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IMS Asset Management and Securities Regulatory Update 2010 - Issue 3, June
Regular readers of the IMS regulatory newsletter will already be aware that the first two publications of the year led with introductions discussing regulatory reform. This newsletter can certainly be no different. The dramatic, if heralded, changes to the structure of UK regulation announced by George Osborne on 16 June represent potentially fundamental changes to the way we will perceive and experience regulation of both individual firms and the economy as a whole in the future.
Whether the changes were necessary is now a moot point. However, there must now be a very real risk that financial services regulation is becoming – or has already become - a political football. The Labour Government announced the creation of the FSA immediately following its election success in 1997, replacing the previous Conservative construction of the Securities Investments Board regime with the Self-Regulating Organisations underneath it. Any future structural change following further elections could only bring UK regulation into disrepute. This is very different to the USA where the SEC was established nearly 80 years ago.
The pressure on the new regulation authorities to ‘prove’ they work and are a step change for the good, will be high. Regulators tend to regard proof as visible enforcement action. However, the new authorities will not be in place for some time, so in the immediate future we will see the FSA determined to prove it is not a lame dog.
If anyone thinks that the regulatory uncertainty will lead to a light-touch from any regulators over the next few years, our analysis suggests otherwise. A detailed article follows.
The rest of this newsletter provides an essential collection of articles designed to keep you abreast of the big stories, the actions taken against firms, and policy and rule changes in a single compendium. These articles demonstrate that rather than entering a regulatory lull, all firms continue to need to evolve and adapt to an increasingly high set of regulatory expectations.
If you have any questions regarding any of the articles below, please contact Peter Moore, Stephen Burke or Chris Rexworthy. Alternatively telephone 
020 7408 2448 to speak to your usual IMS contact.
Click here for a PDF of the whole content of this newsletter (printer friendly version).
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The road from N2 to N3: Financial Services Authority to be abolished in restructuring of the UK regulatory system The UK’s coalition government has provided details of an extensive shake-up to the UK regulatory system. |
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AIFMD: Clears key votes and trilogue begins At the end of May there was significant reporting on the EU having “agreed” the Alternative Investment Fund Managers Directive (“AIFMD” or “the Directive”). However, such a definitive statement is far from the full story as there continue to be competing versions of the Directive. |
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Enforcement, regulatory sanctions and financial crime round-up The FSA’s efforts to clean up the market and further the sense of “credible deterrence” are continuing at pace. Throughout 2009 and thus far in 2010, the FSA has been prepared to utilise its full armoury of enforcement powers. |
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SIF clampdown extends to non-SIFs: Inter-dealer broker fined £700,000 for failing to register a partner with the FSA The FSA has fined Vantage Capital Markets LLP £700,000 for failing to prevent an individual from performing a Controlled Function without FSA approval. |
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FSA publishes the results of its Small Firms Financial Crime Review The FSA undertook the Small Firms Financial Crime Review in response to findings by the Financial Action Task Force (‘FATF’), following an evaluation in 2007, which concluded that the targeting and effectiveness of the FSA’s thematic work did not ensure adequate knowledge of compliance standards by the small firms sector concerning financial crime. |
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FSA details fee arrangements for 2010/11 Smaller wholesale investment firms are likely to benefit from reduced fees as a result of changes to the FSA’s fee tariff policy and arrangements. |
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Relative Speaking - Changes to Close Links Sometimes, it’s the small things that matter. Whilst the economy is in turmoil and the Euro is beset with problems, 1st June 2010 marked the FSA’s introduction of electronic Close Links reporting. |
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Less paper, more superhighways: Online Notifications and Applications (ONA) The FSA has launched its web based system that allows firms to submit certain regulatory applications and notifications online. |
FSA consults on the Competence and Ethics of Approved Persons
The FSA recently published Consultation Paper 10/12 “Competence and ethics” which contains proposals for clarifying and strengthening the FSA’s competence and ethics standards for approved persons.
