Weekly Regulatory Update - week ending 09/10/09
The following is a summary of the new pronouncements since our last Weekly Regulatory
Update.
Financial Services Authority (FSA) Publications
Policy Statements
PS09/16
Strengthening liquidity
CP09/13, CP09/14
standards
including
feedback
on
CP08/22,
Overview:
In this Policy Statement the FSA considers the responses it received to the consultation that
started in September 2007 and sets out the new rules. Specifically, the rules include:
 An updated quantitative regime coupled with a narrow definition of liquid assets;
 Over-arching principles of self-sufficiency and adequacy of liquid resources;
 Enhanced systems and controls requirements;
 Granular and more frequent reporting requirements; and,
 A new regime for foreign branches that operate in the UK.
Applicable to:
This paper affects UK-regulated deposit takers (banks and building societies), including
branches of EEA and other overseas firms operating in the UK.
What happens next?
The FSA plans to consult on the technical consequential amendments to the Handbook in its
October Quarterly Consultation Paper, in time for the December switch-on of the new
regime.
Consultation Papers
CP09/24
Listing regime review
Overview:
This paper sets out amendments to the Listing Rules and the FSA’s response to the
feedback it received to a previous consultation. The FSA has also included some
consultation on two further areas, so is asking for more feedback.
Applicable to:
The paper will be of interest to all firms issuing, advising on, investing in or dealing with, UKlisted securities.
What happens next?
The effective date of the new rules will be 6 April 2010. However, the FSA has decided to
bring forward the timetable for making the Standard segment available to UK companies, so
that the rule changes to implement this will be effective from 6 October 2009.
PLEASE NOTE: This Regulatory Update includes pronouncements up to 4pm Thursday 8th October 2009.
Any pronouncements issued after this time will be included in the next Regulatory Update.
This list is not exhaustive and should not be seen as a substitute for reviewing all such documentation.
CP09/25
Quarterly consultation (No.22)
Overview:
This paper invites comments on miscellaneous amendments to the FSA’s Handbook. It
proposes amendments to:
 The Fees manual (FEES) for application fees for guidance or permission to use one the
advanced prudential calculation approaches under the Capital Requirements Directive
(CRD);
 The Perimeter Guidance manual (PERG) for the introduction of legislation for the
regulation of ‘alternative finance investment bonds’; and
 Various modules of the Handbook, due to the implementation of BIPRU 12 (liquidity
standards).
Applicable to:
The paper is relevant to banks, building societies and certain investment firms affected by
the CRD.
What happens next?
The FSA requests comments by 6 November 2009.
Feedback Statements
FS09/4
Short selling - Feedback on DP09/1
Overview:
In this Feedback Statement the FSA summarises and responds to the feedback it received
to its proposals on regulating short selling in Discussion Paper DP9/01.
The FSA confirms that it intends to pursue enhanced transparency of short selling through
disclosure of significant short positions in all equities. However, it will work towards
agreement on future requirements at an international level rather than introducing a separate
domestic regime. In the meantime it has no plans for immediate changes to its current short
selling requirements.
Applicable to:
This Feedback Statement will be of interest to UK financial sector companies, short sellers
of stock, consumers, other firms and trade bodies and their advisers.
What happens next?
At this stage the FSA is only setting out its current policy stance on short selling.
The FSA is considering the possibility of an additional lower threshold for so-called ‘private’
disclosure to the regulator. In addition, if such a ‘two-tier’ model were to be implemented, the
FSA thinks that there is scope for re-considering whether a separate, lower disclosure
threshold for short positions in rights issue stocks would still be necessary. All of these
issues remain subject to the outcome of the CESR consultation as well as developments
internationally.
PLEASE NOTE: This Regulatory Update includes pronouncements up to 4pm Thursday 8th October 2009.
Any pronouncements issued after this time will be included in the next Regulatory Update.
This list is not exhaustive and should not be seen as a substitute for reviewing all such documentation.
Handbook Publications

‘Handbook Development Newsletter (Issue No. 115)’ – this newsletter
contains:
o Information about recent Handbook-related and other developments;
o Information about recently issued Handbook-related and other
publications;
o An updated timetable for forthcoming publications;
o Information about Consumer publications; and
o A link to the FSA’s Events web page which provides information about
forthcoming conferences and training events.
Press Releases


‘FSA and firms reach agreement on MPPI’ – the FSA and Mortgage Payment
Protection Insurance (MPPI) firms have agreed an industry-wide package of
measures for consumers, including refunds of around £60 million. Firms will
contact customers if their policy is affected, and will make all refunds by the end
of June 2010.
‘FSA fines firm £154,000 for failing to prevent employee fraud’ – the FSA has
fined a London-based investment bank and stockbroker £154,000 for failing to
establish effective controls to guard against employee fraud.
Speeches

‘The City of London Corporation's Annual Reception for the City Office’ – a
speech by Adair Turner, Chairman at the FSA.
Website

‘Financial Promotions Industry Update (No. 3)’ – the FSA has issued a
Financial Promotions Industry Update on Stand-alone Compliance under the
Being Regulated/Financial Promotions/Industry Updates section of its website.
The FSA reminds firms that all financial promotions must be stand-alone
compliant, regardless of their form, content, location or target audience.
BSA Publications
Circulars

6869

6953

6981

6982
‘FSA consultation on a new liquidity reporting regime’ – this Circular
has been updated to note that the FSA has published its final rules on the
liquidity requirements expected of firms. The Bank of England has also
widened the eligibility criteria for Reserve Accounts to help institutions to
manage their liquidity.
‘CLG consultation - Lender repossession and tenants rights’ - this
Circular has been updated to include the draft response from the BSA.
Members are invited to comment on the draft response by Friday 9
October.
‘Q3 Fraud statistics collection’ – this Circular confirms that the BSA is
now collecting Fraud data for the Q3 2009 period.
‘Possessions Register’ – this Circular provides an overview of the
current status of the register for non-CML members and invites
comments from BSA members by Tuesday 13 October.
PLEASE NOTE: This Regulatory Update includes pronouncements up to 4pm Thursday 8th October 2009.
Any pronouncements issued after this time will be included in the next Regulatory Update.
This list is not exhaustive and should not be seen as a substitute for reviewing all such documentation.

6983

6984

6985
‘BSA Mortgage Instructions: Provision of supporting documents’ –
this Circular seeks BSA members’ views on the development of
documents relating to certification by a professional consultant and
disclosure of incentives.
‘Special Resolution Regime - recovery of costs via the FSCS’ - this
Circular invites comment on a draft BSA response to HM Treasury's
consultation document on Regulations that enable it to recover from the
FSCS costs incurred by the Tripartite in applying the Special Resolution
Regime.
‘Partnering for Progress: Shared Services in Practice’ – this Circular
provides details of an event being hosted by the BSA.
Policy Briefs



‘Scottish Government's Repossessions Group’ – this Policy Brief has been
updated following publication of the Home Owner and Debtor Protection
(Scotland) Bill.
‘Liquidity and other prudential requirements’ – this Policy Brief has been
updated to include a summary of the FSA's final policy on liquidity. This will be
amended as the implications of the policy become clearer.
‘Unfair Terms in Consumer Contracts Regulations 1999’ – this Policy Brief
has been updated to note that the OFT has published a follow up to its 2008
report on personal current accounts in the UK.
Press Releases

‘Financial services industry and FSA agree a package to help MPPI
customers’ – the BSA announces the agreement reached between the FSA and
the ABI, BBA, BSA and CML for dealing with recent and possible future changes
to policy terms and conditions affecting some Mortgage Payment Protection
Insurance (MPPI) customers.
CML Publications
Circulars

2443

2444

2445

2446
‘Review of correspondence with customers experiencing payment
difficulties’ – this Circular requests that CML members undertake a
review of their correspondence to borrowers in arrears and to let the CML
know if you are willing to undertake the review. The CML suggests that
members who agree to this request complete the gap analysis by the end
of the year with any changes being implemented by the end of March
2010.
‘Home Owner and Debtor Protection (Scotland) Bill 2009’ – this
Circular states that the CML Scotland would welcome comments from
members to assist in giving evidence on the Bill.
‘Changes to the display of the Lenders' Handbook on the CML
website’ – this Circular states that, for technical reasons, the CML has
had to change the way the CML Lenders’ Handbooks are published on its
website. The data is now being published in PDF format.
‘MPPI: The FSA agreement with the industry’ – this Circular confirms
that the ABI, BBA, BSA and CML have been working together over the
summer to address the FSA’s concerns about increases in premium or
reductions in cover on MPPI policies during the recession. The industry
has reached agreement with the FSA on a table of options that outlines
PLEASE NOTE: This Regulatory Update includes pronouncements up to 4pm Thursday 8th October 2009.
Any pronouncements issued after this time will be included in the next Regulatory Update.
This list is not exhaustive and should not be seen as a substitute for reviewing all such documentation.
what action firms (both distributors and providers) should take at book
level depending on their individual circumstances. The CML states that
lenders need to review all MPPI policies in line with the agreement with
their providers.
Market Update for Members

‘Will the housing market recovery run out of steam?’ – the CML states that:
o Recent rise in house purchase approvals levels off
o Supply of mortgage credit fell in Q3 as funding costs rose
o Demand for mortgage credit rose
o Further signs of improvement in the economic outlook
Banking Code Standards Board

‘Annual Report 2008/2009’ – the BCSB has published its latest annual report on
the subscriber section of its website.
HM Revenue & Customs




‘Child Trust Fund legislation’ – this page on the HMRC website has been
updated to show changes in legislation.
‘CTF Bulletins 37 and 38’ - both bulletins are now available on the HMRC
website.
‘List of authorised ISA Managers’ - the latest list of authorised ISA Managers is
now available on the HMRC website.
‘Child Trust Fund (CTF)’ - the key features page on the HMRC website has
been updated.
Information Commissioner’s Office
Nothing new issued since ‘Weekly Regulatory Update – week ending 02/10/09’.
Financial Ombudsman Service (FOS)
Nothing new issued since ‘Weekly Regulatory Update – week ending 25/09/09’.
Joint Money Laundering Steering Group (JMLSG)
Nothing new issued since ‘Weekly Regulatory Update – week ending 25/09/09’.
Office of Fair Trading
Nothing new issued since ‘Weekly Regulatory Update – week ending 21/08/09’.
Serious Organised Crime Agency (SOCA)
Nothing new issued since ‘Weekly Regulatory Update – week ending 21/08/09’.
PLEASE NOTE: This Regulatory Update includes pronouncements up to 4pm Thursday 8th October 2009.
Any pronouncements issued after this time will be included in the next Regulatory Update.
This list is not exhaustive and should not be seen as a substitute for reviewing all such documentation.