Search

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]

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]

In this article, we look at the contested role of in-house lawyers in regulated organisations in the financial sector. A recent Financial Conduct Authority consultation on whether to designate the head of legal of banks, insurance companies and other financial firms as 'Senior Managers' and the decision which flowed from it, reflected a flawed view of lawyers as a neutral technocracy of mere legal technicians; we show how the FCA's decision is potentially damaging to the public interest and failed to take into account that in-house lawyers are often important decision-makers and influencers within their organisations. We put the case for an alternative view; that in-house lawyers are professionals, with agency that requires them to act in accordance with ethical norms and means they should be made more accountable for their conduct. [ABSTRACT FROM AUTHOR]

The United Kingdom is the third-largest peer-to-peer (P2P) lending market in the world, which is surpassed only by the two dominant forces in P2P investing, China and the United States of America. As an innovative financial market in the UK, P2P lending brings not only many opportunities but also many risks, especially the loan default risk. In this context, this paper uses binary logistic regression and survival analysis to evaluate default risk and loan performance in UK P2P lending. The empirical results indicate that credit group, loan purpose for capital needs, sector type, loan amount, interest rate, loan term, and the age of the company all have a significant impact on the probability of loan default. Among them, the interest rate, loan term, and loan purpose for capital needs are the three most important determinants of the probability of loan defaults and survival time of loans. [ABSTRACT FROM AUTHOR]

From the early days of the first national lockdown in England, widespread concerns over many different types of insurance claims had been raised. The business interruption losses that the small businesses and enterprises suffered received particular attention and were covered broadly by the national media channels. The policy wordings in question were so varied that it was not possible for any party to provide a clear outcome that will have a widespread effect on such insurance claims. Through the Financial Conduct Authority's involvement, the UK Supreme Court delivered a much-awaited judgment in a test case on the twenty-one selected policy wordings, fourteen of which were held to respond to the Covid-19 related business interruption claims. The significant impact of the test case, which prevented an ongoing uncertainty and avoided protracted litigation for many, is that many thousands of policyholders should now have their claims for business interruption losses paid. [ABSTRACT FROM AUTHOR]

Financial regulators face the persistent issue of being challenged by financial innovations and regulatory arbitrage. This article argues that a functional approach of 'same activity, same risks, same rules' is potentially vague and insufficient, and does not provide clear guidance for regulators. By critically discussing the US Securities Exchange Commission's and UK Financial Conduct Authority's approaches to cryptoasset offers, the paper argues that whether and how regulators respond to financial innovation crucially depends on regulators' institutional structures. These structural limitations provide empowering as well as constraining aspects in relation to regulatory objectives and mandates, shaping financial regulators' responsiveness in different ways. The paper argues that an institutional account of regulatory responsiveness more accurately explains policy responses. The benefits and drawbacks of such policy responsiveness are also crucially shaped by these institutional structures. [ABSTRACT FROM AUTHOR]

Recognising the economic value of London hosting 17 of the world's top 50 FinTech firms, HM Treasury's strategy is determined 'to ensure Britain remains the best place in the world to set up and grow a FinTech business.' The Financial Conduct Authority's 'Sandbox' regime has attracted FinTech start-ups from around the world to test their technology and business with supervision and regulatory protections, providing an opportunity to grow into major businesses. The success of the intuitive Sandbox has however led to it being replicated in jurisdictions worldwide, eager to benefit from the growth of FinTech. Competition for high-calibre start-ups means the UK's post-Brexit Sandbox may need to go further than its existing FinTech Sector Strategy to continuing attracting and developing firms helping the City of London to remain the global centre of finance as perceived in the UK's Industrial Strategy. The article examines existing regulations and analyses how the UK can develop an enhanced structure to both further attract and accommodate legitimate high-calibre FinTech entrepreneurs, whilst offering strong client and investor protections to ensure financial stability. It proposes unprecedented legal and policy reforms for the Sandbox structure, including a permissible model to capitalise on funding from amateur private investors worldwide. [ABSTRACT FROM AUTHOR]

In the UK both the Bank of England and the Financial Conduct Authority have recently carried out experiments using new digital technology for regulatory purposes. The idea is to replace rules written in natural legal language with computer code and to use artificial intelligence for regulatory purposes. This new way of designing regulatory rules is in line with the UK government's vision for the country to become a global leader in digital technology. It is also reflected in the FCA's business plan. The article reviews the technology and the advantages and disadvantages of combining the technology with regulatory law. It then informs the discussion from a broader perspective. It analyses regulatory technology through criteria developed in the mainstream regulatory debate. It contributes to that debate by anticipating problems that will arise as the technology evolves. In addition, the hope is to assist the government in avoiding mistakes that have occurred in the past and creating a better system from the start. [ABSTRACT FROM AUTHOR]

UK pension fund trustees' interpretations of their fiduciary duties may shape pension fund approaches to corporate stewardship and engagement envisioned by the UK Stewardship Code. Data from interviews with pension fund trustees, executives, investment intermediaries and pensions experts reveals interpretive pluralism of the concept of fiduciary duty in the area of pension funds. This article develops a model identifying the spectrum of pension fund engagement, linking interpretations of fiduciary duty to intensity and methods of engagement in practice. The findings help disambiguate the concept of 'Fiduciary Duty', highlighting the practical challenges of Stewardship Code application. These insights are relevant to the ongoing revisions of the Stewardship Code and policy clarifications of the nature of fiduciary duty by the UK Financial Conduct Authority. The paper encourages trustees, regulators and others to consider what role pension fund trustees should have in stewardship, which may not be directly relevant to their fiduciary duties as trustees. [ABSTRACT FROM AUTHOR]

This article examines the new approach to vulnerability developed by Ofgem and the Financial Conduct Authority to see whether it has been implemented at company level and had an impact on the ombudsman. It sets out the context within which this approach has been developed and then looks at its implementation through two case studies. The main lesson from these case studies is that establishing a broad concept of vulnerability, as has been argued for in the academic literature, is just a first step. Operationalising the concept presents major challenges especially in the context of systems dealing with large numbers of consumers. [ABSTRACT FROM AUTHOR]

Modern financial regulation has predominantly been economically-driven,1 progressing from addressing market failures to making markets more competitive and work better.2 The UK Financial Conduct Authority is expressly mandated to pursue regulatory objectives that maintain market integrity and protect consumers (addressing market failures) and to promote competition (making markets work better).3 Both the FCA and its sister regulator, the Prudential Regulation Authority (for banks), have recently adopted innovative regulatory initiatives to promote technologically-driven innovation, aimed at making markets work better. These initiatives are also a response to the recent explosion of technologically-led financial innovation outside of the regulatory perimeter.In promoting financial innovation, we argue that the regulators have insufficiently focused on the need to govern financial innovation more generally. Although this concern may seem premature, the regulatory innovations are increasingly extending the perimeter for regulatory oversight of financial innovations. As the regulatory innovations have the potential to develop into more mature regulatory frameworks for governing financial innovation, we argue that regulators should manage the risks of their current approach and develop a regulatory strategy framework for balancing regulatory objectives and developing regulatory policy. We propose a framework anchored in rationality, consistency and accountability in governing financial innovation. [ABSTRACT FROM PUBLISHER]

The discusses the role of London Interbank Offered Rate (LIBOR) in indicating the average rate at which panel banks may obtain short-term loans in the wholesale funding markets. Topics discussed include its use in broad range of adjustable-rate financial products, including corporate loans and bonds, interest rate swaps, and mortgages; role of Financial Conduct Authority (FCA) in persuading LIBOR panel banks; and comments of Jerome Powell, member of the U.S. Federal Reserve Board on the same.

This paper examines the evidence on the links between problem debt, consumer credit use and poverty to better understand how tackling problems in relation to debt and credit use can contribute to combating poverty. Based on this evidence we recommend four policy and practice interventions for inclusion in an anti-poverty strategy for the UK that would help to increase disposable income and for those already in poverty, help to prevent their financial circumstances from worsening. [ABSTRACT FROM AUTHOR]

Delisting refers to cancelling a company's authorisation to be listed on a stock exchange. It combines questions of company law and securities law. In late 2013, the two most important financial markets in Europe saw significant changes to rules on shareholder protection in delisting situations. While the 2nd Senate of the German Federal Court of Justice abolished shareholder protection in delistings under company law, the United Kingdom Financial Conduct Authority bolstered minority shareholder protection based on securities regulation. This paper examines the policy reasons and the approaches in the United Kingdom and in Germany. It argues that the former is a good example of modern policy-making, in terms of both procedure and content, while the latter displays an old-fashioned understanding of financial markets regulation. The paper argues that the main reason for the Federal Court of Justice's decision was to take a step back from acting as a de facto legislature in company law, thereby accepting inconsistencies in the new legal framework. The paper concludes that there is a serious need for regulatory reform in Germany, undertaken either by the legislature or by the stock exchanges. [ABSTRACT FROM AUTHOR]

The development of global standards has led to a convergence in domestic regulations in the financial services sectors. Principles-based regulations (PBRs) have become essential for effective regulatory efforts in insurance and other financial services because of their flexibility, support for regulatory efficiency and the development of a good compliance culture amongst the regulated. The legal framework of the Nigerian insurance industry mainly contains prescriptive and performance-based regimes that have become ineffective as regulatory strategies. This article recommends the adoption of PBRs from available models found in international standard setting organizations such as the International Association of Insurance Supervisors, other jurisdictions such as the UK's Prudential Regulation Authority and Financial Conduct Authority, together with international trade regimes such as the General Agreement on Trade in Services. It reviews aspects of Nigerian insurance industry regulations supporting PBRs and highlights laws not supportive of PBRs and therefore requiring reform. [ABSTRACT FROM PUBLISHER]

The author discusses the results of a joint report conducted by non-profit financial service New City Agenda and Sir John Cass Business School regarding the banking industry in Great Britain. Topics discussed in the report include organizational culture of banks, the importance culture and ethics in the industry, and the enforcement agenda of the Financial Conduct Authority (FCA). Also mentioned in the report is the significance of ethnographic research.

Behavioral economics is both mainstream and timely. The financial crisis raised important issues of market failure, weak regulation, moral hazard, and our poor understanding of how key markets operate. One therefore expects lawyers and economists to bring the current economic thinking to competition agencies, some of which are already taking note. How should the competition agencies respond? This article examines how competition agencies can consider behavioral economics' implications on four levels: first as a gap filler, that is, to help explain “real world” evidence that neoclassical economic theory cannot explain; second, to assess critically the assumptions of specific policies, such as merger review and cartel prosecutions; third, to revisit fundamental questions, such as what is competition and what are the goals of competition law; and fourth, to assess how behavioral economics will affect the degree of convergence of competition law among the over 100 jurisdictions with competition laws today. [ABSTRACT FROM PUBLISHER]

The article reports developments in the financial regulation in Great Britain. It highlights the Court of Appeal decision that complainants to the Financial Ombudsman Service (OS) would be able to accept a determination awarding them the statutory maximum award. The Financial Conduct Authority (FCA) sets an uncompromising compliance standard for unacceptable payments from product providers to advisors in the retail investment sector.

The article discusses the developments in the financial services industry in Great Britain as of November 1, 2013. Topics include the decision of the Court of Appeal on the case Green & Rowley v. Royal Bank of Scotland PLC concerning interest rate swap, the concerns of the Financial Conduct Authority (FCA) on the impact of payments in service or distribution agreements on the Retail Distribution Review (RDR) objectives and the guidance consultation on inducements and conflict of interests.

The article presents information on several regulatory developments related to the financial services industry in Europe. The British Financial Services Authority (FSA) has proposed a regulatory reform for the Approved Persons Regime. Under the FSA's proposals, the existing controlled functions of the Authority will be split between the Prudential Regulation Authority (PRA) and the British Financial Conduct Authority (FCA).

The article offers information on the developments in financial regulations for banking industry in Great Britain. It states that the draft of the Financial Services (Banking Reform) Bill has been released, aimed at implementing the ring-fencing and depositor preference proposed by the Independent Commission on Banking (ICB). A consultation paper has been issued by the British Financial Services Authority (FSA) on the financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).

The importance of “culture” has emerged as a key regulatory theme around the globe, as regulators, enforcement authorities and courts seek to promote cultural change in the financial services industry. These developments raise interesting and complex questions for firms around what is the “right” culture, how do you measure whether you have it, and whose responsibility is it to set the organisation's culture? Clifford Chance partners and representatives from the UK's Financial Conduct Authority discussed expectations of firms and what needs to be done, at seminars in March 2015. [ABSTRACT FROM PUBLISHER]

The ongoing reform of the regulatory regime for the UK financial services industry is wide ranging and substantial. Whilst much of the attention has been grabbed by the introduction of the headline-inducing criminal offence of "reckless management" of a failed financial institution, much of the real impact of the changes will be felt as a result of other provisions. Two such provisions relate to the new power given to the Financial Conduct Authority (FCA) to publish information about enforcement action at a far earlier stage, and the reversed burden of proof for "Senior Managers" under the new regime. It is in the detail of such provisions, however, where the full ramifications, and unintended consequences, of change may have been underestimated. One such consequence may be the impact which these two provisions may have on the attitude and approach of firms to settlement of significant enforcement actions taken against them by the FCA (and by the Prudential Regulatory Authority). [ABSTRACT FROM AUTHOR]

The author reflects on the issues involving the transfer of the product regulation and governance from the Great Britain Financial Services Authority (FSA) to Prudential Regulation Authority (PRA) and Great Britain Financial Conduct Authority (FCA), effective on April 1, 2013. The author mentions that the fitness of the product intervention into a system of regulation is the first question on the regulatory responsibility. He adds that the regulation on product safety is also another issue.

The author reflects on the enforcement actions of the U.S. Securities and Exchange Commission (SEC) and the British Financial Conduct Authority (FCA) and the Financial Services Authority (FSA) against banks and other financial institutions that do not comply with financial regulations. He believes that the implementation of enforcement actions does not guarantee higher levels of financial regulation compliance. He also discusses the increase in fines imposed the by the financial regulators.

An introduction is presented in which the editor discusses several reports published within the issue on topics including the scope of regulatory perimeter, the risk-based system of supervision operated by the Financial Conduct Authority (FCA), and the role of rules in the FCA system of regulation.