Warning Savings protection Warning The AMF and the ACPR warn the public against the activities of several entities offering investments in Forex and in crypto-assets derivatives in France without being authorized to do so

1.1 Fri 29/10/2021 - 12:00 Reference texts article 223-1 du règlement général de l’AMF Book 1 Recommendation Closing of the 2021 financial statements and financial statements examination work Closing of the 2021…

The FCA has found that while life insurers provide good service to bereaved customers, they need to settle claims quicker and improve how they measure customer experience. The multi-firm review found evidence of good practice, such as firms providing additional support for claimants throughout what is a difficult time for them. The FCA also recognises firms can face challenges in providing a timely service, such as obtaining the evidence needed to assess a claim.However, the FCA has found that many firms still have further to go to meet its expectations, particularly in the measurement, monitoring, and delivery of good service outcomes for customers.The FCA found that firms took, on average, between 53 and 122 days to process a claim, from start to finish, for a term insurance policy, within 36 days for group life cover, 20 days for over 50 plans, and 53 days for whole of life. However, measurement is inconsistent as few firms captured these figures.The FCA will be engaging with industry to collectively improve customer outcomes and address the findings. The regulator will do further work to understand what changes have been made and will take action if it doesn't see improvements.Matt Brewis, director of insurance at the FCA, said:'The loss of a loved one can be intensely stressful and we expect firms to offer the right support to help their customers during this difficult time.'We expect all life insurers to act on our findings and avoid unnecessary delays with claims.'Following the introduction of the Consumer Duty in July 2023, firms are required to ensure consumers are at the heart of their business and must act to deliver good outcomes for them.Notes to editorsRead the multi-firm review.The review was based on data requested from 15 life insurers, representing over 75% of the life protection market. The FCA asked firms to set out their customer journeys for life products within four categories: term insurance, group life cover, guaranteed over-50 plans and whole of life insurance.In September 2023, the FCA issued a Life insurance letter raising a series of concerns about poor customer services being delivered to customers. We highlighted slow transfer and claims settlement times in particular.The FCA decided to look at bereavement claims, as this is a point when customers may have a higher chance of demonstrating characteristics of vulnerability. Life Insurers paid out over 250,000 claims in connection with group and individual protection policies in 2022.Term Insurance: a policy that pays a lump sum should the policyholder die during a pre-agreed period of time.Group Life Cover: provides life cover through an employer.Over 50 plans: provides guaranteed acceptance for life cover to over 50s. Can be used towards funeral costs, paying debts or leaving some money to a loved one.Whole of Life: provides life cover for the policyholder's lifetime; can be used to meet future liabilities such as Inheritance Tax.Find out more information about the FCA.

The Financial Crimes Enforcement Network (FinCEN) recently updated its Frequently Asked Questions (FAQs) regarding the Beneficial Ownership Information (BOI) Reporting Rule.  The October 3, 2024 FAQ updates provided crucial clarifications on several aspects of the FinCEN rules....By: Polsinelli

On 21 November 2024, the Bank of England (BoE) and Financial Conduct Authority (FCA) published a report setting out the results of their third survey of artificial intelligence (AI) and machine learning in UK financial services. Background In the report, the BoE and FCA highlight the increasing use of AI in UK financial services over the past few years and the fact that, while it has many benefits, AI can also present challenges to the safety and soundness of firms, the fair treatment of consumers, and the stability of the financial system. In light of these challenges, the regulators note the need for them to maintain an understanding of the capabilities, development, deployment and use of AI in UK financial services. The survey was carried out to build on existing work to further the BoE’s and FCA’s understanding of AI in financial services, continuing the previous two surveys (in 2019 and 2022) by providing ongoing insight and analysis into AI use by BoE and/or FCA-regulated firms. The 2024 survey also incorporated questions relating to generative AI, given its growth since the 2022 survey. Findings In the report, the BoE and FCA set out their findings on a number of key topics, including: Use and adoption of AI: The report flags that 75% of firms are already using AI, with a further 10% planning to use AI over the next three years. Foundation models were found to form 17% of all AI use cases, supporting anecdotal evidence for the rapid adoption of this complex type of machine learning. Third-party exposure: The survey found that a third of all use cases are third-party implementations, supporting the view that third-party exposure will continue to increase as the complexity of models increases and outsourcing costs decrease. Automated decision-making: 55% of all AI use cases were found to have some degree of automated decision-making, with 24% of those being semi-autonomous (i.e. although they can make a range of decisions on their own, they are designed to involve human oversight for critical or ambiguous decisions). Only 2% of use cases have fully autonomous decision-making, according to the report. Materiality: Of all AI use cases, 62% are rated low materiality by the firms that use them, while 16% are rated high materiality. Benefits and risks of AI: The report notes that the highest perceived current benefits are in data and analytical insights, anti-money laundering (AML) and combating fraud, and cybersecurity. In terms of risks, 4 of the top 5 perceived current risks are related to data, and the risks expected to increase the most over the next three years are third-party dependencies, model complexity, and embedded or ‘hidden’ models. Cybersecurity is rated as the highest perceived systemic risk both currently and in three years, with critical third-party dependencies causing the largest increase in systemic risk. Constraints: Data protection and privacy is the largest perceived regulatory constraint to the use of AI, followed by resilience, cybersecurity and third-party rules, and the FCA’s Consumer Duty. Safety, security and robustness of AI pose the largest perceived non-regulatory constraint. Governance and accountability: The survey found that 84% of firms reported having an accountable person for their AI framework, with 72% of firms saying that their executive leadership were accountable for AI use cases.

  The Central Bank of Ireland (the Central Bank) has fined BlueSnap Payment Services Ireland Limited (BlueSnap) €324,240 for breaching requirements of the European Union (Payment Services) Regulations 2018 (the PSR 2018) between January 2021 and December 2022. BlueSnap was authorised by the Central Bank as a payment institution under the PSR 2018 on 23 December 2020 to provide payment services. BlueSnap provides “merchant acquiring services” enabling its customers, which are businesses that sell products and services online, to accept payments for products and services sold. When an online sale is made by one of BlueSnap’s customers, BlueSnap should collect the money, hold it securely in a segregated bank account and then pay it onwards to the customer’s bank account. The PSR 2018 contains specific safeguarding requirements for payment institutions that provide payment services, such as BlueSnap.  Safeguarding of funds is a key regulatory protection for customers who use the services of Payment and E-Money institutions. The objective of safeguarding is to protect customers’ funds pending a payment being made and to ensure that if a firm becomes insolvent, funds are available to be returned fully and promptly to its customers. Safeguarding is particularly important as there is no compensation or deposit protection scheme applicable to the Payment and E-Money sector.The business model of a payment institution is focused on enabling customers to make and receive payments. From a safeguarding perspective, this means that a payment institution must hold customers’ money securely for the duration of those transactions in a segregated bank account established for the sole purpose of holding customer funds, or have an insurance policy or comparable guarantee in place for an amount equal to the value of customer funds held.When customer funds are held in a segregated bank account, such funds must not be mixed with the firm’s own funds or funds of other group entities and their customers. Customer funds must always be identified, managed and protected in this manner. This includes the clear segregation, designation and reconciliation of any customer funds held. The Central Bank views the protection of customers’ money as a core part of the role that payment and e-money institutions play in society.  For this reason, the Central Bank has repeatedly communicated to the sector that it has no tolerance for weaknesses in safeguarding arrangements.   When a firm applies to the Central Bank for authorisation, the information it provides in its application is fundamental to whether the Central Bank deems it appropriate to authorise the firm to provide financial services.  The integrity and accuracy of information provided to the Central Bank underpins the Central Bank’s decision to authorise a firm. The Central Bank expects firms to be able to demonstrate on an ongoing basis that they meet the assurances and commitments they have given at authorisation. BlueSnap breached the requirements of the PSR 2018 because it:Did not deposit its customers’ funds in BlueSnap’s designated safeguarding account.Mixed its customers’ funds with other funds.Delayed informing the Central Bank once it became aware that it was not following the safeguarding procedures that BlueSnap had set out to the Central Bank in its application for authorisation.These failings arose due to deficiencies in regulatory awareness and understanding of reporting requirements, in addition to inadequate oversight and monitoring by BlueSnap of safeguarding operations which were provided by the BlueSnap group. BlueSnap has confirmed to the Central Bank that it has remediated the safeguarding failures which are the subject of the prescribed contraventions. Today’s announcement follows the settlement reached between the Central Bank and BlueSnap on 19 November 2024. BlueSnap has admitted the prescribed contraventions and has agreed to the undisputed facts set out in the Settlement Notice. As part of the settlement agreement reached between the Central Bank and BlueSnap, the Central Bank has determined that sanctions comprising a reprimand and monetary penalty in the amount of €463,200 are warranted.  The application of a 30% settlement scheme discount brings the amount to €324,240.  The sanctions have been accepted by BlueSnap.  The sanctions are subject to confirmation by the High Court and will not take effect unless they are confirmed. Seána Cunningham, Director of Enforcement and Anti-Money Laundering, of the Central Bank, said:“Payment and E-Money firms are authorised to hold and transfer money on behalf of customers, and at the core of this is a requirement for them to safeguard this money. Safeguarding customer funds is a fundamental requirement for any Payment or E-Money institution and the Central Bank has made its supervisory expectations in this regard clear.  When firms apply for authorisation, they need to demonstrate to the Central Bank how they will meet their regulatory obligations. It follows that they must then adhere to the commitments they have made at authorisation when they provide services as an authorised financial services provider. If information provided at authorisation is no longer accurate, firms must inform the Central Bank of this promptly and take any necessary remedial action.  In this case, BlueSnap failed to comply with its safeguarding obligations, which exposed its customers to significant risk, and failed to inform the Central Bank promptly of changes to the accuracy of the information it provided in its application for authorisation.  The safeguarding of customer funds has been, and will continue to be, a key area of supervisory focus for the Central Bank."Notes to editorsThis is the Central Bank’s 158th enforcement outcome to date, bringing the total fines imposed by the Central Bank to over €406 million.Undisputed Facts Settlement: This is the second settlement under the Administrative Sanctions Procedure (ASP) following the changes introduced by the enactment of the Central Bank (Individual Accountability Framework) Act, 2023. The ASP guidelines, which the Central Bank published in December 2023, outline the various settlement processes now provided for under the ASP. The Central Bank concluded this ASP by way of settlement under the undisputed facts settlement process. The Central Bank may enter into the undisputed facts settlement process with a Subject where there are undisputed facts that render an investigation and/or the continuation of an investigation unnecessary. A Subject who enters into a settlement under the undisputed facts settlement process may, at the sole discretion of the Central Bank, and subject to the timing of the settlement, be offered a potential discount to any monetary penalty proposed up to a maximum of 30% under the settlement scheme. Sanctions imposed by way of the undisputed facts settlement process will be subject to confirmation by the High Court.High Court Confirmation Application: As soon as practicable after such a settlement process has been concluded, the Central Bank will apply to the High Court for confirmation of the sanction imposed. The High Court will confirm the decision to impose a sanction unless it is satisfied that any sanction imposed is manifestly disproportionate. If the High Court does not confirm a sanction agreed as part of a settlement agreement concluded under the Undisputed Facts Settlement Process, it will remit the matter for reconsideration by the Central Bank and the Subject along with any recommendation the High Court has in respect of the matters to be reconsidered.Settlement Notice: https://www.centralbank.ie/docs/default-source/news-and-media/legal-notices/settlement-agreements/public-statement-relating-to-enforcement-action-between-bluesnap-payment-services-ireland-limited.pdf Further information regarding Payment Institutions sector are at Central Bank’s website.The relevant provisions of the European Union (Payment Services) Regulations 2018 are Regulation 17(2) and Regulation 27.Central Bank Payment Authorisation page for firms seeking authorisation as a Payment Institution (PI) or an Electronic Money Institution (EMI)Central Bank’s Dear CEO letter re Supervisory Expectations for Payment and Electronic Money (E-Money) Firms December 2021Central Bank’s Dear CEO Letter - Supervisory Findings and Expectations for Payment and Electronic Money (E-Money) Firms January 2023Central Bank’s Safeguarding Notice to Payment and E-Money Firms May 2023Central Bank’s Remarks on "Perspectives and priorities - payments and e-money" February 2024

The period for switching health insurers is in full swing, and unsolicited marketing calls are still part and parcel of it. Cold calling in the area of health insurance has been banned for all insurance intermediaries and insurance companies by law since 1 September 2024. FINMA has launched investigations of four insurance and intermediary firms. 

on 8 october 2024, the council of the european union issued a press release condemning russia's escalating hybrid activities, which target eu member states and their partners. these actions, which include cyber-attacks, misinformation, sabotage, arson, and disruptions to critical infrastructure, are seen as part of a coordinated effort by russia to destabilise the eu, weaken its unity and undermine support for ukraine. russia has also been accused of interfering with satellite communications, violating european airspace, and carrying out physical attacks within the eu. the eu views these activities as a blatant disregard for international law and the rules-based international order. in response, the eu has introduced a new legal framework to impose sanctions on individuals and entities involved in russia’s destabilising actions. the eu remains committed to standing firm against these threats, bolstering its resilience, and supporting ukraine for as long as needed. through diplomatic, economic and hybrid response tools, the eu aims to deter further aggression and hold those responsible accountable. the press release can be accessed here.

To enhance the information exchange between supervisory authorities within the European Union, also across different parts of the financial sector, the ESAs have developed an ESAs F&P Information System. The Joint Guidelines clarify its use and how data can be exchanged.

20 November The Asset Management and Investors Council (AMIC) of ICMA welcomes the opportunity to provide feedback to the European Commission's consultation on Assessing the adequacy of macroprudential policies for Non-Bank Financial Intermediation (NBFI). This paper represents an ICMA–wide consultation response, led by the Asset Management and Investors Council (AMIC) Committee and incorporates feedback from the broader ICMA membership.The objective of the consultation was to seek a view on the adequacy of the macroprudential framework for NBFI; to identify the vulnerabilities and risks of NBFIs; and map the existing macroprudential framework. An additional aim was to gather feedback on the current challenges to macroprudential supervision to find areas for further improvement.In conclusion, we believe a uniform, one-size fits all macroprudential framework is unsuitable for the diverse NBFI ecosystem. The focus should be on enhancing regulatory cooperation, data sharing, and targeted interventions to support NBFIs’ liquidity and funding roles while addressing systemic risks without stifling economic growth. Such an approach will ensure the EU remains competitive and robust in the evolving financial landscape.ICMA is grateful for the input from stakeholders, and we present a summary of our key findings below.To read the full consultation click here.Key vulnerabilities and risks stemming from NBFI• Diverse Landscape: The NBFI ecosystem's heterogeneity precludes a one-size-fits-all macroprudential framework akin to that of banks.• Systemic Liquidity Risks: leveraging existing surveillance tools should facilitate the visibility of less known and less monitored NBFI entities and activities.• Central Clearing Concerns: Current margin requirements (cash-only collateral) exacerbate procyclicality during stress periods. Expanding eligible collateral to include high-quality securities (e.g., MMFs and government bonds) could mitigate these effects.• Role in Bond Markets and Private Lending: Hedge funds and private credit providers play vital roles in bond market liquidity and SME-focused funding.Overview of existing macroprudential tools and supervisory architecture in EU legislation• Robust Regulation: EU regulations governing asset managers, investment funds, and money market funds (MMFs) are stringent and have been recently enhanced at both EU and global levels.• Corporate Paper (CP) Markets: Greater standardization and transparency could deepen market participation but must avoid unintended consequences, such as misinterpretations of issuer strategies or financial health.Excessive leverage• Excessive Leverage: Existing leverage caps within the highly regulated NBFI sectors are sufficient. System-wide cross border systemic counterparty risk monitoring would enhance the surveillance of NBFIs that not currently in scope of EU regulation.• Bank-NBFI Links: Focus should remain on improved data sharing to monitor and mitigate interconnected risks effectively.Monitoring interconnectedness• Enhanced Coordination: Instead of new mechanisms, leveraging existing coordination tools and improving data sharing between NCAs, ESAs, and central banks is key. A single regulatory reporting hub would enhance transparency and policy response capabilities.• Consistent Supervision: Supervision should be consistent across all management companies, irrespective of size, as size alone is not a suitable risk metric.Supervisory coordination and consistency at EU level• Data Utilization: Leverage existing data (e.g., EMIR reporting) for systemic risk monitoring, limiting additional reporting burdens on asset managers, investment funds and banks.• Facilitate Liquidity Provider Roles: Policies must support NBFIs’ critical roles as liquidity providers, avoiding unnecessary regulatory burdens.• Global Coordination: Recognize the global nature of financial markets and collaborate internationally to address risks posed by non-EU domiciled entities.

On Saturday, 16 November, the FSMA took part in Finance Avenue, the annual trade fair for investors, organized by De Tijd and L’Echo newspapers at Tour & Taxis in Brussels.This news article is not available in English. Please consult the French or Dutch site.

Release of new website

November 20, Chicago—NFA has ordered X-Change Financial Access LLC (XFA) to pay a $400,000 fine. XFA is an NFA Member introducing broker located in Chicago, Ill.