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GOODNEWS July 2013

3 Since our last regulatory update earlier in 2013 we have seen fundamental change to the financial services sector. Legal cutover went ahead as planned on 1 April 2013 and banking reform continues apace. The expected uncertainty from the move to regulation by the Financial Conduct Authority and Prudential Regulatory Authority has yet to become apparent but dual regulated firms are still settling into the new regime. On 19 June 2013, the UK Parliament published the fifth and final report of the Parliamentary Commission on Banking Standards: "Changing banking for good". The Report included recommendations relating to a new framework for individu-als in the banking sector, replacing the existing approved persons regime; reforms to the remuneration of senior management and bank staff whose actions or behaviour could seriously harm the bank, its reputation or its customers; and a section on sanctions and enforcement, including a new criminal offence of reckless misconduct. These recommendations have the potential to force significant changes in the sector. The Financial Services (Banking Reform) Bill is now at the House of Lords stage. Another major regulatory development in the UK market is the transfer of consumer credit regulation from the OFT to the FCA. Now the regulatory model has been published, firms are starting to prepare for the inevitable changes this will bring. For smaller OFT regulated firms the change in governance could mean a significant change in the regulatory burden. Publication of the Draft Consumer Rights Bill on 12 June 2013 determined a very significant legislative overhaul for the UK. An introduction to Parliament in 2015 is likely and the Bill will impact all existing consumer rights laws. Major initiatives coming out of Europe continue to develop. The Alternative Investment Fund Managers Directive was finally implemented in the UK on 22 July 2013. Significant developments on the Market Abuse Regulation, the Markets in Financial Instruments Directive and the Capital Require-ments Directive are still expected and there are indications that these will be advanced as quickly as possible going forward. To date progress seems slow at best. The need for UK influence with Brussels policy makers remains a priority. The regulatory outlook remains challenging and regulated firms must stay abreast of developments to ensure they are prepared for all expected changes in regulatory direction. Rebecca Rogers, Professional Support Lawyer, Addleshaw Goddard LLP +44 (0)113 209 2158 rebecca.rogers@addleshawgoddard.com Regulation Round Up Provided By Forthcoming Compliance Training Courses: Financial Crime Update 15th August 2013 £99 Essential Compliance Update 13th September 2013 £99 Employment Law and the Prudential Regulation Authority 26th September 2013 £89 Conflicts of Interest 22nd October 2013 £89 Introduction to Compliance & Regulation 29th October 2013 £150 Full details at goodacreuk.com


GOODNEWS July 2013
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