FS regulatory, accounting and audit bulletin - 4th edition 2014

Being better informed

Crowdfunding became the latest financial activity to come under regulatory scrutiny when the FCA finalised its rules in March. The crowdfunding rules apply to both loan-based and investment-based crowdfunding activities. Some firms will be subject to FCA regulation for the first time, when the OFT transfers consumer credit regulation to the FCA.

The EC also wants to unlock the potential from crowdfunding and see it flourish in the coming years. It intends to establish an expert group on crowdfunding to provide advice, particularly on exploring the potential of establishing a “quality label” to build trust with users and provide expertise in promoting transparency, best practices and certification.

Our feature article this month reviews the European legislative agenda as we gear-up for the European Parliamentary elections in May. We expect a number of big ticket reforms such as MiFID II, UCITS V, and Basic Bank Account Regulation to all clear EP at first reading before the elections, leaving the way clear for them to be adopted by mid-summer. Some other texts like IMD2 and the revised Payment Services Directive will be adopted in first reading but the trilogue negotiations on these measures will be postponed until the autumn when the new European Parliament is in place.

The UK life insurance industry was shaken by a trio of regulatory announcements in March that temporarily knocked billions off the market value of insurers. These developments may have long-term consequences for the industry, raising doubts over the viability of certain business lines.

The idea of treating customers fairly is a central thread to the FCA’s philosophy which pervades its supervisory approach to all financial firms. The FCA reiterated its commitment to this principle in the annual Risk Outlook and Business Plan which was published on 31 March 2014.

We hope you will find much to stimulate and interest you on these topics and the many other developments that we cover this month. March has proved another bumper month for regulatory change.

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