i-law.com - Newsletter (Compliance Monitor)

‘Fit & Proper’? It can be hard to know

Pre-employment screening is not only merely strongly advised in today’s world, it is also a regulatory requirement for all financial institutions. In order to preserve and bolster the integrity of the financial services industry, the FSA has provided guidance on what it considers adequate levels of vetting for approved persons and by extension all others entering the industry in a permanent, temporary or contracting capacity. The need for vigilance is supported by evidence, the FSA says, to suggest that organised crime groups deliberately target firms, placing associates to commit frauds and especially identity theft. Alexandra Kelly of Powerchex examines firm’s obligations when recruiting staff and the thorny question of references .

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Enforcement of money awards and the Financial Ombudsman

John Virgo and Philip Ryley take a look at the basis for enforcement of money awards through the County Court made by the Financial Ombudsman Service.

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

A sorry tale: advice standards in the IFA community

Just before the August bank holiday, the FSA produced a report of the mystery shopping and firm visits on which it based the hair-raising conclusions about advice standards contained in the recent Treating Customers Fairly (TCF) materials. The account of 55 firm visits and 50 mystery shops, all to IFA businesses, is enough to make anyone seriously concerned about the safety of financial advice, writes Adam Samuel.

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

MiFID and passporting

Passporting - the right to offer investment services to clients anywhere in Europe – is the key simplification in the Markets in Financial Instruments Directive (MiFID), which replaces the original EU Investment Services Directive (ISD) of 1993, with effect from 1 November 2007, says Alan Jenkins of Bearing Point. In this article he looks at the implications for the European Economic Area (EEA), which comprises Norway, Iceland and Liechtenstein, as well as the 25 EU member states, and the accession countries (Bulgaria and Romania) .

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Parker v FSA: a big fine but will it be paid?

In August, the Financial Services and Markets Tribunal published its decision in the market abuse case of Parker v FSA. Andrew Hart and Oliver Kerridge of Freshfields review the findings .

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Categorising clients: the MiFID model

In August the FSA published its paper on “Implementing MiFID’s Client Categorisation requirements”. This is not a formal consultation but is intended to give a preview of the FSA’s current thinking on implementing the Markets in Financial Instruments Directive requirements in this area. It reflects the industry’s request for guidance ahead of the FSA’s formal proposals which will be part of the ‘NewCOB’ consultation in October. Richard Stones of Lovells looks at some of the key issues in the light of the paper .

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Set fair – jobs and prospects

Keir Macintosh may be contacted on tel: + 44 (0) 20 7269 1819; email: keirmacintosh@michaelpage.com; www.michaelpage.com. Alternatively, his colleague Lindsay Reid can be reached on tel: +44 (0) 7269 1848; email: lindsayreid@michaelpage.com

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Foresters Friendly Society pays £55,000 over financial promotions breaches

Failure to check that financial promotions were clear, fair and not misleading before issue and associated weak record keeping during the period 1 January 2004 to June 2005 have led to a penalty of £55,000 against the Ancient Order of Foresters..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Pensions unlocking sales defects cost Braemar £182,000

Braemar Financial Planning Ltd has incurred a £182,000 penalty (including a 30% discount for early settlement) for “systemic failings” in its sales approach to pensions unlocking, a high risk strategy under which people of 50 and..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Walsall Bridge Insurance banned for not insuring customers

Failure to pass on premiums to insurers and intermediaries since at least March 2005 has cost Walsall Bridge Insurance Consultants Ltd its Part IV permission to carry on regulated activities. In November 2005, the FSA learnt that Walsall had take on..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

The Carphone Warehouse pays £245,000 fine for insurance sales breaches

Highstreet mobile phone retailer, The Carphone Warehouse, failed to send a Statement of Demands and Needs (SDN) in durable format (ICOB 4.4.1 and 4.4.2 (2)) to 118,000 customers, who bought phone insurance through its telesales channel in the period..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Kyte buffeted by £250,000 fine for client money and accounting failings

Kyte Group Limited (Kyte), which provides futures and options broking and clearing services to professional clients, has been fined £250,000 for failure to organise its operations responsibly and effectively in breach of Principle 3, and for..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Greater clarity on spending client commissions

In draft revised guidance on COB 7. 18 the FSA says that connectivity services and associated software are outside the range of research and execution goods and services that may be bought with client commissions generated by the investment activity..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Regency Mortgage Corporation pays £56,000 for PPI sales breaches

In its first action for mortgage payment protection insurance (MPPI) sales failures, the FSA has fined Regency Mortgage Corporation Ltd (Regency) £56,000 (which includes a 30% discount for early settlement). The fine covers the period 14 June..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

FSA streamlines approved persons regime

The FSA confirmed its intention to merge various controlled functions in August with the publication of CP06/15 ‘Reforming the Approved Persons regime’, including feedback on CP05/10, which first looked at the issue. The individual..

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006

Client money under MiFID

The Client Assets regime may be just part of the supporting cast of MiFID, but it should not be overlooked, and even non-MiFID firms need to keep an eye on the FSA’s plans in this area, warns Mathew Rutter of Norton Rose .

Online Published Date: 01 October 2006

Appeared in issue: Vol 19 No 2 - 01 October 2006