+ 44 20 7408 2448
IMS Asset Management Regulatory Update 2009 - Issue 1, March
Welcome to the inaugural issue for 2009 of the regulatory newsletter from IMS Consulting, the largest independent asset management and securities regulatory consultancy in the UK. Our newsletter rounds-up some of the more important recent regulatory changes for asset managers and securities firms, focussing on FSA related developments.
The newsletter commences with coverage of key FSA publications, specifically the FSA’s Financial Risk Outlook, the FSA’s 2009/10 Business Plan, a proposal to extend the ‘significant influence function’ regime and a review of the implementation of MiFID at wholesale firms.
There then follows a summary of some pending rule changes and discussion of other regulatory obligations and developments. The new telephone recording requirements take effect from 6th March 2009 and the common platform is extended to non-MiFID firms from 1st April 2009. We present information on completing the regulatory return FSA019 “Pillar 2 Information”, remind firms with a recent financial year end of their Pillar 3 disclosure requirement and provide an update on UK regulatory developments relating to the short selling regime.
This is followed by a discussion of the largest financial crime related fine to date by the FSA, a round-up of market abuse and financial crime issues and a sobering indication by the FSA that failure to submit regulatory returns could lead to cancellation of FSA regulatory approval.
News of an enforcement proceeding by the SEC against a non-US domiciled broker-dealer rounds off the newsletter.
We hope that you find this newsletter to be relevant and informative. If you have any further questions please contact Scott Wilson, Stephen Burke or Chris Rexworthy. Alternatively telephone 
020 7408 2448 to speak to your usual IMS contact.
Please click here for a Pdf of the whole content of this newsletter (printer friendly version).
..........................................................................................
|
FSA Outlines Key Financial Risks and its Business Plan The FSA has outlined – in two separate documents – what is considers to be the key financial risks for the year, and its plans for addressing these risks. The Financial Risk Outlook describes the issues that are considered to pose risks to the regulator’s ability to meet its statutory objectives and strategic aims. The 2009/10 Business Plan sets out the FSA’s programme of work for the year. |
|
Extension of the Significant Influence Function Regime The FSA has proposed extending the approved persons regime to include individuals at parent undertakings and holding companies that exert a significant influence over FSA regulated firms. This is part of an approach of increasing the rigour of the FSA’s day-to-day supervision of regulated firms and enhancing the approved persons regime in order to help meet this objective. |
|
FSA Publishes Wholesale Firms' MIFID Implementation Review Overall, the FSA considers that MiFID has been effectively implemented at wholesale firms. However, there are some concerns relating to best execution, inducements and conflicts of interest policies. |
|
New FSA Requirements for Telephone Recording take effect from 6th March 2009 From 6 March 2009, the FSA will require firms to take reasonable steps to record telephone lines and maintain records of electronic communication that relates to receiving, executing or arranging client orders in qualifying investments traded on prescribed markets. |
|
Common Platform Extended to Non-MIFID Firms from 1st April 2009 Non-MiFID firms may be required to amend their governance arrangements. |
|
The Thirty-Nine Steps; Completing FSA019 Pillar 2 Information On 3rd February, we published a guide to the completion of FSA019, “Pillar 2 Information”, which we re-issue in this newsletter. Investment firms that are required to have in place an ‘Internal Capital Adequacy Assessment Process’ (‘ICAAP’) must submit FSA019 to the FSA using the online ‘GABRIEL’ system. |
|
Reminder: Pillar 3 Disclosure Requirements for Firms with recent Financial Year Ends We remind FSA regulated wholesale firms with a recent financial year end date (e.g. 31st December) of their obligation to make their Pillar 3 disclosure as soon as practicable. |
|
Short Selling Regime for UK Financial Sector Companies: An Update Click here for an update on UK regulatory developments regarding the short selling regime. |
|
AON Limited Fine The largest financial crime related fine to date was meted out by the FSA in January 2009. Aon Limited (‘Aon’), an insurance and reinsurance broker, was fined £5.25 million for failing to take reasonable care to establish and maintain effective systems and controls to counter the risks of bribery and corruption at its overseas offices. This sanction is relevant to asset management and securities firms for a number of reasons. |
|
Market Abuse and Financial Crime Update Following on from our newsletter article ‘Financial Crime’ in our Issue 6 publication, the FSA continues its campaign to tackle market abuse and financial crime and has published a host of successful cases brought against individuals and firms |
|
Submitting Late Returns May Lead to Cancellation of FSA Regulatory Approval The FSA indicated in January that persistent late returns may lead to the FSA cancelling the culprit’s regulatory approval. |
|
SEC brings Enforcement Proceedings against Moscow based Broker Dealer over Non-Registration The US Securities and Exchange Commission (SEC) has instigated enforcement proceedings against a Moscow based broker-dealer for failing to register with the SEC. This highlights the SEC’s ability to bring such actions outside of the US, and also perhaps a willingness to do so more often than in the past. |
