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 U.K.’s banking and financial services regulators have recently issued guidance updating their approach to handling applications to approve acquisitions of U.K.‑regulated businesses. This guidance is of interest to potential investors and current controllers of U.K.‑regulated firms. The new guidance replaces existing EU (pre-Brexit) guidance and is essential reading as it covers the regulators’:......By: Paul Hastings LLP

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 FCA has started criminal proceedings against 4 individuals for conspiracy to commit false accounting, with 3 of them facing further charges for fraud. Terry Dodd, John Riley and Brian Flanagan have been charged for fraudulently abusing their positions as directors of the Dial-A-Cab Credit Union for their own personal gain.The FCA alleges that the 4 individuals transferred funds out of the credit union for the benefit of themselves and their families.Terry MacPherson has been charged for conspiring with the individuals, using his position as an auditor to submit false returns to the FCA and PRA, which masked the true position of the credit union and the fraud taking place.The alleged offending took place over a 6-year period between 1 September 2012 and 4 September 2018.The defendants were granted conditional bail at Westminster Magistrates Court on 20 November 2024, and the case has been sent to Southwark Crown Court, with the next hearing on 18 December 2024.Notes to editorsTerry Dodd was born 19 January 1949John Riley was born on 26 May 1952Brian Flanagan was born on 6 February 1963Terry MacPherson was born on 8 January 1971Fraud by abuse of position is an offence under sections 1(1) and 4 of the Fraud Act 2006 (4 offences)Conspiracy to commit false accounting is a criminal offence under section 1(1) of the Criminal Law Act 1977Dial-A-Cab Credit Union was regulated by the FCA for conduct matters and authorised by the PRA for prudential matters from 1 April 2013 until 4 September 2018 when it entered administration.Find out more information about the FCA.

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. 

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 28 october 2024, the british virgin islands financial services commission (fsc) and financial investigation agency (fia) jointly released new guidance to help financial institutions (fis) and designated non-financial businesses and professions (dnfbps) manage risks associated with third-party introducers. this guidance is aimed at strengthening compliance with anti-money laundering regulations and related local legislation by offering a structured, risk-based approach. aligned with the financial action task force’s recommendation 17, the guidance details measures for fis and dnfbps to verify ownership and control of introduced clients and assess the reliability of third-party introducers. it also covers steps to terminate risky introducer relationships and highlights best practices for minimising exposure to financial crime. the managing director of the bvi fsc highlighted that the guidance emphasises the importance of compliance, urging entities to implement strong internal policies. the director of the bvi fia reaffirmed the territory's commitment to preserving a secure and reputable business environment by preventing misuse of its financial systems. for further details, the press release can be found here and the full guidance document here.

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.

The Central Bank of Ireland today (18 November) hosts the third annual Financial Systems Conference.  Building on the success of previous events, this year’s Conference theme is “Delivering a well-functioning financial system, supporting a changing economy”.  Attendees at the Conference include industry leaders, consumer representatives and policymakers from Ireland and across the EU.Speaking at the event, Governor of the Central Bank of Ireland Gabriel Makhlouf said: “In the face of a changing ecosystem, central banks, regulators, businesses and consumers all have to adapt, transform and evolve. “For our part, as a central bank, to meet the challenge, we are changing how we engage, how we work and how our frameworks reflect an increasingly digital world.“We have launched our Innovation Sandbox Programme and expect to announce the selected participants shortly.“We will continue to modernise our other frameworks, including a new Consumer Protection Code and negotiations on the new EU Financial Data Access Regulation. “Looking ahead, we recognise that public innovation in payment systems must keep pace with private innovation.  We also need to strengthen our capabilities around tokenisation and AI, two potentially transformative technologies that could provide greater access and choice to consumers.“Our work across Europe on the Digital Euro responds to the shift in consumers’ preferences - this would be a digital form of cash, issued by the central bank and available to everyone in the euro area, going hand in hand with banknotes, providing an all-in-one digital payment option across the euro area, free for basic use. “Our most comprehensive response to the changing financial system comes in the form of our new supervisory framework, however.  The framework will of course remain risk-based, but it is evolving to deliver a more integrated approach, placing consumer protection at the heart of day-to-day supervision.“Firms will hear one consistent voice from the Bank, with more coordinated, consistent messaging and more streamlined demands across the full span of our regulatory and supervisory mandate.“We will promote a more open and transparent supervisory approach, with strategic supervisory priorities clearly identified and communicated in a proportionate and timely manner.  “To enable and implement our new supervisory framework, we are moving to a new organisational structure, as we said we would. This integrated team structure, built on sectoral lines, is key to implementing the new supervisory framework in an effective and efficient way.”

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.