that the effect of the changes will be that if a customer pays in a cheque on a weekday, they will be able to withdraw the funds by 23.59 on the next weekday at the latest.
Cheque & Credit Clearing Company, 30 Oct 2017
Banking sector contributed £35.4bn to UK finances in 2016/17
The total tax contribution of the banking sector to the UK public finances in 2016/17 was an estimated £35.4bn (5.4% of total government tax receipts). The report – commissioned by UK Finance and based on analysis by PwC – shows that £18.1bn of the sector’s tax contribution came from UK banks. £17.3bn was contributed by foreign banks. Taxes borne – those that are a direct cost to a company – accounted for £19.0bn of the total while taxes collected made up £16.4bn. This year’s survey included the impact of the bank surcharge, introduced in January 2016, which generated £1.1bn in payments from the sector. The introduction of the surcharge, along with an increase in corporation tax resulting from increased profitability, loss relief and compensation payment restrictions, drove an 11% increase in taxes borne in 2016/17. Receipts of corporation tax, the bank levy and the surcharge (£8.9bn combined) are 22% higher than corporation tax receipts before the financial crisis (£7.3bn in 2007).
UK Finance, 26 October 2017
EBA consults on RTS for home-host co-operation under PSD2
The EBA published a consultation paper on draft regulatory technical standards (RTS) specifying the framework for co-operation and the exchange of information between competent authorities under Article 29(6) of the revised Payment Services Directive (PSD2). The proposed co-operation framework aims to ensure consistent and efficient supervision of payment institutions operating across borders by specifying the procedure for the requests and replies for co-operation and exchange of information between competent authorities. This includes single contact points, language, standardised forms and timelines. The consultation closes on 5 January 2018.
European Banking Authority, 27 October 2017
Fintech firm R3 and world's biggest banks build blockchain-based payments system
Blockchain consortium R3 and 22 of its member banks have collaborated on the development of a cross-border payments platform built using distributed ledger technology (DLT). The platform will enable both existing Central Bank currencies and any digital currencies developed in the future to be transacted via the blockchain, says R3, and it expects a prototype to be launched before the end of 2017. While many similar DLT projects have focused on specific use cases within the international payments market but this is the first time a shared infrastructure has been developed that addresses the full payments workflow, claims R3.
Developed on its Corda platform, the new product will facilitate instant international payments, says R3, offering an alternative to the current systems that are seen as slow and costly, compared to domestic payment systems. The participating banks include Barclays, BBVA, CIBC, Commerzbank, DNB, HSBC, Intesa, KBC, KB Kookmin Bank, KEB Hana Bank, Natixis, Shinhan Bank, TD Bank, U.S. Bank and Woori Bank.
The Independent, 31 October 2017
European Commission inception impact assessment on legislative proposal for EU framework on crowdfunding
The European Commission has published an inception impact assessment for a legislative proposal for an EU framework on crowd and peer-to-peer finance. In the impact assessment, the Commission sets out information on a potential initiative relating to crowdfunding. The aim of the initiative is to create a framework that will encourage cross-border activity relating to crowdfunding platforms and to provide platforms with a proportionate and effective risk management framework. The Commission is concerned that, to date, crowdfunding activities have been confined to national markets with very little cross-border activity. It is also concerned about the perceived lack of reliability of crowdfunding and peer-to-peer platforms, with the biggest perceived risks being loan defaults, business failures, fraudulent activities and the collapse of platforms because of malpractice.
European Commission, 30 Oct 2017