FCA Updates - November 2021

FCA Recognizes Revised FX Global Code and the Global Precious Metals Code

Mark Ford and Darragh Finn

The FCA announced the recognition of the updated FX Global Code (“FX Code” - maintained by the Global Foreign Exchange Committee) and Global Precious Metals Code (“PM Code” - maintained by the London Bullion Market Association). Both voluntary codes reflect the industry’s view of best practice.

This recognition means that an individual subject to the Senior Managers & Certification Regime, who acts in line with these codes, would tend to be considered to have met their obligation to observe “proper standards of market conduct” in relation to unregulated business.

Signatories to the FX Code or PM Code are required to make clear and transparent disclosures explaining how market users’ orders will be handled.

Details of the FCA’s Code Recognition Scheme can be found here.

Read the full FCA statement here.

FCA Enters Examination Stage in the Registration of First UK Securitization Repositories

Tom Bevan and Alex Lander

The obligation to report public securitizations within the scope of the UK Securitization Regulation to a Securitization Repository (SR) that is registered and supervised by the FCA, will apply as soon as one SR is registered. The FCA will inform market participants when the registration of the first SR(s) is completed. The FCA has 40 working days in which to examine the application for registration and, if approved, the entity will be registered as an SR.

The regulator has encouraged reporting entities to make the necessary preparations to comply with their reporting obligations to an SR.

PS21/17: A New UK Prudential Regime for MiFID Investment Firms

Laura Febbrari and Warren Radloff

The FCA published its third policy statement that covers miscellaneous topics necessary to complete the rules to introduce the UK Investment Firm Prudential Regime. Some specific matters discussed in the policy statement that may be of interest are:

• Chapter 2 summarizes the feedback received on the FCA’s proposals for disclosure, including both how and what firms should disclose
• Chapter 3 summarizes the feedback on the treatment of drawings by partners or members that exceed profits
• Chapter 8 summarizes the feedback on the enforcement of the Investment Firms Prudential Regime (IFPR)
• Chapter 9 summarizes the feedback on the investment firm group notification form

This policy statement also included the final rules that relate to CP21/26.

The regime took effect on 1 January 2022.

Read the full article here.

Read the policy statement here. 

FCA Sets Out Fees Proposals for 2022/23

Amelie Snape and Peter Ray

Under the FCA’s consultation on fees proposals for 2022/23, the minimum fee would increase from £1,151 to £2,200 (an increase of over 90%), to reflect the increasing costs of supervision and the FCA’s authorization process. The FCA stated in the press release detailing the consultation that it is committed to invest £120 million (mn) over the course of the next three years, with a view to enhancing its ability to identify firms and individuals that pose regulatory concern.
 
The FCA is welcoming feedback on its proposals and plans to implement final changes ahead of the 2022/2023 fee cycle. The full consultation can be found here.