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We analyze the distributional effects of macroprudential policy on mortgage cycles by exploiting the U.K. mortgage register and a 2014 15% limit imposed on lenders' high loan-to-income (LTI) mortgages. Constrained lenders issue fewer and more expensive high-LTI mortgages, with stronger effects on low-income borrowers. Unconstrained lenders strongly substitute high-LTI loans in local areas with higher constrained lender presence, but not high-LTI loans to low-income borrowers—consistent with adverse selection problems—implying lower overall credit to low-income borrowers. Consistently, policy-affected areas experience lower house price growth postregulation and, following the Brexit referendum (negative aggregate shock), better house price growth and lower mortgage defaults for low-income borrowers. [ABSTRACT FROM AUTHOR]

This article examines the scope of the FCA 's general nile-making power in s. 137A of FSMA. It sets out two core arguments showing that economic purposes and principles are central to the FCA 's objectives andgeneral functions: (1) the argument from "market function expertise "; and (2) the argument from "competition expertise. These economic purposes and principles shape the rule-making power, and limit the subject matter of the regulator 's rules. [ABSTRACT FROM AUTHOR]

In December 2021, the Financial Conduct Authority (FCA) revised the Listing Rules applicable to companies listed on the London Stock Exchange's (LSE) Main Market to permit the premium-tier listing of companies with specified weighted voting rights shares structures. The revision, broadly based upon the concept of "dual-class stock," was premised on a desire to attract innovative, high-growth firms to the LSE. Founders would now be able to list their firms, sell equity and issue further shares for growth without fully relinquishing voting control. However, the FCA was clearly also concerned that an unconstrained dissociation between voting and cash flow rights could incentivize pernicious behavior on the part of founders. Accordingly, specified weighted voting rights shares structure embodies various conditions that restrain a founder's ability to access the full gamut of advantages that dual-class stock can offer. As a result, specified weighted voting rights shares is more dual-class stock-lite rather than a fully-fledged premium-tier move toward multiple voting rights share structures. Less than two years later, the FCA appears prepared to revisit its approach to dual-class stock. Did the FCA get it wrong with dual-class stock-lite? In this article, each of the conditions attached to the use of specified weighted voting rights shares is scrutinized in the context of whether it appropriately balances the desire of founders for flexibility with public shareholder protection. If the intention was to encourage visionary founders to list their high-growth firms on the LSE, it is understandable that the FCA apparently now has buyer's remorse. [ABSTRACT FROM AUTHOR]

Purpose: Financial crime presents a serious threat to the stability and integrity of the global financial system. To combat illicit financial activities, regulatory bodies worldwide have implemented various measures, including the requirement for financial institutions to assess the financial crime risks they are exposed to in the jurisdictions they operate in. These risks include inadequate anti-money laundering and countering the financing of terrorism frameworks and other financial crime risks that have significant strategic implications for firms' geographical footprints and customer risk classifications. This paper aims to make a contribution to the literature by undertaking a cross-country analysis of 158 countries to shed light on what drives perceived jurisdiction risk of the UK financial services firms. Design/methodology/approach: Capturing firms' perceptions of financial crime risk requires significant data collection efforts, including surveys and interviews with key personnel. This can be highly resource-intensive and may require access to sensitive information that firms may be reluctant to share. Furthermore, the dynamic nature of financial crime risks means that perceptions can change rapidly in response to changes in the regulatory and geopolitical landscape. As a result, capturing and monitoring firms' perceptions of financial crime risks requires ongoing monitoring and analysis. Capturing firms' perceptions of financial crime risks at a cross-jurisdictional level is a particularly complex and challenging task that requires careful consideration of a range of factors. As a result of data limitations, empirical investigation of the factors underlying the firms' perceptions of jurisdiction risk is in its infancy. This paper uses regulatory financial crime data from the UK in a multivariate regression analysis, following a general-to-specific approach where any redundant variables were removed from the general model sequentially. Findings: Results suggest that perceived jurisdiction risk is significantly and positively associated with evasion of tax and regulations, while it is significantly and negatively associated with political stability and regulatory stringency. These have important implications for home and host supervisors with respect to the factors that drive perceived jurisdiction risks and the evaluation of the nature of inherent financial crime risks within regulated firms. The findings confirm the critical role of the shadow economy, political stability and regulatory rigor in shaping jurisdiction risk perceptions. From a policy standpoint, the findings support the case for taking prompt policy action to identify, prioritize and implement specific and targeted measures with respect to the shadow economy, political stability and rigor of regulations to improve international firms' perceptions of jurisdiction risk. Originality/value: While there exists different measures of financial crime risk, it is notoriously challenging to capture firms' perceptions of it, particularly at a cross-jurisdiction level. This is because financial crime risks can vary significantly across different jurisdictions due to differences in legal and regulatory frameworks, cultural norms and levels of economic development. This makes it difficult for firms to compare and evaluate the financial crime risks they face in different jurisdictions. Besides, firms' perceptions of financial crime risks can be influenced by a range of subjective factors, including personal experiences, media coverage and hearsay. These perceptions may not always align with objective risk assessments, which are based on more systematic and empirical methods of risk measurement. This paper contributes to the existing literature by undertaking a cross-country analysis drawing on a unique set of UK regulatory financial crime data, which is based on a total of 1,900 annual financial crime data regulatory return (REP-CRIM) submissions to the UK's Financial Conduct Authority. [ABSTRACT FROM AUTHOR]

The global financial crisis of 2007–08 provided an obvious reason for rethinking finance, its regulation, and benefits for society. Economics experts, in particular, issued policy reports on how to fix the financial system. Whether and how such policy recommendations translated into law is the topic of this article. It introduces a set of theories elaborating on how the legal system may tap social theory in general and economic expertise in particular, arguing for the concept of framing as a focal point. A case study on the Kay Review of UK equity markets tests and illustrates the theory. The study highlights the normative, technical, political, and capture issues that arise all the way down from a specific policy proposal rooted in economic theory and empirical research to the technical details of financial law and concludes with a comment on the current reform efforts of the Financial Conduct Authority on a new consumer duty. Eventually, the case study allows us to reflect on the strengths and limitations of the existing theories of how social theory and law interact and to provide some directions for future research. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is twofold. Firstly, it highlights areas of disconnect between how the financial services sector in the UK approaches the requirement to evidence source of wealth when conducting customer due diligence; the requirements of the UK's laws and regulations in relation to evidence source of wealth; and the expectations of the Financial Conduct Authority (FCA) in this regard. It then proposes an alternative approach to evidencing source of wealth. Design/methodology/approach: Semi-structured interviews have been carried out among compliance professionals in UK financial services. Findings: This paper provides rare insight into the anti-money laundering arrangements of UK banks, an area that has not yet been widely researched in the academic literature. It highlights a lack of legal certainty in the UK's laws and regulation around anti-money laundering and argues that the expectations of the FCA exceed both the letter and the spirit of the laws. It suggests that mixed messages disseminated by the FCA have incentivised banks to shift their focus from financial crime risk (i.e. preventing money laundering and terrorist financing, etc.) towards regulatory risk (i.e. the risk of falling foul of regulatory expectations) and proposes a change to the law and regulatory guidance to enhance the level of legal certainty needed for the law to be effective. Practical implications: The paper makes suggestions for a more practical and risk-based approach to anti-money laundering compliance and for a much-needed change in the law. Originality/value: It provides unique insight into the due diligence challenges of financial services firms and argues for the FCA to propagate a more risk-based approach to enhanced due diligence. [ABSTRACT FROM AUTHOR]

Grant Powell MBCS spoke to Nathalie Lowe and Dr Henrike Mueller from the Financial Conduct Authority about their work in AI and the challenges associated with regulating technically evolving markets. [ABSTRACT FROM AUTHOR]

Law recognizes a necessary (i.e., but-for) factor as a factual cause. However, it is a common misconception that the but-for test is the exclusive test of factual causation. Longstanding case law reveals that a factor may be a factual cause of an outcome, even if it was neither necessary nor sufficient for it. This was recently unanimously confirmed by the Supreme Court of the United Kingdom in Financial Conduct Authority v. Arch Insurance (UK) Ltd (2021). In the law, there seems to be a uniform concept of what it means to be a factual cause, one that is wider than necessity and includes unnecessary and insufficient factors which are recognized as factual causes across a wide variety of legal contexts. This uniform concept of factual cause can be captured in a forensically straightforward way in an "extended but-for test". Appreciation of unnecessary and insufficient factual causes, which are common, provides a more coherent frame in which to view the outcomes of certain earlier cases. It also illuminates the importance for clarity of legal reasoning of separating the context-independent factual cause issue from context-dependent analytical stages such as the scope of the rule and remedy, including loss quantification. [ABSTRACT FROM AUTHOR]

The UK Financial Conduct Authority (FCA) has published a discussion paper on potential future proposals for regulating fiat-backed stablecoins. Under the proposed regime, firms would need to be authorized by the FCA to issue stablecoins and provide custody services. The FCA is considering requirements for maintaining stablecoin value, custody arrangements, and organizational controls. The FCA also discusses the use of stablecoins in payments and the expectations for banks innovating in digital money, including the need for separate entities and protections for retail customers. [Extracted from the article]

This article considers whether collapsed Financial Conduct Authority (FCA)-regulated investment firm London Capital & Finance Pic (LCF), an alleged Ponzi scheme, could have been regarded as operating a "collective investment scheme" and how that concept has been applied to debt instrument-based schemes. The article highlights uncertainties with the collective investment scheme regime in this context, with implications for both the supervision of schemes and enforcement actions. [ABSTRACT FROM AUTHOR]

The shift to online commerce and communication in the global pandemic, the Cambridge Analytica scandal and the cancel culture exacerbated by social media platforms have demonstrated our increasing reliance on digital platforms. Digital regulation is receiving increasing scrutiny globally and, in the UK, as exemplified by the recent Digital Markets and Digital Services Act by the European Union and the establishment of the Digital Markets Unit within the Competition and Markets Authority in the UK. In July 2020, the Competition and Markets Authority, the Information Commissioner's Office and the Office of Communications formed the Digital Regulation Cooperation Forum (DRCF) to coordinate digital regulation between various regulators. In April 2021, the Financial Conduct Authority also joined the DRCF as a full member. Against this backdrop, the paper explores the coordination of digital regulation in the UK and analyses how effective the DRCF is in contributing to this objective. It is argued that to effectively respond to the challenges posed by digital technologies, coordination between various regulatory authorities must be extended and formalised to avoid fragmented enforcement. Whilst the DRCF is a step in the right direction, it needs to engage more closely with other relevant stakeholders. [ABSTRACT FROM AUTHOR]

Pandemic-related business interruption (BI) losses are generally considered 'uninsurable' because, in order to pool sufficient premium revenue to meet valid claims, premiums would be unaffordable for the majority of policyholders. This paper explores whether and how such losses might be made insurable in the U.K. The authors consider post-pandemic governmental responses, including the role of the Financial Conduct Authority (FCA) and the meaning and implications of FCA v Arch Insurance (U.K.) Ltd ([2021] UKSC 1). The central premise of the paper is to highlight the importance of reinsurance in increasing an underwriter's insuring capacity and to illustrate how, with the support of government in the form of a public–private partnership (PPP), 'uninsurable' risks of this type may be made insurable. The authors propose a PPP, 'Pandemic Business Interruption Re', which provides, in their view, a feasible and defensible solution that would confer the benefit of increasing policyholders' faith in the industry's ability to underwrite pandemic-related BI claims and reduce reliance on ex post government aid. [ABSTRACT FROM AUTHOR]

The article discusses three topics related to financial regulations in the United Kingdom. Firstly, the UK has granted equivalence to EEA UCITS funds under the Overseas Funds Regime, allowing overseas funds to market in the UK without a detailed assessment by the Financial Conduct Authority. Secondly, a new UK securitisation regime is set to start on November 1, 2024, with the Amending Regulations supplementing the UK Securitisation Regulations 2024. Lastly, the UK Prudential Regulation Authority has published a letter addressing non-systemic UK banks and building societies, proposing improvements on resolvability and recovery planning. [Extracted from the article]

The UK Financial Conduct Authority (FCA) has published guidance on its anti-greenwashing rule, which requires licensed firms to ensure that references to the sustainability characteristics of products or services are fair, clear, and not misleading. The FCA's guidance sets out expectations for firms subject to the rule, including that sustainability references should be correct, clear, complete, and make fair comparisons. The FCA is also consulting on extending sustainability disclosure requirements to portfolio management firms, with proposed labeling and disclosure requirements coming into force in December 2024 and 2025. [Extracted from the article]

Copyright of Taiwan Law Review is the property of Angle Publishing Co., Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

There is a general consensus that the UK needs strong public equity markets. To help to ensure Britain is well‐positioned on this front, the Financial Conduct Authority reformed the London Stock Exchange's listing regime in 2021 to foster initial public offerings (IPOs). This article outlines and evaluates these IPO‐related reforms, assessing their potential to resuscitate the UK's public equity markets. The article puts the IPO‐related reforms into context by considering whether the fostering of strong equity markets is a sensible policy goal and by assessing what laws governing publicly traded companies can contribute to this endeavour. The article acknowledges that the specific IPO reforms may increase IPO activity but concludes that concerns about strong public markets will continue to exist. This is because the reforms do not address stock market exits or the 'over'‐regulation of public companies which discourages reliance on equity markets. [ABSTRACT FROM AUTHOR]

The FCA's Approach The FCA reviewed each of the retail financial services markets in turn, considering the factual background, particularly Big Tech's entry in the market to date. Keywords: Financial Conduct Authority; FCA; discussion paper; Big Tech; financial services EN Financial Conduct Authority FCA discussion paper Big Tech financial services 59 63 5 04/04/23 20230101 NES 230101 In October 2022, the Financial Conduct Authority (FCA) issued a discussion paper on the potential competition impacts of Big Tech entry and expansion in retail financial services (the Discussion Paper). Part II describes the purpose of the Discussion Paper and Big Tech's activities in the financial services markets in the UK to date, and summarises the FCA's conclusions. [Extracted from the article]

The article discusses the publication of the Public Offers and Admissions to Trading Regulations 2024 in the United Kingdom. These regulations implement a new regime for public offers and admissions to trading, which is part of the designated activities regime (DAR). The DAR gives the Financial Conduct Authority (FCA) rulemaking powers over financial sector activities, such as public offers and listing. The regulations introduce a general prohibition on public offers of securities, but also include exceptions to this prohibition. The FCA will have enhanced powers to make rules for the admission of securities to trading on UK-regulated markets. The article also mentions changes to the scope of the regulatory perimeter, which were influenced by lessons learned from the London Capital & Finance scandal. [Extracted from the article]

The article discusses two separate topics related to the UK financial industry. The first topic is the UK Financial Conduct Authority's (FCA) consultation on proposals for improving transparency in bond and derivatives markets. The FCA is proposing minimum transparency requirements for trading venues and investment firms dealing with certain financial instruments, with waivers and deferrals available for orders above certain thresholds. The second topic is the FCA's final framework for a consolidated tape (CT) for bonds, which aims to collect post-trade information and make it available to the public. The FCA's rules and guidance on the bond CT are expected to come into force in April 2024. [Extracted from the article]

The article discusses the regulatory framework for commodity derivatives in the UK. The UK Financial Conduct Authority (FCA) has launched a consultation on proposed reforms to the framework, which covers position limits, exemptions, reporting, and ancillary activities. The FCA aims to enhance risk identification, respond to market changes, and relieve unnecessary burdens on firms. The proposed reforms include narrowing the application of position limits, amending criteria for setting position limits, establishing accountability thresholds, and introducing new exemptions. The changes are set to take effect on January 1, 2025. [Extracted from the article]

Regulatory actions for short-term debt-relief during the Covid-19 pandemic are facilitating a significant level of indebtedness. We argue that regulators, in leaving the banking sector to manage small business and consumer debtors in 'tailored arrangements', risk allowing financial welfare goals to be unmet. Financial welfare goals are important to the Financial Conduct Authority's (FCA) consumer protection objective and give substantive meaning to the long-term financial stability objective of the Prudential Regulation Authority (PRA). Although the struggles with debt on the part of small and medium-sized businesses and households are not capable of complete resolution by financial regulators, who are constrained by their statutory mandates, we argue that the PRA and FCA should establish a coordinated supervisory framework of 'tailored supervision' for banks' 'tailored arrangements' with their debtors. This proposal allows both regulators to address to an extent the needs of unsophisticated post-pandemic debtors and meet their objectives in a joined-up and holistic manner. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Bankrecht und Bankwirtschaft is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

828 The use of digital platforms in the financial sector requires automated processes in order to collect the large volumes of data which will allow firms to create a shared understanding around rules through technological applications. The UK Financial Conduct Authority launched innovation programmes, i. e. a regulatory sandbox, to assess technologies and expedite the delivery of fintech products. This initiative has been followed by the European Digital Finance Package, which introduced the Pilot Regime for market infrastructure based on distributed ledger technology. Albeit a laudable initiative, the EU sandbox model may face obstacles on account of the different approaches taken by Member States in relieving regulatory requirements which can create a perverse incentive to circumvent prudential rules in the context of risk assessment. This article examines the impact of sandboxes on the operation of digital platforms and considers the extent to which decision-making processes are amenable to digital treatment, and what will be the implications for the quality of regulation and the exercise of judgement by the supervisory authority. It argues that the application of regulatory sandboxes can promote more effective compliance processes, while ensuring transparency and accuracy of enforcement actions. 829 [ABSTRACT FROM AUTHOR]

The UK Prudential Regulation Authority (PRA) has published a letter addressed to non-systemic UK banks and building societies, as well as PRA-regulated international banking subsidiaries operating in the UK, outlining proposals for improvement on resolvability and recovery planning. The PRA's recent review of recovery planning capabilities found that while many firms understood the basics of recovery planning, there were significant areas for improvement, particularly in the development of recovery scenarios and calculation of recovery capacity. The PRA encourages firms to define and calculate their point of non-viability and ensure their recovery capacity calculation reflects the parameters of stress. Firms are expected to consider the PRA's proposals and update their recovery plans accordingly. [Extracted from the article]

The article discusses two developments in the UK banking sector. Firstly, the UK is proposing the design of a future entity for UK Open Banking in order to enhance competition and innovation for the benefit of consumers and businesses. The Joint Regulatory Oversight Committee (JROC) is seeking feedback on the structure, governance, and funding for this entity. Secondly, the UK Prudential Regulator has been granted the power to disapply or modify its rules made under the Financial Services and Markets Act 2000. This power promotes a more nimble approach to regulation and allows the Prudential Regulation Authority (PRA) to consider individual firms' circumstances and business models. [Extracted from the article]

The UK Financial Conduct Authority (FCA) has outlined the future of digital regulation in the country. The FCA's Chief Executive, Nikhil Rathi, discussed the priorities of the Digital Regulation Cooperation Forum (DRCF), which brings together various regulatory bodies to collaborate on digital regulation. The key areas of focus include digital technology, researching digital identity, addressing the issue of Big Tech and data asymmetry, supporting responsible AI, and enhancing transparency and accountability through enforcement investigations. The FCA aims to work with industry and overseas authorities to improve financial services and respond to the challenges presented by AI. [Extracted from the article]

The UK Financial Conduct Authority (FCA) has published a consultation paper on the possibility of extending the Sustainability Disclosure Requirements (SDR) and labeling regime to portfolio management firms. The SDR regime, which was introduced in November 2023, applies sustainability disclosure rules to all FCA-authorized firms and includes labeling and marketing requirements for UK asset managers. The FCA is proposing to extend these requirements to UK-based portfolio management firms, excluding services for overseas clients or funds. The proposed labeling, naming/marketing, and disclosure requirements would come into force in December 2024 and December 2025 for product-level disclosures. The FCA plans to consider feedback and publish final rules in Q2 2024. [Extracted from the article]

After the 2007/2008 financial crisis, the UK government decided that a change in regulation was required to amend the poor control of financial markets. The Financial Services Act 2012 was developed as a result in order to give more control and authority to the regulators of financial markets. Thus, the Financial Conduct Authority (FCA) succeeded the Financial Services Authority (FSA). An area requiring an improvement in regulation was insider trading. Our study examines the effectiveness of the FCA in its duty of regulating insider trading through utilising the event study methodology to assess abnormal returns in the run‐up to the first announcement of mergers. Samples of abnormal returns are examined on periods, under regulation either by the FSA or by the FCA. Practically, stock price data on the London Stock Exchange from 2008 to 2012 and from 2015 to 2019 are investigated. The results from this study determine that abnormal returns are reduced after the implementation of the Financial Services Act 2012; prices are also found to be noisier in the period before the 2012 Act. Insignificant abnormal returns are found in the run‐up to the first announcement of mergers in the 2015–2019 period. This concludes that the FCA is efficient in regulating insider trading. [ABSTRACT FROM AUTHOR]

The UK government has released a draft version of the Short Selling Regulations 2024, which will replace the existing UK Short Selling Regulation. The new regulations broaden the scope of shares covered and eliminate requirements for short positions in sovereign debt or sovereign CDS. The Financial Conduct Authority (FCA) will have emergency powers to address market risks, such as banning short sales or imposing conditions on them. Additionally, the government has published the Future of Payments Review report, which recommends developing a National Payments Vision and Strategy to improve the UK's payments landscape. Other recommendations include improving bank transfer processes, accelerating reform of Strong Customer Authentication requirements, prioritizing consumer protection and clarity in Open Banking, developing an Open Banking alternative payment journey, and reviewing regulatory requirements for FinTechs. [Extracted from the article]

The UK Financial Conduct Authority (FCA) has published its final framework for a consolidated tape (CT) for bonds. The CT is a requirement introduced by MiFID II for transactions in equity and non-equity instruments. The FCA's policy statement sets out the rules and guidance for the bond CT, which are expected to come into force on April 5, 2024. The tender process for the bond CT provider will begin in 2024. The FCA is also seeking feedback on a CT for equities and proposals on payments to data providers. [Extracted from the article]

The UK regulators, including the Bank of England, Prudential Regulation Authority, and Financial Conduct Authority, have proposed rules and expectations for the supervision of critical third parties in the financial sector. This comes in response to concerns about the heavy reliance on unregulated service providers, particularly in the IT sector, whose failure could have systemic consequences. The regulators' rules would only apply to critical third parties that provide services to authorized firms, their service providers, and financial market infrastructures. The proposed approach includes high-level fundamental rules and more detailed operational risk and resilience requirements, as well as self-assessment, testing, and disclosure requirements for critical third parties. The regulators emphasize that the responsibility for assessing risks and conducting due diligence remains with the regulated firms and financial market infrastructures. [Extracted from the article]