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Prosek’s Financial Regulation Roundup: September 8, 2017

Rupert Eyles

Here are the top stories on the financial regulatory landscape in the U.S., EU and around the world over the past two weeks.

U.S. News:

Federal Reserve:

  • Winds of change from the Trump administration as sources close to the White House suggest that Gary Cohn is no longer the president’s top choice for Federal Reserve chair. Cohn’s criticism of Trump’s response to the Charlottesville demonstrations may be behind the rift. (Reuters: read more)


  • Four months to go until MiFID II and anxiety about international compatibility with the regulation shows no signs of stopping. A post on the Financial Technologies Forum from Lynn Strongin Dodds contended that US asset managers especially will “have their work cut out for them,” as a mere 6% of asset managers polled were completely ready to meet new reporting requirements. (FTF News: read more)

COO Liability

  • Compliance officers already have one of the most thankless jobs in finance, but they now may face a new challenge: personal liability for regulatory failure. A recent which implicated an outsourced COO alongside two fraudulent asset managers is the latest example of this. (Reuters: read more)

E.U. News:

Pressure builds between May and U.K. Businesses

  • A Reuters report this week stated that Theresa May’s office has asked several FTSE 100 companies to sign a public letter backing the government’s Brexit efforts. This move was met with apprehension at best by many of the FTSE executives, especially as fears that the current Brexit plan is speculated to increase bureaucracy for most U.K. financial institutions. (Reuters: read more).

FCA urged to release report into RBS's turnaround unit

  • The Financial Conduct Authority (FCA) is facing growing pressure to release a leaked report about Royal Bank of Scotland that alleged many companies suffered from “inappropriate action” by its Global Restructuring Group unit. Nicky Morgan, who chairs parliament’s Treasury Select Committee, wrote to Andrew Bailey, chief executive of the FCA, asking him to release the long-delayed report. Last year, the FCA published a summary of the initial findings of an investigation that cleared RBS of the most serious allegation that the bank systematically killed off healthy businesses for profit. But the full report, seen by the BBC, found struggling companies placed in the restructuring unit had a slim chance of emerging. (Reuters: read more)

FCA continues exit fee probe of five insurers

  • The FCA has dropped one of the investigations into a closed book life firm. The regulator announced that it is no longer investigating Police Mutual but stated investigations into five other firms remain ongoing. Earlier this year the FCA said it was looking into six firms, which, as well as Police Mutual, included Abbey Life, Countrywide, Old Mutual, Prudential and Scottish Widows, after finding a lack of transparency around the fees they charge customers. (FT Adviser: read more)

MIFID II Research

  • As part of this MiFID II readiness campaign, another major entity has elected to not charge for its financial research: Dutch megabank ING. MiFID II’s requirements state that research budgets must be delineated from other line items in order to demonstrate the value to the consumer. ING joins many other large institutions who will no longer charge for research, among them J.P. Morgan. (Citywire: read more)


Bitcoin & Blockchain

  • Blockchain and related technologies have had a hot week in the press. China this week banned its citizens from the creation of cryptocurrencies, known as “ICOs” or “initial coin offerings.” (Coindesk: read more) Meanwhile in Europe, France has taken steps to ensure that blockchain-based technologies are safely regulated. (National Law Review: read more) In the States, Microsoft has partnered with Israeli bank Hapoalim in a project which hopes to create a blockchain-based platform for digital bank guarantees. (Investopedia: read more)

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