FCA Hands Out More Fines for Client Money Breaches

On 26 November 2013, the FCA published a final notice and accompanying press release levying a fine of GBP 900,200 on the asset manager SEI Investments (Europe) Limited (SEI) for failing to arrange adequate protection of client money in the period from 1 November 2007 to 4 October 2012.

ECB President on SSM

Another speech on the Single Supervisory Mechanism (SSM) from the European Central Bank (ECB) this time by ECB President, Mario Draghi, titled “The future of Europe” was presented in Frankfurt on 22 November 2013.

CS Takes the Sub Way

This is a link to an FT article explaining the changes currently being implemented by Credit Suisse to its legal structure in response to the resolution planning requirements of its main regulator.

ECB speech on SSM and entrance into MoU with EU Council

On 20 November 2013, the European Central Bank (ECB) published a speech given by the ECB executive board member, Yves Mersch, on the ECB’s perspective on the future of the European banking union. 

EU Parliament Delays RRD

FSB Updates G-SIB List

On 11 November 2013, the Financial Stability Board (FSB) published an updated list of global systemically important banks (G-SIBs) using end-2012 data.

The Basel Committee on Banking Supervision (BCBS) has also separately published the denominators used to calculate G-SIB scores and the Cut-off score and bucket thresholds that were used to allocate G-SIBs to particular buckets. The denominators are to be updated annually, while the cut-off score and bucket thresholds will remain fixed until November 2017, the date when the first three year review of the G-SIB assessment methodology is due to completed.

ECB thumbs up for the SRM

The ECB has published its legal opinion on the Single Resolution Mechanism (SRM), a short summary follows:

• The SRM should include all EU credit institutions
• Resolution should only be triggered by a supervisory assessment of “failing or likely to fail”
• The SRM should not require new legislation, Article 114 of the Treaty should suffice as a legal basis
• The ECB supports early implementation of the bail-in tool (currently 2018)
• Resolution financing must be provided by the Single Bank Resolution Fund. The ECB proposes a “temporary, fiscally neutral backstop” to the SBRF in the form of a credit line supplied by Member States, but recoupable from the financial industry
• The ECB seeks representation as an observer in all plenary and executive meetings of the Single Resolution Board

The opinion voices its full support for the SRM which it views as a necessary complement to the Single Supervisory Mechanism, although it considers it crucial that the responsibilities of supervisory and resolution authorities are kept distinct.  The ECB regards a fully-functioning single supervisory mechanism as a vital precondition for the establishment of the SRM, it therefore strongly supports adoption of the SSM legislation during the Parliament’s current term.  This being the case, the ECB voices its support for the SRM to become effective as of 1^st January 2015.

The 32 page opinion contains little that is unexpected; it is notable though, for its bullish tone on scope and timing of implementation. Perhaps it may be unwise to rely on delay.

IOSCO Publishes Responses to CPSS/IOSCO Consultative Report on RRP for FMI

On 8 November 2013, the International Organization of Securities Commissions (IOSCO) published links to the public responses it has received to the consultative report published jointly with the Committee on Payment and Settlement Services (CPSS) in August 2013.

Responses include:

• The Alternative Investment Management Association (AIMA) and Managed Funds Association (AIM).
• The European Banking Federation (EBF).

FCA Legislation Update

EBA Asset Encumbrance Rules Add to the Data Headache