Financial Services

Do you use IFRS for the preparation of your financial statement? If so, have you considered the impact of IFRS 16 on your capital requirements?
 

With just 3 months left to achieve compliance with MiFID II implementation due on 3 January 2018, we've highlighted below 7 key areas that are pertinent to most firms across financial services.  

The FCA maintains its focus on culture and conduct in the context of the Senior Managers and Certification Regime (aka the accountability regime).

Last year, the PRA issued a ‘Dear CEO letter’ setting out its intention to review the accuracy of COREP returns. Now, the Regulator has started to press ahead with their review, and has issued a wave of S166 reviews to investigate individual business’ COREP processes and procedures. We now believe that the next step will be for the FCA to take the same approach for those firms that fall under its regulation.

On 19 September, the FCA published Policy Statement 17/19 ahead of the implementation of the second Payment Services Directive (PSD2) through the new Payment Services Regulation (PSR 2017) and revised Electronic Money Regulations (EMR).

On Wednesday, the FCA issued a consultation paper (CP17/25)  on the extension of the Senior Managers & Certification Regime (‘SM&CR’) to those FSMA authorised firms that are not currently in scope of the regime.
The key drivers of this reform are still the same as the original SM&CR that is currently applicable to the banking sector; Improving culture and governance in financial services firms, holding senior managers to high standards through individual accountability and increasing consumer protection remain amongst the highest priorities for the FCA.

As a financial centre, London has long had an ‘offshore’ feel about it. Post-Brexit, those offshore characteristics are likely to strengthen, with implications for the UK’s regulation, taxes and infrastructure.
 

Last year firms were sent a Dear CEO letter on the PRA’s intention to review the accuracy of COREP returns. We now know now that the regulator is currently pressing ahead with a wave of S166 reviews targeted at many of the foreign owned banks.

In addition to changes to market structure, conduct of business and transparency, MiFID II will introduce extensive requirements in respect of internal management, organisational arrangements, individual responsibilities and governance. The reform takes provisions derived from the Capital Requirement Directive (CRD IV) that were originally intended for banks and large institutions, and extends these to all MiFID firms.

With the Prime Minister Theresa May indicating that there is insufficient time to replace European bodies with a new British regulatory regime, the implications of Brexit look to have limited short term impact on Financial Services regulation. However, beyond March 2019, what would a hard or soft Brexit look like in terms of future regulation?

With increased regulatory focus, further complexity for CASS rules, and recording-breaking fines for CASS failings, it is paramount that you have an advisor who combines technical CASS expertise with an in-depth understanding of the industry. However, last year’s introduction by the Financial Reporting Council of rigorous new CASS audit led most fees to increase considerably. But are you getting value for money?

With only seven months to go until its implementation date, MiFID II is one of the most talked-about topics in the financial industry. However, we are still finding that a number of firms fall victim to some misinterpretations and common misconceptions about the changes brought about by MiFID II.

Banks, insurers and designated investment firms undertaking cross-border activities between the UK and the rest of the EU need to provide the Prudential Regulation Authority (PRA) with information on their Brexit contingency plans by 14 July.



 

With an implementation date of 3 January 2018, the deadline for readying your firm for the required changes is rapidly approaching. However, in a recent Moore survey, it was found that only 7% of firms had started their implementation plans and more than half did not even have a plan in place yet to achieve timely compliance.
 
To aid firms in scope of MiFID II, this article highlights the key milestones you need to work towards over the coming nine months.

The FCA announced the opening of the MIFID II authorisations gateway on 30 January. It is thought that around 600 applications will be submitted over the coming months including new applications for authorisation of organised trading facilities, commodities dealers and data reporting service providers. Similarly, variations of permissions and notifications from existing firms that require a change of permission or passporting rights are expected.

The reverse charge VAT rules present a significant risk for partially exempt businesses, but the rules are often overlooked or misunderstood.