Doubling down? FCA contemplates more criminal AML investigations

When FCA Director of Enforcement and Market Oversight Mark Steward spoke in London last month, his comments could hardly have been more timely. Hot on the heels of his remarks on dual-track (civil and criminal) AML investigations came a significant fine arising out of a firm’s AML systems and controls. It also came as the countdown to entry into force of the fifth AML directive continues; and his observations on escalation protocols highlight the continuing importance of the senior managers’ and certification regime (SMCR). Continue Reading

Employment Appeal Tribunal provides guidance on the FCA’s ‘fit and proper person’ test

Judge holding gavel in courtroom

In Radia v Jeffries International Limited, UKEAT/0123/18 the Employment Appeal Tribunal (“EAT”) held that an employer, Jeffries International Limited (“Jeffries”), properly dismissesd an employee where Jeffries considered that the employee fell short of the Financial Conduct Authority’s (“FCA”) ‘fit and proper person’ requirements that are set out in the FCA Handbook.

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The Partly Contested Process – a part success?

FCA

A recent speech by the Director of Enforcement and Market Oversight at the Financial Conduct Authority (“FCA”) has highlighted the progress of the partly contested process for disciplinary action. The first three cases using the process have now completed, although only details as to the first two cases were available as the time of going to press.

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FCA gives a final warning on misleading adverts

FCA

Back in January, the Financial Conduct Authority (“FCA”) published a letter to the CEOs of regulated firms warning them against misleading financial promotions. As we noted in our previous blog, onthe subject, the letter specifically concerned firms not making clear which parts of their business are subject to FCA regulation and, importantly, which are not.

It appears that the letter may not have had the desired effect.

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FCA hands out second large fine in as many weeks for transaction reporting failures

The Financial Conduct Authority has imposed a fine of £34,344,700 on Goldman Sachs International (“GSI”) for breaches of transaction reporting obligations. The fine comes just over a week after the FCA imposed a £27,599,400 fine against UBS (which we considered in an earlier blog post).

Both fines result from breaches of obligations imposed by MiFID (the Markets in Financial Instruments Directive (2004/39/EC), as well as a breach of Principle 3 of the FCA’s Principles of Business, under which firms must take reasonable care to organize and control their affairs responsibly and effectively, with adequate risk management systems.  Continue Reading

FCA insights on cyber risk

FCA

The Financial Conduct Authority (“FCA”) has just published an Industry Insights document (“Insights”) on cyber security. Whilst not containing any formal guidance or rules, the Insights highlight the risks of cyber attacks to FCA regulated firms and confirms industry best practice around the key areas relating to cyber resilience: governance, identification, protection, detection, situational awareness, response and recovery, and testing.

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FCA puts the spotlight on debt management firms in second thematic review

In 2014 the FCA took over responsibility for regulation of consumer credit. In 2015 it conducted its first thematic review of the debt management sector, looking at commercial and not-for-profit firms that provide debt advice and administer debt management plans. The FCA’s goal was to improve outcomes for customers in what is perceived to be a high risk sector in terms of potential customer detriment.

In its 2015 review, the FCA identified significant concerns with the quality of advice provided, particularly by commercial providers, and significant non-compliance with consumer credit rules. The FCA found an unacceptably low standard of advice provided by fee-charging debt management firms. Consequently, the FCA decided to engage in ongoing supervisory work to ensure debt management firms ‘raised their game’. To that end, it conducted a second thematic review, the results of which have just been published.

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UBS fined £27.6m for transaction reporting failures

The Financial Conduct Authority has imposed a fine of £27,599,400 on UBS AG for breaches of transaction reporting obligations imposed by MiFID (the Markets in Financial Instruments Directive (2004/39/EC), as well as a breach of Principle 3 of the FCA’s Principles of Business, which requires regulated firms to take reasonable care to organize and control their affairs responsibly and effectively, with adequate risk management systems.

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