The FCA is proposing to allow asset managers to rebundle payments for third-party research and trade execution. By Rob Moulton, Nicola Higgs, and Charlotte Collins On 10 April 2024, the FCA published its much-anticipated Consultation Paper on payment optionality for investment research (CP24/7). The Investment Research Review made a series of recommendations in the summer of 2023 to help boost the UK investment research market, which the government committed to taking forward (see this Latham blog post). One of the key recommendations was that the FCA should amend its rules on research unbund ..read more

The Proposal clarifies the FDIC’s bank merger approval process but may prove challenging for new large bank consolidations with the FDIC as the primary regulator. By Arthur S. Long, Pia Naib, and Deric Behar On March 21, 2024, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved Proposed Revisions to its Statement of Policy on Bank Merger Transactions (the Proposal). The Proposal adopts a principles-based approach and aims to update, strengthen, and clarify the FDIC’s policies and expectations on the evaluation of bank merger transactions[1] subject to FDIC ..read more

This latest example of strategic coordination between Hong Kong regulators confirms a broader regulatory mission and shared objectives. By Dominic Geiser, Truman Mak, Evangeline Tsui, and Charlotte Wong On 5 March 2024, the Hong Kong Stock Exchange (HKEx) issued a Statement of Disciplinary Action (Statement) against two former directors (the Former Directors) of a company listed on the Growth Enterprise Market (GEM) of the HKEx for misappropriating company funds during the listing process. The disciplinary action followed efforts by the HKEx and the Securities and Futures Commission (SFC) to ..read more

The Sexism in the City report highlights key issues affecting women in financial services and sets out a number of recommendations to address them. By Nell Perks, Ella McGinn, and Charlotte Collins On 8 March 2024, the House of Commons Treasury Committee published its report from the Sexism in the City inquiry, which sought to explore progress in four key areas affecting women in financial services since the Committee’s Women in Finance report was published in 2018. Overall, the report finds that “not much” has changed in the past five years, with many of the barriers identified in 2018 remai ..read more

The FCA found that wholesale data markets can be improved, but has ruled out a significant intervention. By David Little, Becky Critchley, Oscar Hayward, and Effie Stathaki The FCA has published the findings of its wholesale data market study (MS23/1.5), which examined competition in the markets for credit ratings data, benchmarks, and market data vendor services. It follows the publication of an Update Report in August 2023, which outlined the FCA’s provisional findings regarding potential competition concerns and communicated the FCA’s provisional decision not to make a Market Investigation ..read more

UK Chancellor launches consultation on the proposed Private Intermittent Securities and Capital Exchange System (PISCES) as part of the Spring Budget. By Mark Austin, Rob Moulton, Anna Ngo, Frederick Gardner, Charlotte Collins, and Johannes Poon On 6 March 2024, HM Treasury published a consultation paper seeking industry feedback on the UK’s proposed new regulated crossover market, the Private Intermittent Securities and Capital Exchange System (PISCES). PISCES would allow private companies to trade their securities in a controlled environment and on an intermittent basis — to go “public” for ..read more

FCA finds firms have been working hard to embed the Duty, but there remains room for improvement. By Becky Critchley and Charlotte Collins On 20 February 2024, the FCA published more information on the Consumer Duty, including a publication highlighting good practices and areas for improvement. The FCA also used a related speech to remind firms of the 31 July 2024 deadline for applying the Duty to closed products and services, and for producing the first annual board report assessing whether the firm is delivering good outcomes for customers. Lastly, the FCA published the findings from a surv ..read more

The FCA plans to streamline its approach to enforcement and publicise investigations at an early stage. By Andrea Monks, Rob Moulton, Nell Perks, Anna James, and Charlotte Collins On 27 February 2024, the FCA published a Consultation Paper (CP24/2) on its proposed new approach to publicising enforcement investigations and changes to the FCA Enforcement Guide (EG). The FCA also published a related speech given by Therese Chambers, joint Executive Director of Enforcement and Market Oversight. In summary, the FCA hopes to deliver “impactful deterrence” by: Focusing its efforts and resources on ..read more

Recent changes to the PRA’s approach to enforcement show an increased focus on expediting the investigative process and incentivising early admissions. By Andrea Monks, Rob Moulton, and Anna James On 30 January 2024, the Bank of England (the Bank) unveiled a number of changes to the Prudential Regulation Authority’s (the PRA’s) approach to enforcement (PS1/24), including the introduction of an Early Account Scheme and Enhanced Settlement Discount. The changes largely reflect the proposals included in the Bank’s Consultation paper published in May 2023 (CP9/23). Introduction of the Early Accou ..read more

Implementation of Basel Committee cryptoassets standard to provide additional clarity for banks looking to engage in cryptoassets business. By Simon Hawkins and Adrian Fong On 7 February 2024, the Hong Kong Monetary Authority (HKMA) released a consultation paper on its proposal for implementing new regulations on the prudential treatment of cryptoasset exposures (Consultation Paper). The Consultation Paper comes shortly after the Financial Services and the Treasury Bureau and the HKMA issued a consultation paper in December 2023 outlining their legislative proposal for a regulatory regime gov ..read more