Reg-Alert

Reg-Alert
Regulatory News and Updates

2022/08/03 11:01 - Financial Conduct Authority
The FCA confirms new rules to make authorised financial firms more responsible for their appointed representatives (ARs).

ARs are not authorised by the FCA – they can offer certain financial services or products under the responsibility of authorised firms (known as principals). Principal firms are responsible for ensuring their ARs comply with our rules. While some principals do this effectively, many do not adequately oversee the activities of their ARs.
We think the App Rep system was a terrible idea from the start. Figures show that ARs account for more than 60% of the total value of recent claims to the Financial Services Compensation Scheme. They also generate up to 400% more supervisory cases and complaints than other directly authorised firms.
2022/08/01 11:09 - Financial Conduct Authority
The Financial Conduct Authority (FCA) has finalised stronger rules to help tackle misleading adverts that encourage investing in high-risk products.

Under the stronger rules, firms approving and issuing marketing must have appropriate expertise, and firms marketing some types of high-risk investments will need to conduct better checks to ensure consumers and their investments are well matched.
"The new rules will not apply to cryptoasset promotions. Once the Government and Parliament confirms in legislation how crypto marketing will be brought into the FCA's remit, the FCA will publish final rules on the promotion of qualifying cryptoassets. These rules are likely to follow the same approach as those for other high-risk investments. Crypto remains high risk so people need to be prepared to lose all their money if they choose to invest in cryptoassets."
2022/07/27 08:08 - Financial Conduct Authority
The Financial Conduct Authority (FCA) has confirmed its plans to bring in a new Consumer Duty, which will fundamentally improve how firms serve consumers. It will set higher and clearer standards of consumer protection across financial services and require firms to put their customers' needs first.

The Duty is made up of an overarching principle and new rules firms will have to follow. It will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.
It will take considerable time for the effects of these new rules to filter down into consequences for badly behaved firms and that will be the real test of how effective the Consumer Duty regime has been.
The FCA has fined The TJM Partnership Limited (in liquidation) £2,038,700 for failing to ensure it had effective systems and controls to identify and reduce the risk of financial crime and money laundering in its business. This is the third case brought by the FCA in relation to cum-ex trading and the largest fine so far. This reflects the multiple examples of serious misconduct over a lengthy period.

TJM did not have adequate procedures, systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to trading on behalf of clients of the Solo Group between January 2014 and November 2015. It also failed to adequately apply its anti-money laundering policies and did not properly assess, monitor and mitigate the risk of financial crime.
"TJM executed trading to the value of approximately £59 billion in Danish equities and £20 billion in Belgian equities and received commission of £1.4 million, which was a significant proportion of the firm's revenue in the period." The circular trading pattern should have appeared suspicious to any properly trained MLRO or brokers.
2022/07/14 22:00 - Financial Conduct Authority
Speech by Nikhil Rathi, our Chief Executive, delivered at the Peterson Institute for International Economics.
As part of its work in response to the increased cost of living, the FCA has told banks they must treat small business customers fairly when collecting and recovering debts.

A review of 11 bank's collection practices identified a number of issues, including:

Lenders not treating small businesses fairly when they try to agree a sustainable payment plan – for example, arranging payment plans which are clearly unaffordable based on the information provided by the customer.
Staff not having the right training to provide effective support to customers and make fair decisions about cases.
Lenders not having clear policies to help staff identify and support vulnerable customers – meaning these customers may be missing out on the support they need.
Not having quality assurance and testing for their processes to ensure that they deliver fair results for consumers - this can mean problems going undetected.


The FCA has provided feedback to the individual firms it reviewed. However, it wants to see the whole sector take action. It has written to the chairs of all retail banks with small business customers. The letter tells the boards of these banks to ensure that they are meeting the FCA's expectations and to inform the regulator if they are unable to do so.
Small business are likely to be classified as Retail Clients under MiFID. Firms should ensure they are treating these customers fairly and ensuring they receive all support and protections required under this classification.
2022/07/08 07:15 - Financial Conduct Authority
HM Treasury has today announced the appointment of Ashley Alder as the new Chair of the FCA.

Ashley is currently Chief Executive Officer of the Securities and Futures Commission (SFC) in Hong Kong, a role he has held since 2011. Ashley also chairs the Board of the International Organization of Securities Commissions (IOSCO) and sits on the Financial Stability Board's Plenary and its Steering Committee.
The FCA continues to make changes at the top. The new Chair looks to have extensive industry experience.
2022/07/04 13:08 - Financial Conduct Authority
On 1 July 2022 Alexander David Securities Limited (ADSL) entered creditors' voluntary liquidation and Shane Cooks, Emma Sayers and Malcolm Cohen of BDO LLP were appointed as joint liquidators.

ADSL is an FCA regulated firm which was authorised to conduct investment related activities. ADSL provided corporate finance advisory services which included initial public offerings, secondary fund raisings, mergers and acquisitions, and debt offerings. It also undertook some other unregulated activities.

If you believe you have a claim against the firm and do not hear from the joint liquidators by 8 July 2022 then please contact them using the following contact details:

Catherine Werner
Firm Name: BDO LLP
Address: 55 Baker Street London W1U 7EU
Website: www.bdo.co.uk
Email: [email protected]
Telephone: +44(0) 207 034 5884
ADSL was subject to a Supervisory Notice relating to claims against the firm. It has since entered voluntary liquidation.
Mr Mohammed Kabir has agreed to orders to resolve proceedings brought by the Financial Conduct Authority (FCA) relating to an unauthorised deposit taking scheme operated by Bright Managment Solution Limited [sic] (Bright Management) which has avoided a trial that was due to start in June 2022.

The FCA began court proceedings in December 2019 against Bright Management and six defendants for taking money from the public for different projects, including forex and crypto-asset trading, without the required FCA authorisation. The FCA also alleged misleading statements and marketing about the nature of the investments Bright Management was offering.

The FCA sought orders to stop the activities continuing, to freeze up to £1.3 million in assets, declarations of breaches and the return of money to victims.
Although spot-forex and crypto-assets are not Specified Investments under the Regulated Activities Order these individuals still breached FCA rules on deposit taking and financial promotions without authorisation.
2022/06/23 07:00 - Financial Conduct Authority
The Financial Conduct Authority (FCA) is using data to tackle online fraud faster by scanning approximately 100,000 websites created every day to identify those that appear to be scams.

Where the FCA identifies fraudulent websites, it is proactive in requesting the website host shut them down, though it does not have the powers to force them to. Between May 2021 and April 2022, the FCA added 1,966 possible scams to its consumer warning list – over a third more than during the same period the previous year.
100,000 sites per day is approximately the number of new internet domains registered every day. The FCA has no enforcement powers over website content, especially that hosted outside of the UK, but being aware of potential new scam sites will be a useful tool for them.
2022/06/22 12:00 - Financial Conduct Authority
The Financial Conduct Authority will pursue a re-trial of Stuart Bayes and Jonathan Swann for insider dealing offences.

This follows the Court's decision on 25 May 2022 to discharge the jury after they were unable to reach a verdict following an eight-week trial at Southwark Crown Court.

The court set the date of 11 September 2023.
The only criminal trial for insider dealing in 2022 could not reach a verdict. The FCA has sought a retrial which is set for 2023. The FCA receives around 90 Suspicious Transaction Reports (STORs) each week.