The FCA and PRA have been reviewing firms’ algorithmic trading activity and have issued supervisory publications. For firms solo-regulated by the FCA, please refer to the FCA publication. Firms regulated by the PRA and FCA should refer to both publications. Firms operating in wholesale markets increasingly use algorithms for a number of purposes across their trading activity. In particular, driven by the rise in electronic trading platforms and the increased availability of data, algorithms are now often used for making both execution and investment decisions. It is essential that key oversight functions, including compliance and risk management, keep pace with technological advancements.
The Financial Conduct Authority (“FCA”) have stated that compliance with the EU General Data Protection Regulation (“GDPR”) is now a board level responsibility, and that firms must be able to produce evidence to demonstrate the steps that they have taken to comply.
Under SM&CR proposals, only Senior Managers will appear on the FS Register; CF10As for Core and Limited Scope firms, CF28s, CF29s, and CF30s would not appear. FCA will consult on maintaining a central public record of these important individuals in FCA-regulated firms.
The FCA is consulting in CP18/4 on the EU Money Market Funds (“MMF”) Regulation, which came into force on 21 July 2017 and applies to new MMFs from 21 July 2018 and to existing MMFs from 21 January 2019. The FCA and the Treasury have identified areas of the UK regulatory framework that require changes.
The UK will become a 'third country' on 30 March 2019, unless a ratified withdrawal agreement establishes another date. The EC have issued two Notices to Stakeholders reminding managers of investment funds and investors of the legal repercussions which need to be considered.
The FSMA By Way of Business Order (SI 2001/1177) is to be amended, affecting P2P lenders and others that operate a loan-based crowdfunding platform which facilitates loans to lending businesses.
The London Stock Exchange ("LSE") requires all AIM companies with securities admitted to trading on AIM to have a Legal Entity Identifier (“LEI”) code. This is in order to ensure compliance with the obligations under Markets in Financial Instrument Directive (“MiFID II") and Market Abuse Regulation, which require market operators, such as London Stock Exchange, to collate LEI codes for each issuer with securities admitted to trading.
MiFID II will introduce a new designation of “SME Growth Market” that operators of qualifying markets can voluntarily apply for. London Stock Exchange, as operator of the largest market for small and medium sized growth companies in the EU, has applied to the FCA for AIM.
The FCA is proposing to automatically convert individuals from the Approved Persons Regime to the Senior Managers and Certification Regime; the majority of firms will not need to submit applications to convert Approved Persons to Senior Managers.
Firms will have the option, but not the obligation, to continue to provide projections to retail investors outside of the Packaged Retail and Insurance-based Investment Products (PRIIPs) standardised key information document (KID), providing they are produced in line with COBS rules
The Global Legal Entity Identifier Foundation (GLEIF) has published its first Entity Legal Forms (ELF) Code List, showing more than 1,600 entity legal forms across over 50 jurisdictions. These form the basis of the unique Legal Identity Identifier (LEI), required from 3 January 2018 for any firm subject to MiFID II transaction reporting obligations - otherwise they will not be able to execute a trade on behalf of a client eligible for a LEI and does not have one.
The PRIIPs Regulation requires those manufacturing a packaged retail and insurance-based investment product (“PRIIP”) to draw up a key information document ("KID") containing standard information, and requires persons advising on or selling PRIIPs to provide the KID to retail investors, with effect from 1 January 2018.
The biggest change to Europe’s Data Protection rules in 20 years will come into force in May 2018. The General Data Protection Regulation (“GDPR”) will give people new rights to access the information companies hold on them, require firms to better manage the data they have and bring new (and potentially much higher) fines. Having been discussed for the past four years, companies will need to be ready to adhere to the rules under GDPR from 25 May 2018.
