Litigation surrounding film finance schemes continues to rumble on in the High Court. Earlier this month, the High Court in Barness v Ingenious Media Ltd [2019] EWHC 3299 (Ch) granted applications by two banks Coutts and Natwest (“Banks“) to strike out a number of lender claims in a case that is part of the “Ingenious litigation”.
On 6 January 2020, the FCA published a letter addressed to the CEOs of general insurance firms. This letter sets out the FCA’s expectations for firms to be proactive in tackling non-financial misconduct in the sector and envisions that the Senior Managers and Certification Regime (“SM&CR“) will provide “…an opportunity and catalyst to transform the culture in financial services”.
Back in May 2018, the European Parliament and Council of the European Union published Directive (EU) 2018/843, otherwise known as the Fifth Money Laundering Directive (“5MLD”). Following HM Treasury’s consultation exercise on how to transpose this into UK legislation, the awaited implementing instrument was published on 20 December 2019 in the form of the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (the “Amending Regulations”). With the Amending Regulations largely having come into force on 10 January 2020 it is likely to have been particularly challenging for firms to ensure compliance with the new obligations although the FCA has advised that:
‘In assessing our approach to firms that may not be compliant on that date, we will take into account evidence that they have taken sufficient steps before that date to comply with these new obligations.’[1]
Below we consider exactly what the key elements of the Amending Regulations require and some of the steps firms may want to take to ensure compliance:
The Financial Conduct Authority (“FCA”) has issued its first fine to a claims management company since it took over the regulation of the claims management sector eight months ago.
The Financial Ombudsman Service (“FOS”), the body responsible for resolving disputes between consumers, smaller businesses and financial services firms, has announced plans to increase its levies and case fees in 2020.
Last week, the High Court found Genworth Financial Inc. (“Genworth“), liable to pay losses to AXA in the potential sum of £265 million, in respect of compensation that AXA had paid to settle payment protection insurance (“PPI“) misselling claims against two Genworth subsidiaries that were acquired by AXA.
In BGC Brokers LP & others v Tradition (UK) Ltd & others, the Court of Appeal dismissed BGC Brokers LP’s (“Claimant“) appeal against an order allowing inspection by several other defendants of an unredacted settlement agreement between the Claimant and Simon Cuddihy (“Third Defendant“).
The Investment Association (IA) published the Final Report on its Responsible Investment Framework on 18 November 2019 (the Report). The Report was created following an industry-wide consultation led by the IA at the beginning of 2019 regarding the Responsible Investment Framework (the Framework); the proposal for a UK retail product label; and the use of disclosure frameworks.
Responsible Investment
The IA developed the Report in response to a noted increase in interest among investors about where their money goes and how it is invested. “Responsible Investment” is a broad term which according to the IA encompasses:
The Framework
The Framework is the first industry-wide system to categorise common approaches to Responsible Investment and aims to bring clarity and consistency to clients. It is supported by definitions of such common approaches to Responsible Investment in its glossary. In order to avoid duplication of existing well understood and widely adopted terms, explicit links have been made to such terms.
Chris Cummings, Chief Executive of the IA believes that following the publication of the Framework, “the investment management industry can now give its customers a clear picture of the opportunities available to them and the confidence that their chosen product matches their expectations.”
Proposed UK Retail Product Label
A UK retail product label was proposed as a means for investors to quickly identify whether a particular individual is adopting a Responsible Investment approach. The IA believes that it would have the additional benefit of promoting the UK as a leader in Responsible Investment. Although this proposal gained the support of 85% of firms consulted at a fund-level, details of its implementation have yet to be provided.
The use of disclosure frameworks
The final part of the IA’s consultation sought clarity regarding how investment managers are using existing frameworks to disclose:
As there is no one single framework relating to this disclosure, the IA notes that there is a lack of consistency in this area. The European Securities and Markets Authority’s sustainability indicators consultation which is due to be published in Q1 2020 may provide helpful guidance here.
Next Steps
From January 2020, the IA will be asking firms to denote which of their funds should be tagged as having Responsible Investment components. The IA then intends to publish statistics on Responsible Investment characteristics later in 2020. It also plans to set up a working group to consider the use of Responsible Investment terminology in fund documentation, reporting on sustainability and a further review of the proposed UK retail product label.
Guidance for firms is provided in the Report which encourages the use of the Framework, the implementation of appropriate accountability structures to deal with Responsible Investment policies and transparency of communications regarding Responsible Investment.
In Howard and another v Bank of Scotland plc [2019] a claim by borrowers alleging that their lender negligently overvalued their property, was struck out by the High Court last month, the Court deciding that the claim was time-barred under the Limitation Act 1980 (“Act”).
The recently reported High Court decision in Vorotyntseva v Money-4 Ltd (T/A Nebus.com) shows that freezing orders can cover Bitcoin and ethereum cryptocurrency. It is another example of the Courts finding that a cryptoasset is a form of property capable of being the subject of a Court order. The case was heard in 2018, but the judgment was only published last week.
