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Are FSA interview transcripts discloseable?
When the FSA conducts an investigation into a firm’s activities, or those of its staff, the firm naturally focusses on dealing with the challenge that the FSA poses to its commercial interests and reputation. On the whole, the question of the firm’s exposure to civil claims from other parties – for example, customers – tends to be lower down the list of priorities. This is partly because the regulatory environment provides mechanisms for handling civil claims, particularly in the retail arena. So, customer remediation tends to be dealt with by agreement with the FSA, or through claims handling and the Financial Ombudsman Service. Large scale civil litigation through the Courts has tended to feature rather less.
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007
Why outsource the compliance function?
The FSA is moving to ‘Principles-based supervision’. The regulator acknowledges that this may be more challenging for small firms, including investment managers which do not have dedicated compliance resources [1]. We are told that as regulated firms, we will “…be given greater flexibility to decide how best to meet regulatory responsibilities” [2]. So what does that mean for a small investment manager, either retail or wholesale, in terms of ensuring compliance with the FSA’s rules? Further, what risks does it pose to a broadly compliant firm endeavouring to operate with integrity and in the best interests of its customers?
Tim Duck
of CCL highlights some of the issues that small firms must address when deciding whether to employ the services of an independent compliance consultant.
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007
Should your engagement letter contain an arbitration clause?
Since Monday 2 October 2006, the public (including the press, competitors and potential litigants) have been able to obtain copies of any pleadings filed at Court. This means that, for any litigation commenced after that date, documents such as claim forms, particulars of claim and statements of defence, which can all contain sensitive information, are open to public inspection. Witness statements and expert reports cannot be examined. This change has prompted many financial institutions to review the dispute resolution clauses in their engagement letters and consider whether disputes arising under them would be better determined by arbitration. In order to assist with this decision-making process,
Gillian Eastwood
and
Oliver Kerridge
of Freshfields set out below the ten key issues to be considered.
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007
Bringing it together: a unified approach to financial crime
The financial crime environment has changed markedly in recent years. Feverish regulatory activity internationally in the immediate aftermath of September 11th prompted hasty investment in systems, processes and technologies to support compliance departments that were reeling under the new anti-money laundering and counter terrorist financing (AML/CFT) demands. Unfortunately these were often deployed on an ad hoc basis within different geographies and business lines. For the lack of a coordinated approach many organisations now find themselves forced to support a multitude of systems and methodologies that duplicate effort and fail to recognise synergies.
Rosemary Turley
of Norkom Technologies looks at how results are being achieved nonetheless.
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007
Looking at redress
The Financial Ombudsman Service plays a major role in financial services disputes resolution but is a ‘one size fits all’ approach to redress altogether fair?
John Virgo,
barrister and
Philip Ryley,
solicitor examine the issue.
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01 February 2007
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Vol 19 No 5 - 01 February 2007
FSA regulatory concepts: from risks to principles
John Tiner’s resignation announcement in January alongside the ever-forward advance of principles-based regulation prompted one of our regular contributors to look at the development of regulatory approaches since the FSA was conceived a decade ago in 1997.
Adam Samuel
looks at the route from a risk-based regulator to one obsessed with treating customers fairly and principles.
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Monitoring and surveillance -lessons from America
The fallout from the Hewlett Packard internal investigation in the US has focussed attention on the extent to which employers can use interception techniques to uncover evidence of wrongdoing.
Dorian Drew
and
Adam Vause
of Norton Rose consider the complex position in the UK and offer some practical guidance.
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Inducements: a European view
With the FSA’s major consultations on the Markets in Financial Instruments Directive (MiFID) launched, the focus now switches to efforts at EU level to clarify the operation of the Directive. The Committee of European Securities Regulators’ (CESR) public consultation on Inducements under MiFID (06-687, December 2006) expresses views which have important implications and are unlikely to command universal acceptance. It is important, says
Richard Stones
of Lovells, that the industry engages in discussion with CESR, since its recommendations are (put at the lowest) likely to influence the Directive’s application in the UK.
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Money matters
Keir Macintosh may be contacted on tel: + 44 (0) 20 7269 1819; email: keirmacintosh@michaelpage.com; www.michaelpage.com. Alternatively, his colleague Lindsay Reid can be reached on tel: +44 (0) 7269 1848; email: lindsayreid@michaelpage.com
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Seeking guidance… on guidance
In November last year FSA set out its plans to encourage greater use of industry guidance. In this article,
Angharad Smith
and
Emma Radmore
of Denton Wilde Sapte look at the proposals in DP 06/5 and recent trends in the move towards a more principles-based approach to regulation. They also look at some potential problems with non-Handbook and non-regulator-driven guidance.
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01 February 2007
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Vol 19 No 5 - 01 February 2007
FSA seeks new chief
John Tiner will step down as chief executive of the FSA in July after nearly four years in post and six at the regulator. Announcing his resignation, Tiner, said he wanted to take on another job in the private sector before considering retirement...
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01 February 2007
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Vol 19 No 5 - 01 February 2007
FSA concentrates on PPI
Payment protection insurance (PPI) is to be the subject of a major FSA thematic review, to be completed by the end of June this year, when the regulator will have visited 200 firms in the sector in two years. The aim is to improve sales standards,..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Mortgage exit fee controls to change lender practice
Lenders will need to justify any rise in mortgage exit administration fees (MEAFs) after a customer has entered into a contract, under measures the FSA has agreed with the Council of Mortgage Lenders. The new provision comes into effect on 28..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Failure to question information costs salesman £20,000
Sean Pignatelli, a former US equity salesman at Credit Suisse First Boston (Europe) Limited (CSFBE) has been fined £20,000 by the FSA for communicating the content of an analyst’s email without determining if it constituted inside..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Capital Mortgage Connections feels enforcement heat over cold calls
Glasgow mortgage broker and packager Capital Mortgage Connections (CMC) has been fined £17,500 for cold calling prospects and so failing to treat customers, including potential clients, fairly. Between 4 April and 17 October 2005, over 85% of..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
MiFID implementation costs may reach £1 billion
The Markets in Financial Instruments Directive is likely to cost between £870m and £1 billion to implement in the UK with ongoing expenditure of about an extra £100m a year according to the FSA. The findings are based on the results..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Home shop firm pays £270,000 for PPI sales flaws
Redcats (Brands) Ltd, which offers products through catalogues and the internet, has been fined £270,000 for selling payment protection insurance (PPI) that may not have been suitable to around 160,100 customers. During the period at issue, 14..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Common platform for MiFID and CRD wins support
Industry has broadly welcomed the FSA’s proposal for a single set of high-level rules – the ‘common platform’ – to give effect to the organisational and systems and controls requirement of the Markets in Financial..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Risk management still needs major work, insurers told
An FSA review of risk management practice by insurers has revealed serious common shortcomings that it wants boards and senior management to address. The process could prove humbling since although most firms have set up oversight committees the..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Gen Re fined UK£1.225 million over improper reinsurance transactions
Gen Re, one of the world’s largest reinsurers, lacked “sufficiently robust” systems and controls to prevent two illegal purported reinsurance transactions, one from 1999, which was renewed three times to 2003, and a second, post..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Key Features to be modified not junked
Plans to change investment disclosure requirements by replacing the existing Key Features Document and illustration with a new Quick Guide and charges and projection sheets have been shelved. FSA-commissioned research discovered that while consumers..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
£0.25 billion rough cost of third party reporting
The cost to firms of providing information to customers and third parties other than the regulator and statutory bodies is in the order of £255m per annum, according to research by Real Assurance Risk Management. The total, based on calendar..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Endowment complaints initiative brings results, study finds
Close attention to endowment complaints handling since July 2005 has been good news for consumers, according to a progress report by the FSA. The regulator identified 22 firms (out of 52 that represent around 90% of the market) that it believed had..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Electronic reporting – more time for non-retail firms
The start date for new financial and non-financial reporting rules under mandatory electronic reporting (MER) will be 1 January 2009, the FSA confirmed in PS07/1, “Integrated Regulatory Reporting (IIR): Certain investment firms”, which..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Prudential rules refined for life insurers
Life insurers will be permitted to create non-attributable expense provisions for non-profit business at a homogeneous risk group level rather than at individual contract level the FSA has confirmed in PS06/14. The rule will also apply to all..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Home and County Mortgages pays £52,500 for poor management
Inflation of customers’ incomes on mortgage applications and weaknesses in its sales processes has cost retail mortgage broker, Home and County Mortgages Ltd (HMCL) a £52,000 penalty. The company, which provides advice exclusively to..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Disclose all commissions, commercial insurance brokers told
General insurers that deal with commercial customers are on notice that they must fully disclose commission payments on request from their clients. In a Dear CEO letter sent on 6 December, Hector Sants, Managing Director Wholesale &..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
GE Capital Bank pays £610,000 for insurance misselling
In 2005 GE Capital Bank (GECB) sold more than 850,000 new insurance policies connected with consumer credit products, principally store cards. It has been fined £610,000 for failing to ensure that the sales procedures adopted by, primarily,..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
Thinking refined on investment entities listing rules
FSA proposed revisions to the listing regime for investment entities in CP06/4 have been modified in response to industry feedback. Although the move to a principles-based approach was welcomed, the regulator has been persuaded that closed-ended..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
W Deb MVL Plc, formerly Williams de Broe, fined £560,000 for accounting and client money breaches
A litany of accounting systems and client money protection breaches stretching back to before N2 have cost W Deb MVL Plc (the new name for Williams de Broe after its acquisition in June 2006), an FSA penalty of £560,000.
Repeated problems in..
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01 February 2007
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Vol 19 No 5 - 01 February 2007
MiFID handbook text signals countdown to implementation
Firms and markets regulated by the FSA will have nine months to gear up for MiFID implementation, on 1 November 2007, following its publication of final handbook text to transpose the directive last month. The FSA, in PS07/2, acknowledges industry..
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007
Enforcement Review – the sequel
The decision making (DEC) and enforcement (ENF) manuals are scheduled for replacement by a new handbook module, DEPP, the FSA announced recently in CP07/2. Unlike DEC, which contains a general explanation of the FSA’s approach to decisions,..
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007
In Principle
The FSA’s priorities might not change year to year – a fair deal for consumers, stable and orderly markets - but the thinking on how to achieve them certainly does. The Business Plan for 2007/08 is based firmly on outgoing chief..
Online Published Date:
01 February 2007
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Vol 19 No 5 - 01 February 2007