This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FSA, the UKLA, the Upper Tribunal, the Financial Ombudsman Service and the London Stock Exchange over the past week, with links to the full documents where these are available.
We hope that you will find this update useful. If you have any queries about any of the information in this update or financial services regulatory matters generally, please contact one of the individuals listed in the Contacts' section of this publication.
Consultation papers:
22 August: Restrictions on the retail distribution of UCIS and similar products. The FSA is consulting on changing its rules to ban the promotion of Unregulated Collective Investment Schemes (UCIS) and close substitutes to ordinary retail investors in the UK. The FSA seeks to ban the promotion of UCIS and close substitutes to ordinary retail investors in the UK as a result of finding that significant levels of retail promotions and sales of UCIS are failing to meet its requirements, exposing ordinary investors to potentially significant detriment. The deadline for responses is 14 November 2012. Final rules are expected in the first quarter of 2013.
http://www.fsa.gov.uk/library/policy/ cp/2012/12-19.shtml
Discussion papers:
No new developments this week.
Policy statements:
No new developments this week.l
Press releases:
22 August: FSA proposes to ban the promotion of UCIS and similar products to ordinary retail investors. The FSA has published proposals to ban the promotion of Unregulated Collective Investment Schemes (UCIS) and similar products to the vast majority of retail investors in the UK. This means that promotions in the retail market will generally be restricted to sophisticated investors and high net worth individuals for whom the products are more likely to be suitable.
http://www.fsa.gov.uk/library/ communication/pr/2012/083.shtml
20 August: Insider dealers ordered to pay £1.5m in confiscation. Confiscation Orders totalling £1,534,000 have been made against Christian and Angie Littlewood at Southwark Crown Court. They were each ordered to pay £767,000 which is a sum greater than the profit they gained from their insider dealing. The Order will be paid out of funds and assets which were restrained by the Court on the application by the FSA at the time the Littlewoods were arrested. Mr Littlewood was sentenced to three years and four months in custody, and Mrs Littlewood was sentenced to twelve months suspended for two years. A third defendant, Helmy Omar Sa'aid, was sentenced to two years in custody, having had a previous Confiscation Order made against him for £640,000. The Littlewoods have also been prohibited by the FSA from performing any function in relation to any regulated activity carried out by an authorised person, exempt person or exempt professional firm, pursuant to section 56 of the Financial Services and Markets Act 2000, on the grounds they are not fit and proper persons.
http://www.fsa.gov.uk/library/communication/pr/2012/082. shtml
Speeches: No new developments this week.
Bulletins and newsletters:
No new developments this week.
Final notices:
22 August: Tony Sanham (formerly trading as Tony Sanham Associates). The FSA has issued a Final Notice cancelling Mr Sanham's Part IV permission under FSMA. As a result of failure to conduct regulated activity over a period of 12 months, the FSA asked Mr Sanham on a number of occasions to apply to cancel his permission but he has declined to do so. Accordingly, his Part IV permission was cancelled.
http://www.fsa.gov.uk/static/pubs/final/tony_sanham.pdf
Application refusals:
No new developments this week.
Approved person refusals:
No new developments this week.
Research publications:
No new developments this week.
Consumer research:
No new developments this week.
Other FSA publications:
22 August: Revised Remuneration Code self-assessment templates and tables. The FSA has published revised Remuneration Code self-assessment templates and tables. The templates allow firms to record their remuneration polices, practices and procedures and assess their compliance with the FSA's code whilst the staff list tables allow firms to record all of the Remuneration Code staff identified for the current performance year.
http://www.fsa.gov.uk/about/what/international/ remuneration#1
21 August: Assessing the possible sources of systemic risk from hedge funds. In this paper, the FSA sets out the results of its latest Hedge Fund Survey (HFS) conducted in March and the Hedge Fund as Counterparty Survey (HFACS) conducted in April 2012. Hedge funds are deemed by the FSA to have the potential to pose systemic risks to financial stability if they are individually very large or leveraged. The HFS and HFACS are considered important tools in assessing the nature and extent of risks to financial stability from outside the boundary of regulation, as well as bank and prime broker interactions with the hedge fund industry. The FSA conducts both surveys every six months to examine and identify these risks, and to inform its supervisory work.
http://www.fsa.gov.uk/static/pubs/other/hedge-fund-report-aug2012.pdf
17 August: Complaints scheme for non-FSMA complaints about the FSA. The FSA has published a new webpage relating to complaints about itself under legislation other than the Financial Services and Markets Act 2000. Under the current complaints scheme, complaints against the FSA may be investigated by the Financial Services Complaints Commissioner if the complainant is dissatisfied with the FSA's investigation. Certain legislation (the PSD, EMD and BNR) does not contain provision for any complainant to take their complaint against the FSA to the Complaints Commissioner, therefore the FSA has made arrangements for these complaints to be dealt with by a senior member of internal staff not involved in the matter about which the complaint is being made.
UKLA publications:
No new developments this week.
Upper Tribunal (Tax and Chancery Chamber) (formerly Financial Services and Markets Tribunal (FSMT)):
23 August: Upper Tribunal strikes out references by Quarters Trustees Limited directors. The Upper Tribunal (Tax and Chancery Chamber) has granted applications by the Pensions Regulator and the FSA to strike out references by Quarters Trustees Limited and its two directors. In this case, the applicants had referred the FSA's decision to withdraw their approval and prohibit them from performing functions in relation to any regulated activity and the Regulator's order prohibiting them from acting as trustees of pension schemes. The case was struck out on the grounds that the applicants had failed to cooperate, and that there was no reasonable prospect of success.
Financial Ombudsman Service (FOS): No new developments this week.
London Stock Exchange (LSE):
No new developments this week.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
