Odey’s overreach tested accountability at own firm

When the executive committee of Odey Asset Management sought to conduct a disciplinary process against the founder and owner, he wasn’t having a bar of it. Denis O’Connor explores the events that led to a clash between a colourful industry figure and the regulator’s interpretation of its conduct rules.

Enforcement, Legal actions, disputes & redress, Approved persons, Principles, conflicts & ethics, Senior management accountability, Asset management

The case for Europe’s own SEC

Unified oversight of financial markets within the European Union, along with a consolidated tape of trading data, would strengthen consistency of regulatory standards, plus enhance market integrity, competitiveness and growth. There would be significant ramifications both in and outside the bloc, comments Monique Melis.

Cross-border issues, European Union, Policy & supervision, Wider trends, Trading activities

Refocus on Training and Competence

Amid the constant pressure of regulatory exigencies, it’s easy to neglect the fundamentals. Training and competence matters; indeed, the scope of this rulebook should extend to more players in the financial services ecosystem, writes Adam Samuel.

Rules, reviews & policy, Principles, conflicts & ethics, Systems & controls, Training & competence, Compliance role & skills

A costly miscalculation: Nvayo and the price of resistance

Regulatory battles may often best be fought in remediation efforts rather than legal challenges, a recent case illustrates. By Christian Blackwell

Money laundering & sanctions, Legal actions, disputes & redress, Systems & controls, Deposits, payment services & e-money

Where now for FCA’s enforcement strategy?

Therese Chambers and Steve Smart have made their mark since they stepped into view as co-directors of Enforcement at the Financial Conduct Authority two years ago. Despite battling controversies, the duo appear to be making progress towards some of their goals, reports Neasa MacErlean.

Enforcement, Legal actions, disputes & redress, Supervision, Wider trends, Compliance role & skills
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FOS under threat from civil-servant-speak

It all started at the Mansion House. The Chancellor of the Exchequer’s November 2024 speech commented:

“I have also heard from many of you that our approach to redress can cause uncertainty and be a drag on investment...”

What DEI developments mean for UK-regulated firms

In the autumn of 2023, the Financial Conduct Authority and Prudential Regulation Authority published consultation papers setting out an intent to achieve “greater levels of diversity and inclusion”.

International

Omnibus Regulation sets EU ESG reforms in motion

Draft proposals to simplify and streamline the European Union’s multiple corporate sustainability regimes were published at the end of February. Alessandro De Nicola discusses this key initiative.

The landscape of environmental, social and governance compliance is shifting rapidly.

Cross-border issues, European Union, Directives, Wider trends, Governance & culture, Risk management

Authorisation of cryptoasset firms under MiCA clarified

The European Union’s comprehensive framework for the regulation of cryptoassets has been supplemented with a briefing on threshold requirements for market participants. Martin Dowdall and Shaanil Senarath-Dassanayake unpack the contents and set out what this means for cryptoasset service providers seeking authorisation under MiCA.

ESMA aims to use the briefing to promote supervisory convergence across the EU and clarify regulatory expectations for National Competent Authorities and market participants.

European Union, Directives, Policy & supervision, Authorisation, permissions & control, Technology
High level standards

How to tackle the ‘other side’ of misconduct

Financial and non-financial misconduct tend to walk hand-in-hand. Rob Mason explores the regulator’s recent focus on behavioural wrongdoing in the industry, its impacts on culture, along with steps firms can take to address conduct risks.

Identifying tell-tale signs of market manipulation was a challenge, but one that the industry understood. Non-financial misconduct is presenting firms with a trickier challenge.

Approved persons, Governance & culture, Principles, conflicts & ethics, Systems & controls

Practical steps for investment firms preparing for a CASS audit

The deadline for submitting CASS reports is four months after year-end and the audit process is often fast-paced, with little room to stop and reflect. Oliver Hawes sets out suggestions for firms both ahead of and following their audits to smooth the process.

The FCA states the importance of CASS 6 and 7 audit reports both in recent ‘Dear CEO’ letters as well as in correspondence received by firms following the submission of CASS reports.

Systems & controls, Client assets, Wholesale, Compliance role & skills
Products & delivery

Traders’ online chats cost banks £100m in competition penalties

A group of five banks were caught out when their employees’ private internet exchanges were considered by authorities to have breached the Competition Act 1998. Firms face legal risks in this area that need to be identified, monitored and managed, writes Denis O’Connor.

Citi, HSBC, Morgan Stanley and the Royal Bank of Canada (RBC) all agreed to pay substantial fines to the CMA. Deutsche Bank did not receive a fine.

Enforcement, Systems & controls, Trading activities, Securities & derivatives, Competition

Risky business: FCA combats the rise of finfluencers

There is a worrying disparity between the level of trust placed by younger adults in social media influencers and the often detrimental outcomes of their advice on financial matters. Richard Coopey discusses the problem and a clampdown from the regulator.

 

Enforcement, Legal actions, disputes & redress, Rules, reviews & policy, Wider trends, Technology, Financial promotions & disclosure
Conduct of business

Flawed oversight let trader mask losses with fake transactions

Day-to-day reporting, reconciliation and verification processes at Macquarie Bank in London had deficiencies that allowed an employee to record and amend 426 fictitious trades over a 20-month period. Denis O’Connor analyses what went wrong.

 

Enforcement, Systems & controls, Trading activities

Preparation is key: CASS 15 for payments and e-money firms

With recent insolvencies revealing a 65 per cent shortfall in customer funds being protected, Oliver Hawes summarises new safeguarding rules for the payments sector and suggests how management teams can prepare for the changes.

 

Rules, reviews & policy, Systems & controls, Client assets, Record-keeping, Reporting & disclosures, Deposits, payment services & e-money
Sectors

Ins and outs of ICOBS

Though it collates a crucial body of rules that affect all of our lives, this meandering and neglected tome is greatly in need of revision. Adam Samuel guides a tour through the Insurance Conduct of Business Sourcebook.

 

Rules, reviews & policy, Wider trends, Insurance, Insurers

Growing pains: Starling Bank’s £29m penalty for sanctions chaos

Starling, a digital challenger bank, expanded far quicker than its capacity to maintain compliance with sanctions screening as well as other financial crime control requirements. As a result, the regulator has clipped its wings by imposing substantial remediation measures, reports Denis O’Connor.

In January 2023, Starling learned that, since 2017, its automated screening system had been screening customers only against a fraction of the full list of those subject to United Kingdom financial sanctions.

Enforcement, Money laundering & sanctions, Systems & controls, Retail institutions