The United States, Britain and France launched airstrikes against targets in Syria following chemical weapons attacks blamed on the Assad regime. Italy’s President Sergio Mattarella called for a conclusion to discussions between political parties on forming a government which are on-going 6 weeks after the general election. Mark Zuckerberg faced questions from US law makers on Facebook’s policies on data usage and electoral interference. Speaker Paul Ryan confirmed that he would not seek re-election to the United States House of Representatives in November. Below are the main stories in finance and regulation for the last two weeks.


Central Bank Director General Derville Rowland said that culture was now seen by regulators as a key root cause of the major conduct failings in the financial services industry. She said that €164m (excluding tracker mortgages) had been made by way of compensation by financial firms to consumers in the last four years. The Central Bank had conducted 117 enforcement investigations under its administrative sanctions procedures since 2006. She noted that regulators worldwide were asking whether ‘intrusive regulation and compliance measures’ were sufficient to ensure firms worked in the best interests of consumers.

The High Court confirmed that legal privilege attached to documents created in regulatory investigations. The Director of Corporate Enforcement requested documents from Leslie Buckley, the former chairman of Independent News and Media plc, in relation to a whistleblowing investigation. Mr Justice Kelly confirmed that 10 of 11 documents requested did meet the test for the protection of legal professional privilege and were not disclosable to the Director.

The Financial Services Ombudsman issued its report for 2017, which showed that it received 4,538 complaints, a similar number to the previous year. Mediated complaints showed an increase, following the introduction of the new mediation process; the increase in mediation also helped account for a drop in the level of determinations to 171 from 727 the previous year. 8% of complaints were upheld in full, with 47% upheld in part. 52% of complaints related to banking and 42% to insurance products; the remainder related to investment products, a similar mix to 2016.


The European Commission set out its New Deal for Consumers, emphasising its record of delivery on 80% of consumer focused initiatives undertaken in the Juncker Presidency. It issued a number of fact sheets for consumers and businesses, and details of its consumer redress mechanism. Four directives are to be updated under the initiative: unfair terms in consumer contracts, consumer protection in the indication of offered prices, unfair business-to-consumer practices and consumer rights. The Injunctions Directive will be replaced with a new mechanism for representative actions for the collective redress of consumers.

The European Securities and Markets Authority’s Trends, Risks, Vulnerabilities Report No.1 for 2018 found that the European Alternative Investment Fund industry was highly concentrated around a few large participants and asset classes. The vast majority of AIFs were managed under European Union rules using passporting rights. The report provides the first statistics – based on end-2016 data – on the size and concentration of this investment sector.

The International Swaps and Derivatives Association prepared to issue new ISDA Master Agreements which can be governed under Irish and French law. The ISDA Master Agreement is currently available for use under English, New York and Japanese law, but members requested the association to produce a version of the agreement which could be governed by the law of a country within the European Union, as Brexit takes effect. ISDA was also working on other variations of European governing laws, French and Irish law having been chosen as initial examples of the civil and common law systems.

   United Kingdom

In Brexit News, the Financial Conduct Authority confirmed it would postpone projects and cut back on non-critical operations in order to meet the demands of Brexit; HMRC also announced that its planned modernisation would delayed be due to Brexit related work. Business surveys showed that concerns about leaving the EU without a deal had fallen amongst business leaders, whilst the CBI called for alignment with EU rules post Brexit, warning that the benefits of deregulation in some sectors were vastly outweighed by the costs which would be incurred if smooth access to EU markets was not achieved. Norway signalled that it was willing to roll over existing trade arrangements with the UK during any transition period. Central Bank of Ireland Deputy Governor Ed Sibley warned that Brexit would substantially alter the functioning of the UK, Ireland and European financial systems. The Guardian newspaper reported that almost half of the necessary legislation to leave the European Union had not been introduced to Parliament.

The Financial Conduct Authority warned firms offering cryptocurrency derivatives that they would need to comply with MiFID II and the FCA Handbook. Whilst cryptocurrencies of themselves were not currently regulated investments, financial derivative variants could be. The warning applied to both cryptocurrencies and tokens issued through initial coin offerings.

The Financial Conduct Authority warned that insurance firms were failing to meet rules designed to promote transparency and encouraging shopping around. The rules, from April 2017, require firms to show the premium previously paid against the premium quoted for renewal, together with a prominent message to shop around. The warning came with the threat that the regulator was ready to take enforcement action against non-compliant firms.

The Financial Conduct Authority’s business plan for 2018/19 emphasised that Brexit preparations would dominate its work and budgets for the coming year. The regulator will continue to focus on culture in financial services firms, the high cost of credit, tackling financial crime, data security and resilience, innovation, the treatment of existing customers and long terms savings and pensions.


President Donald Trump was reported to be considering re-joining the Trans-Pacific Partnership in a potential policy about turn. The World Trade Organisation and the International Monetary Fund both warned of the damaging impact of tariffs on the global economy. President Xi of China repeated promises to broaden market access for foreign financial services companies and to reduce limits on foreign investment in automotive, shipbuilding and aviation sectors.

IOSCO issued recommendations on improving information on the secondary corporate bond markets available to regulators and the public. The transparency recommendations aim to support the price discovery process and facilitate better informed investor choices. The report updates IOSCO’s last work in this area from 2004, and contains 7 recommendations to global regulators.

Topics covered by Better Regulation include
  • BRRD
  • Banking Structural Reform
  • Basel
  • Benchmarks Regulation
  • Brexit
  • Capital Markets Union
  • Capital Requirements Legislation
  • Central Securities Depositories Regulation
  • Credit Rating Agencies Regulation
  • Deposit Guarantee Schemes Directive
  • Dodd-Frank
  • EMIR
  • GDPR
  • Solvency II
  • Insurance Distribution Directive
  • Interchange Fees Regulation
  • Market Abuse/Insider Dealing
  • Markets in Financial Instruments Legislation
  • Money Laundering Directives
  • Money Market Funds Regulation
  • Mortgage Credit Directive
  • Payment Services Directive
  • PRIIPs Regulation
  • Prospectus Directive
  • Ring-fencing
  • Securities Financing Transactions Regulation
  • Securitisation Regulation
  • Senior Insurance Managers Regime
  • Senior Managers Regime
  • Undertakings for Collective Investment in Transferable Securities Directive