Issue 60 - September 2019

Welcome to the latest edition of Gem Compliance’s monthly regulation newsletter. The aim of the newsletter is to present industry news in an easily digestible format. As such, not all sources of industry information and FCA publications (and no PRA publications unless specified) will be covered. Therefore, clients and associates of Gem Compliance should periodically check the FCA’s and PRA’s websites for regulatory developments. We hope you find this newsletter useful and should you have any compliance queries or require advice on any of these topics, please do not hesitate to contact us.

  1. FCA Speech: Preparing for Brexit in financial services: the state of play
  2. Banking Standards Board's Statement of Good Practice in relation to regulatory references under the Certification Regime 
  3. Implementing MiFID II  - multi-firm review of research unbundling reforms

Other Newsletters & Updates 

It’s been an eventful month in politics with the proroguing of Parliament and a number of rulings, including by the Supreme Court, on whether or not the proroguing was lawful; the Bill to prevent a no deal Brexit receiving Royal Assent; resignations; calls for and against a general election; and publication of the Yellow hammer document bullet pointing the worst case scenario for the UK in the event of a no-deal Brexit, to name a few. However, we do not seem to be any further forward in a Withdrawal Agreement and 31st October is just around the corner.
The FCA has stepped up its efforts to encourage firms to prepare for no-deal Brexit. On 11th September it published a press release where it announced the running of a series of digital adverts directing viewers to the FCA’s Brexit webpages. The FCA has also set up a dedicated telephone line (0800 048 4255). On 12th September the FCA issued a Brexit edition of its Regulation Round-up. Amongst other things, it highlights an update to its webpage on PS19/5: Brexit Policy Statement and Transitional Directions paper, which references CP19/27: Quarterly Consultation Paper No 25. This CP proposes miscellaneous and minor amendments to the Handbook in relation to Brexit.  
In any case and as before, firms should continue to prepare (and evidence this preparation) for a range of scenarios, including potentially an increasing risk in a hard Brexit. 
The latest edition of the FCA Regulation Round-up was issued on 19 September and includes, amongst other things, a reminder of the notification requirement under SUP 15.3.15(3) for firms to notify the FCA when a competition authority has started an investigation or imposed disciplinary measures or sanctions against them. Firms are encouraged to subscribe to the Round-up directly.
The latest edition of the FCA Policy Development Update was issued on 6th September.
The ICO has issued its September newsletter in which it highlights its checklists, FAQs and guidance in its Brexit Hub. The ICO confirms it will be adding to this, specifically for smaller businesses, over the coming weeks.
The latest FOS newsletter (issue 149) was published on 21st September.


1. FCA Speech: "Preparing for Brexit in financial services: the state of play" by FCA CEO Andrew Bailey

Mr Bailey noted that preparations are aimed at a worst-case scenario, a no-deal Brexit. The FCA and the Bank of England (‘BoE’) are aiming to mitigate risks as much as possible and while progress has been made, there is no room for complacency.
Legislation and the Temporary Transitional Power

The FCA has been working with the Treasury and the BoE on legislation, Handbook amendments, Binding Technical Standards and ​The Temporary Transitional Power (TTP), which gives the FCA the ability to delay or phase changes to regulatory requirements made under the EU (Withdrawal) Act 2018, where appropriate.

Memoranda of Understanding

Agreements have been concluded with EU markets, insurance and banking authorities which will: provide a framework for the sharing of confidential information; allow UK or EU-based firms to delegate or outsource certain activities to firms based in the other jurisdiction; and support future market access and equivalence decisions.

FCA activities

The FCA is working on taking over a number of functions for the UK currently being conducted by ESMA including the regulation of Credit Rating Agencies and Trade Repositories.  The FCA will also be taking on from ESMA responsibilities in respect of MiFID II.
Issues that remain
There are however 7 issues remaining that need UK or EU resolution:
  1. The Share Trading Obligation (‘STO’): Currently, EU MiFID firms are required to trade certain shares only on EU venues, systematic internalises or equivalent third country trading venues. Under the EU Withdrawal Act, the UK has on-shored STO, which leaves EU shares traded in the UK in the middle of an EU/UK overlap.
  2. The Derivatives Trading Obligation (‘DTO’): The DTO requires EU firms to trade some classes of OTC derivatives on EU or equivalent third country Trading Venues. If the UK and EU do not find each other’s regulatory regimes equivalent, EU firms will not be able to meet the EU’s DTO by using UK trading venues to trade in-scope derivatives, and vice versa.
  3. Clearing: The UK government has legislated to allow UK businesses to use EU-based clearing houses for 3 years from the date of Brexit and there will be temporary recognition for UK central counterparty clearing houses until March 2020.
  4. Uncleared derivatives: The UK, through the Temporary Permissions Regime and Financial Services Contracts Regime, has taken measures to allow firms to service existing uncleared derivatives between UK and EU counterparties. The EU has not reciprocated.  
  5. Data exchange: The UK has legislated to allow the free flow of personal data from the UK to the EU in a no-deal scenario, but this has not yet been reciprocated by the EU. [see ICO’s website for more information]
  6. Progress on contract repapering: This is progressing slowly, and some EU member states have allowed UK firms to continue temporarily (subject to certain notifications, which may vary between member states) to provide certain services in their jurisdiction.
  7. Retail financial services: Although the majority of UK firms have confirmed that they will continue to provide services to EU residents, a lack of legal certainty in some jurisdictions will create adverse outcomes for consumers.

In conclusion, Mr Bailey stresses that although progress has been made, there is still a lot of work on the horizon for the FCA as well as individual firms.

2. Banking Standards Board’s Statement of Good Practice in relation to regulatory references under the Certification Regime.

The Statement from the Banking Standards Board (‘BSB’) includes a set of high-level principles and good practice guidance designed to help firms implement the regulatory reference requirement of the Senior Managers and Certification Regime (‘SM&CR’). The Statement was developed by BSB members, through the BSB’s cross-industry Certification Regime Working Group, and is classed as a living document that will be kept under review.
The Statement is not legally binding nor does it replace regulation; users should read the guidance in conjunction with relevant FCA and PRA rules and guidance, and in the event of inconsistencies, relevant laws and regulations prevail. 
The aim of the regulatory reference requirements under the SM&CR is to “prevent the ‘recycling’ of individuals with poor conduct records between firms” by establishing a framework that allows/requires the sharing of relevant (and updated, where necessary) information on risk-taking individuals to support firms’ assessment of new recruits. 
There are three main rules for firms in relation to regulatory references:
  1. Seek regulatory references when considering the appointment of individuals to certain roles,
  2. Provide regulatory references when requested; and
  3. Revise and, if necessary, update references if information comes to light that would affect a firm’s assessment of an individual.
The BSB notes that in implementing the regulatory reference requirements, firms will need to balance a range of legal and regulatory obligations, such as employment law and data protection. Extensive discussions on these considerations have led to the creation of 3 high-level principles to help firms with this balancing act. The principles are that references should be:
  1. Fair, both to the individuals about whom they are written without compromising the integrity of a reference, and in the way that they are used by firms when recruiting individuals.
  2. Proportionate in relation to individuals and other firms when fulfilling regulatory reference requirements, in particular by taking reasonable steps to identify and verify relevant information, and when considering issues raised by regulatory references and updates.
  3. Consistent: in the way that individuals are treated by firms; with other processes and policies within a firm; and as far as possible between firms in the quality and quantity of information included.
Under each of the high-level principles above, the Statement includes more detailed best practice guidance, such as:
  1. Fairness:
    1. Consider whether an individual should be given a second opportunity to comment on past disciplinary or other proceedings when they did not originally make a comment.
    2. Exclude information about uninvestigated allegations of poor conduct that are considered vexatious or frivolous.
  2. Proportionality:
    1. A firm should satisfy itself that a request for a reference is legitimate (i.e. it is being made by a regulated firm for its stated purpose).
    2. Ensure key teams and others involved in the fitness and propriety assessment process are (as far as possible) aware of the need to escalate an allegation of poor conduct against a former employee for the purposes of considering a revision of the original regulatory reference.
  3. Consistency:
    1. Ensure that the content of the reference is consistent with information previously communicated to the individual, for example, at the time of a disciplinary process.
    2. Ensure that the threshold for disclosing certification risks and issues remains the same for revised references as for requested references.
Other key takeaways from the Statement include:
  • Ensuring line managers, who could be approached for references, understand what a regulatory reference is and how the firm deals with them.
  • The rules do not prevent firms asking for more information than the standard FCA template requests. Some firms have therefore amended the template to gather additional information. Firms might wish to consider providing a short explanation of why certain additional information that has been requested has not been provided.
  • Regulatory references contain sensitive personal data, so firms should be mindful of their data protection obligations and may therefore wish to encrypt/password protect references.
  • Guidance on how to avoiding potential issues relating to timeliness in obtaining a reference within the FCA’s recommended six-week period, such as when a previous employer has ceased trading.
  • Guidance on responding to references in less straightforward situations, e.g. when disciplinary procedures are incomplete.
  • Suggestions on increasing staff awareness of firms’ regulatory reference processes, so there are no surprises – e.g. section in the Staff Handbook.
The BSB believes that by not following these principles, including when evaluating outcomes, there is a risk that individuals will be treated unfairly and unreasonably, which, according to the BSB, could result in the following:
  • at an individual level, incentivise risk aversion, disincentivise owning up to mistakes, or increase levels of stress and anxiety.
  • At a firm level, an adverse impact on openness, accountability and resilience, and could increase the risk of legal action.

3. Implementing MiFID II – detailed findings of multi-firm review of research unbundling reform

MiFID II introduced unbundling rules requiring asset managers to explicitly pay for third-party research, and brokers to price and provide research separately. These rules are set out in COBS sections 2.3A, 2.3B and 2.3C of the FCA’s Handbook.
The aim of the rules was to improve price transparency and accountability of costs passed on to clients. The unbundling of research-buying decisions from trade-execution decisions was also expected to reduce conflicts of interests. 
Between July 2018 and March 2019, using a sample of: traditional asset managers; alternative fund managers; wealth managers; and independent Authorised Corporate Director (‘ACD’) providers, the FCA conducted a survey of 40 buy-side firms and carried out 10 firm visits across both the buy and sell-side markets. The FCA also met 5 independent research providers (‘IRPs’) and engaged with corporate issuers through trade associations.
Overall, the FCA reports that its rules appear to be steering the market towards the intended outcomes mentioned above. However, the FCA’s key findings, as set out below, lead the FCA to conclude that the valuation and pricing of research by firms is still evolving and further changes may result, which is why the FCA is committing to conducting further work in 2020/21.
Key Findings:
  • Most firms have chosen to absorb research costs themselves. This resulted in around £70m of savings for investors in UK-managed equity portfolios across the sample in the first half of 2018 compared with 2017. Over five years these savings could total over £1bn.
  • Whilst a reduction of 20-30% in firms’ research budgets was found, there was no evidence of a material reduction in research coverage, including for listed small and medium enterprises (SMEs). Possible reasons for these findings are that firms are approaching research in more targeted/efficient ways, including by having formal research processes in place, and competition is driving costs down.
  • Fewer brokers are being used for both research and execution, and an increase was noted in the number of counterparties used by firms for execution-only services.
  • Firms are operating a variety of research valuation models with differing levels of sophistication but with a clear gap between best practice and weaker models. The FCA expects further refinement to ensure firms are acting in the best interests of clients. Specifically, firms’ approaches should allow them to:
    • demonstrate that any conflicts of interests do not encourage them to avoid paying, or pay too little, for research services,
    • justify higher research payments to some providers over others, based on the level and quality of service received, and
    • get research of sufficient quality to support their investment decisions.
  • A wide range of sell-side research pricing levels were identified. Firms’ models varied with some using tiered service pricing levels, others offering ‘pay as you go’, while others priced per type of interaction or product consumed. The FCA expects firms to price services separately.
  • The FCA’s engagement with IRPs indicated that:
    • Levels of pricing in the market were potentially too low because large multi-service banks are internally cross-subsidising their research, making it hard for them to compete.
    • Over-cautious approaches to the inducement rules by the buy-side and limited take up of trial periods have reduced their ability to access prospective clients.
The FCA states that, in general, lower pricing can be positive but there are potential negative effects on competition in the medium term if some firms’ ‘loss leading’ prices drive out competitors, reducing choice. The FCA will therefore continue to monitor this area of the market for competition concerns.
  • Uncertainly on how the new rules apply to firms was identified. Therefore, in its detailed feedback the FCA has clarified its expectations in these areas.
The FCA concludes by saying that MiFID II unbundling rules, although still relatively new, appear to be contributing to broadly positive changes in behaviours by firms.

Other Publications 

Discussion Papers


Consultation Papers

CP19/27: Quarterly Consultation Paper No 25 proposing miscellaneous and minor amendments to the Handbook in relation to Brexit.

Occasional Papers


Dear CEO letter to payment service firms confirming a delay to the Stronger Customer Authentication requirements, which are meant to come into force on 14th September. However, the European Banking Authority has permitted regulatory authorities to give firms more time to implement the requirements. The FCA letter confirms it will not enforce the requirements for card not-present e-commerce transactions until 14th March 2021.
FCA video, which aims to help consumers better understand the financial advice they received in relation to transferring out of a defined benefit pension.
FCA letter to the Remuneration Committee Chairs of level 1 firms (the largest and most significant dual-regulated firms) setting out its findings and observations from the 2018/19 remuneration round, explaining how it plans to assess firms throughout 2019/20.
FCA publishes new webpage regarding its public directory (established under the SM&CR) for checking the details of key people working in financial services. It has also published a user guide to help firms to submit data to the directory. The FCA reminds firms of the following deadlines:
  • Banks, building societies, credit unions and insurance companies must submit their data between 9 September 2019 and 9 March 2020.
  • All other firms must submit their data between 9 December 2019 and 9 December 2020.
FCA issues statement delaying publication of its Call for Input on accessing and using data in wholesale markets because of resources needed for Brexit-related work.
FCA updates its checklists webpages on SM&CR for solo-regulated firms and its webpage on converting from the current approved person regime to the SM&CR.
Registration open for FCA’s ‘Transforming culture through employee motivation and recognition’ webinar.
FCA issues update to June 2019 joint statement with the US Securities and Exchange Commission on opportunistic strategies in the credit derivatives market.
FCA Press Releases 

FCA warns claims management companies about their advertising standards after a review by the regulator revealed wide-spread poor practice.
FCA announces the appointment of Marlene Shiels, Chief Executive of Capital Credit Union, as Chair of the FCA’s Smaller Business Practitioner Panel from 1 October 2019. 
FCA appoints new Chief Economist, Kate Collyer, who is currently Chief Economist for Energy and Market Frameworks and Joint-Director of Analysis at Department for Business, Energy and Industrial Strategy (BEIS).
FCA to contact authorised firms asking them to register for Connect, where firms have not done so already, as from January 2020 firms will need to use Connect to comply with the annual mandatory update requirement, which obliges firms to review and confirm the accuracy if their firm details annually, as set out in SUP 16.10, in line with their Accounting Reference Date.
FCA appoints Sheree Howard as Executive Director of Risk and Compliance Oversight.


The fight against skimmers and scammers” by Charles Randell, Chair of the FCA
Speech by the EBA Chairperson Jose Manuel Campa on the EBA's anti-money laundering (AML) and counter-terrorist financing (CTF) powers
Regulating financial innovation – going behind the scenes” by Christopher Woolard, Executive Director of Strategy and Competition at the FCA
Improving the suitability of financial advice” by Debbie Gupta, Director of Life Insurance and Financial Advice Supervision at the FCA

Enforcement Actions and Prosecution 

TPR has fined an employer £350K for failing to re-enrol more than 40 staff in the company’s pension scheme after they had left the scheme 3 years previously, and for failing to pay the correct contributions for more than 2,000 staff, despite warnings from the regulator. The company has now re-enrolled the staff and paid over £100,000 of backdated pension contributions in addition to the £350K fine.
Deutsche Bank agrees $16m settlement with the Securities and Exchange Commission (‘SEC’) in the US for violations of the Foreign Corrupt Practices Act. The SEC alleges that the bank hired unqualified relatives of Russian and Chinese government officials in order to win business. The SEC found that Deutsche Bank employees had created false records that concealed the corrupt hiring practices and had failed to accurately document and record certain related expenses.
The Insolvency Service has confirmed that four companies, which claimed to trade as IT consultants/software developers, have been wound up by the High Court of Justice after an investigation revealed almost £600K had fraudulently been secured from 8 overseas investors by selling shares in pharmaceutical companies. However, the shares never materialised and investors never got their money back despite making the requested additional payments. The investigation also revealed that warnings had been issued by a number of regulatory authorities including the FCA.
FCA announces the sentencing of Richard Baldwin (in his absence) to 5 years and 8 months in prison for money laundering, insider dealing and contempt of court offences. Mr Baldwin’s criminality was discovered as part of Operation Tabernula, one of the FCA’s largest and most complex insider dealing investigations.
ICO issues enforcement notice to financial services firm, Hudson Bay Finance Ltd, for failing to respond to a subject access request and for failing to co-operate with the ICO. Failure to comply with the ICO’s enforcement notice is a criminal offence.
Ofgem fines Engie Global Markets £2.128m (with early penalty discount) for breach of market manipulation prohibition under the Regulation on Energy Market Integrity and Transparency (‘REMIT’). Ofgem found that between June and August 2016 transactions or orders issued by Engie gave, or were likely to give, false or misleading signals as to the supply of, or demand for, or price of wholesale energy products or that secured or were likely to secure the price of wholesale energy products at an artificial level.
Competition and Markets Authority (‘CMA’) issues directions to RBS and Santander for breaches of the PPI Market Investigation Order. Both banks have previously been warned by the CMA privately about their failings and Santander has also been publicly warned.
FCA brings first prosecution against an individual for destruction of documents relevant to an investigation. The defendant, Mr Vishnyak, was under investigation by the FCA for suspected insider dealing offences. The FCA alleges Mr Vishnyak deleted the WhatsApp application from his mobile phone after he was required to provide it as part of the investigation. Mr Vishnyak has pleaded not guilty and has been granted bail until a hearing on 4th October.
The Pensions Regulator (‘TPR’) has banned three professional trustees for lacking sufficient knowledge and understanding about whether an attempted employer-related investment was legal and for failing to obtain the necessary advice. The three individuals have agreed never again to act as trustees of occupational pension schemes.
FTAdviser reports that the FCA has imposed a restriction on claims management company, Money Redress Ltd, from dealing with the clients of advice company, Pension Calculator Limited (‘PCL’), over conflict of interest concerns. Money Redress had worked with Pension Calculator clients who are understood to have lost money on high-risk assets. Companies House data shows the two companies share a director. Money Redress has been instructed to write to existing clients to inform them of the restriction and to refund any fees paid. The letter apparently states: “There is a connection between us and PCL, because the managing director of Money Redress Limited, Mr Rob Ridge, was and is a director of PCL. This connection creates a conflict of interest, and for that reason we can no longer progress your claim for compensation on your behalf.”

Industry News:


European Payments Council issues press release on the operational implications of non-deal Brexit on Single Euro Payments Area (SEPA) credit transfer (SCT) and SEPA direct debit (SDD) transactions.
BoE provides Treasury Select Committee with updated Brexit analysis in response to a request from the Committee for confirmation on whether the economic analysis produced in November 2018 remained “fully relevant”. The letter states: “In summary, advancements in preparations for a No Deal No Transition scenario mean that the Bank's assessment of a worst case No Deal No Transition scenarios has become less severe. However, the Bank's assessment of scenarios where there is a withdrawal agreement followed by a Transition to a WTO trading relationship or by a transition to a new Economic Partnership remain unchanged.”  
The FCA and the Securities and Futures Commission of Hong Kong have issued an addendum to the Memorandum of Understanding between the two organisations “to ensure that the UK-Hong Kong mutual recognition of funds arrangement will continue to operate in a smooth manner after the withdrawal of the UK from the EU”.
Transcript for interview with Andrea Enria, Chair of the Supervisory Board of the ECB, on 15th August published, and sees Ms Enria commenting on the effect of Brexit on financial stability, amongst other things.

FCA & Regulation

FCA sets up implementation group of trade associations, lenders and third-party administrators in relation to consultation paper CP19/14, in which the FCA proposes rule changes to decrease regulatory barriers for mortgage ‘prisoners’.
Latest research from a Pimfa CEO Sentiment Survey reveals that ‘regulations and their implementation and compliance’ have come out as the top issue for CEOs for a second year running. Gary Sunderland, head of research and indices at Pimfa, said: “As regulation changes with Mifid & SM&CR, compliance is no longer just the responsibility of those who work in the compliance department, everyone within the firm now has a role to play in ensuring that the firm remains compliant with the current regulations.”
ESMA publishes final report with an overview on feedback to the proposed guidelines for fund managers, depositaries and national competent authorities (NCAs) on liquidity stress testing (‘LST’) in UCITS and AIFs. The guidelines require managers to build LST models and have a strong understanding of liquidity risks and a fund's overall liquidity profile. LST should be properly integrated and embedded into a fund's risk management framework and subject to appropriate governance and oversight. Specifically, the guidelines set out what needs to be documented in an LST policy and how frequently testing should occur. When developing new funds, managers applying for authorisation will have to demonstrate that a fund will remain sufficiently liquid during normal and stressed circumstances.
The FCA has published a new webpage on how the Market Abuse Regulation (‘MAR’) might apply to information obtained via the electoral role. The webpage sets out the FCA’s expectations of firms and individuals regarding their use of polling information that has the potential to be inside information and confirms that whether such information constitutes inside information must be judged on a case-by-case basis. The webpage also reiterates that all firms and individuals, regardless of whether or not they carry out regulated activities, fall within the FCA’s market abuse remit.
FCA updates its webpage with changes to AIFM’s submission of notification and material change under the National Private Placement Regime (‘NPPR’) by AIFMs.
ESMA publishes Economic Report on stress simulation for investment funds.
UK Finance publishes report on the evolution and reform of the SM&CR in the banking sector.
International Organization of Securities Commissions (IOSCO) publishes consultation paper (CR04/19) on a recommendation for trading venues and their participants to synchronise the clocks they use for timestamping a reportable event with co-ordinated universal time (UTC), the primary time standard by which the world regulates clocks and time. 
Trade body, Pimfa, claims FCA’s consultation paper, CP19/20, on assessing adequate financial resources is “confusing.”
PRA publishes on its webpage, Director Letters sent to category 5 credit unions setting out the PRA’s findings of its 2019 assessment.
Speaking at a conference in Harrogate, it is reported that Debbie Gupta, director of life insurance and financial advice supervision at the FCA, highlighted the benefits of recording conversations with clients. Ms Gupta said: “Recordings provide the most robust evidence available for a firm to make its case in the event of a complaint." Ms Gupta also went on to say: “Even if you aren’t recording the meeting, your client’s voice should still come through the fact-find loud and clear. Consider using the client’s own language and phrase."

Financial Crime

At the end of August OFSI updated its links to the consolidated sanctions list. It is important that references to the old links are updated to the new links.
Reminder from OFSI that firms that hold or control funds or economic resources belonging to, owned, held, or controlled by a designated person are required to submit a report to OFSI by Friday 11 October 2019.
Quarterly reports for Q1 and Q2 ’19 on OFSI’s operation of the UK’s asset freezing regime have now been published. 
PRA sends Dear CEO letter to dual-regulated firms subject to the Capital Requirements  Regulation on money laundering and terrorist financing risks in prudential supervision.
ICAEW has published an article warning about firms about potential money laundering implications of investments in cannabis, Cannabidiol (or ‘CBD’) and other cannabinoids.
MEPs call for “coordinated and speedy implementation” of the 5th Money Laundering Directive.
Transparency International has published its 2019 Global Corruption Barometer for Latin America and the Caribbean, a survey that asked more than 17,000 citizens from 18 countries about their experiences of bribery and perceptions of corruption. The survey findings include: one in five people who accessed public services, such as water and electricity, paid a bribe last year; and one in four people were offered bribes in exchange for votes.

Data Protection and Security

It has been revealed that malicious websites, when loaded, took advantage of an iPhone vulnerability enabling attackers to plant software, which sent users’ personal data (including contacts, images, GPS location information) to the attackers’ servers every 60 seconds. The vulnerabilities were patched in February 2019. Project Zero, which uncovered the iPhone issue, has said that Android and Windows devices may also have been targeted.  
Government issues Call for Views on the UK’s proposed approach to cyber security certification following the UK’s withdrawal from the EU.

Pensions & SIPPs

Freedom of information request reveals an increase in information requests to trustees and advisers from The Pensions Regulator (TPR) about pension scheme administration and legislative compliance, indicating a possible hardening of TPR’s supervisory approach. 
The second largest master trust has received authorisation from the TPR bringing the total number authorised under the new regime (effective from 01/10/18) to 18.
Overlap of Ombudsmen’s remits identified, which cloud lead to consumer confusion and duplication of efforts.
DWP tailored review report confirms no case for merger of The Pensions Ombudsman and the Financial Ombudsman Service.
Government announces plans for state pensions for UK expats in the EU in the event of a no-deal Brexit.
The Pensions Ombudsman tells appointed representative (‘AR’) to pay redress owed to a customer in relation to pension transfer delays, because the principal firm went into administration.



FOS tell Lloyds Bank to compensate insistent client in relation to the sale, in 1990, of a level term assurance policy to cover a mortgage because the adviser’s report did not provide a reason for the complainant’s choice to take a level term policy over a decreasing term policy.

HMRC & Tax 

HMRC recoups an additional £3bn in taxes in the 2018/19 tax year compared to the previous tax year following its crackdown on aggressive avoidance schemes.
It is reported that a tax expert is warning advisers and their clients to prepare for letters from HMRC regarding their clients’ residential property holdings. The letters are targeting registered overseas companies that own UK property. Letters are also being sent to the tenants of these properties.

Law Commission publishes call for evidence as the first step in its intermediated securities scoping study, which is looking at the law and issues relating to the current system of intermediation for shares and bonds. The study has been requested by the Department for Business, Energy & Industrial Strategy. The purpose of the study is to inform public debate, develop a broad understanding of potential options for reform, and develop a consensus about issues to be addressed in the future. 
UEFA, Europe’s football governing body, and Santander have teamed up to launch UEFA Financial Management Training, an e-learning platform that will enable footballers across Europe to “acquire the knowledge to manage their finances, take informed decisions and plan for the future. The programme covers the basic principles of finance, such as cash management, credit, savings and investments, and provides a comprehensive introduction to entrepreneurship.”
European Commission (EC) publishes answer to question relating to Facebook’s proposed new digital currency, Libra, confirming the EC’s work on cryptoassets includes digital currencies. Regarding Libra specifically, the EC confirmed it is “monitoring the developments of this project from an EU regulatory perspective and assessing its risks, in particular with regard to financial stability, monetary policy, data privacy, money laundering, consumer protection, competition and cyber security.”  
Letter from Economic Secretary to the Treasury, John Glen, to House of Lords EU Committee Chair, Lord Boswell of Ayntho, providing an update on the EC’s proposed Regulation on European Crowdfunding Service Providers (ECSP) for business and on related proposals for amending MiFID II.
Treasury Select Committee appoints John Mann MP as interim Chairman to replace Nicky Morgan MP who was appointed secretary of state for Digital, Culture, Media and Sport in July.
Consulting firm issues warning to firms that failure to comply with health and safety requirements could attract a penalty of almost £150K. Firms with five or more employees are required to have a written health and safety policy in place and be able to demonstrate that it has been communicated, understood, and implemented by all employees. Health and safety law in England, Wales and Scotland is based on the Health and Safety at Work etc. Act 1974 (HSWA 1974). This Act also created the Health and Safety Executive ('HSE') to: secure the health, safety and welfare of persons at work; and protect persons not at work against risks to health and safety arising from work activities. In addition, the HSE provides guidance to firms on how to comply with requirements.


This newsletter contains generic information and has been generated for professional clients and associates of Gem Compliance Consulting Limited only and should not be regarded as advice. We will not be liable for loss, however caused by parties acting on the information contained herein.

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