The UK published its Brexit position paper on the Customs Union, which drew a dismissive response, particularly in relation to proposals for the management of its border with Ireland. The United States, Mexico and Canada formally entered talks on the renegotiation of the North American Free Trade Agreement, whilst the US formally launched an investigation into Chinese policies on international intellectual property. President Trump abandoned a number of business counsels following a series of resignations of business leaders prompted by the President's comments on the events in Charlottesville. The chief proponent of economic nationalism in America, Steve Bannon, was dismissed by President Trump. Here are the main stories in finance and regulation for the last two weeks.
The entry into force of the Central Bank and Financial Services Authority of Ireland (Amendment Act) 2017 will extend the time limit for complaints to be made to the Financial Services Ombudsman. The current time limit is 6 years but if the service complained of relates to a long term financial service, the time limit can be extended. A long term financial service includes products with a life of 5 years and 1 month or more and life assurance policies.
The Pensions Authority issued guidance on the appointment and substitution of pensions trustees under section 64 of the Pensions Act 1990. The section allows the Authority to appoint trustees to funds where there are no trustees or they cannot be found. The Authority also published statistics on defined benefit schemes which report 628 funds are subject to the funding standard, with combined assets of €60.8bn. 74% of those schemes were meeting the funding standard, an increase of 4% on the previous year.
The Central Bank held a round table with credit union external auditors. The Central Bank outlined its concerns about credit union weaknesses and emphasised the obligations of all stakeholders, including external auditors. The regulator stressed the obligation of auditors to report matters of material significance to it in accordance with their statutory obligations. A further discussion on the difficulties of auditors in their role also took place.
The Department for Finance announced reforms of Ireland's limited partnership legislation. The Investment Limited Partnership (Amendment) Bill will amend the 1994 Investment Limited Partnership Act and the Limited Partnership Act 1907. In further fund news, the Central Bank updated its guidance on UCITS Financial Derivative Instruments and Efficient Portfolio Management.
Investors in Banco Popular launched legal action in the European Court of Justice against European authorities who oversaw the sale of the failed lender to Santander for €1. The litigation aims to annul the decisions made under the single resolution regime and challenges the basis on which the Single Resolution Board took its decisions.
The European Securities and Markets Authority published its first three opinions on position limits for commodity derivatives under MIFID II/MIFIR, covering corn, rapeseed and milling wheat. The Authority also updated its MIFID II guidelines on transaction reporting, order record keeping and clock synchronisation.
The European Banking Authority published a Discussion Paper on its approach to FinTech. The paper reports on the first FinTech mapping exercise detailing responses from 22 Member States, 2 EEA states and 282 FinTech firms. The paper sets out the EBA's proposed scope of work and asks for responses by 6th November 2017.
The European Banking Authority launched a public consultation on its draft guidelines on reporting requirements on statistical data on fraud under the revised Payment Services Directive. The EBA is seeking to ensure that the fraud reporting required under Article 96 of PSD2 is implemented consistently across member states. Responses are requested by 3rd November 2017.
The House of Lords European Union Committee recommended an adequacy decision as the most comprehensive mechanism for the UK to share data with the EU post-Brexit. The report noted that three quarters of the country's cross border data flows are with the EU. Post-Brexit, the UK is expected to be treated as a third country by the EU, which would result in higher standards being imposed and a loss of the national security exemption.
The Upper Tribunal upheld the Financial Conduct Authority's decision to ban Charles Palmer, former Chief Executive of Financial Limited and Investments Limited, from the financial services industry and fine him £86,000. Mr. Palmer was found by the regulator to have failed to act with due skill, care and diligence as a director and CEO, and his behaviour was further compounded by his failure to respond to findings made by the Financial Services Authority in 2010. The firms operated an advisory network with 397 representatives at their peak.
Auditor PWC was fined a record £5.1m by the Financial Reporting Council in relation to its audit of RSM Tenson, a professional services group which went into administration in 2013. PWC was also issued with a severe reprimand and the engagement partner was also fined £114,750. The FRC pointed to failures to obtain external evidence to support their conclusions in relation to the treatment of bonus payments, leases and goodwill.
The Federal Deposit Insurance Corporation took ‘the unusual step' of launching proceedings on the LIBOR rigging scandal in the London courts against European banks Barclays, Lloyds, Deutsche, RBS, UBS and Rabobank, as well as the British Bankers Association. The FDIC is suing on behalf of 39 failed US banks which relied on the LIBOR rate and claimed that between 2007 and 2009, the banks had conspired to set LIBOR at an artificial level. Similar claims were rejected in the New York courts last year on jurisdictional grounds.