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Financial services updater | Norton Rose Fulbright

Financial services updater - international edition

23 January 2012

London office building


Key industry sectors


Welcome to the latest international edition of our financial services updater.

Highlights this week include:

  • Treasury Select Committee Report on the Financial Conduct Authority
  • Policy Statement 12/1: Auctioning of greenhouse gas emission allowances: Feedback to CP11/14

ARROW visit coming up? It is important that firms properly prepare themselves for an ARROW visit. There are many ways in which we can assist in this preparation to ensure that the process runs smoothly. For further information please contact either Jonathan Herbst or Peter Snowdon

Capital adequacy

Capital instruments: Pre-issuance notification

In Handbook Notice 114 (November 2011) the FSA stated that, from 1 February 2012, all firms that calculate their regulatory capital under GENPRU had to notify it before issuing any capital instrument that they wished to include as regulatory capital, either at solo or group level.

The FSA has created a new web page on its website concerning Capital instruments: Pre-issuance notification.

The web page briefly sets out the circumstances in which the obligation arises and what firms need to tell the FSA. It also contains links to further guidance including FAQs and the notification form.

View Capital instruments: Pre-issuance notification, 16 January 2012

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Clearing & settlement

CPSS-IOSCO publishes final report on requirements for OTC derivatives data reporting and aggregation

The International Organisation of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS) have published a final report on the over-the-counter (OTC) derivatives data that should be collected, stored and disseminated by trade repositories (TRs). The report addresses Recommendation 19 in the October 2010 report of the Financial Stability Board entitled Implementing OTC derivatives market reforms.

The report specifies minimum requirements for reporting data to a TR and for the reporting by a TR to regulators, as well as types of acceptable data formats. The report also discusses issues relating to authorities’ and reporting entities’ access to data, and disseminating selected OTC derivates data to the public while taking into account any confidentiality constraints. The report also addresses data aggregation mechanisms and tools needed to enable authorities to aggregate data in a manner that fulfils their regulatory mandates, including methods, rationale and possible tools to implement data aggregation such as legal entity identifiers. The report also makes recommendations in the following key areas: minimum data reporting requirements, access to data and development of a standard international product classification system.

View CPSS-IOSCO publishes final report on requirements for OTC derivatives data reporting and aggregation, 17 January 2012

The T2S Framework Agreement: A management summary

TARGET2-Securities (T2S) is one of the most ambitious projects that the Eurosystem has embarked upon. The purpose of T2S is to provide harmonised delivery-versus payment (DvP) settlement in central bank money in a variety of currencies for almost all heavily traded securities circulating in Europe. It will therefore be a major step forward in creating a single market in securities, removing many of the Giovannini barriers to cross-border clearing and settlement, as well as acting as a catalyst for further harmonisation in post-trading services. It is intended that T2S will make cross-border settlement identical – in terms of cost, risk and technical processing – to domestic settlement. Owned by the Eurosystem, operated on a cost-recovery basis and designed for the benefit of the users, T2S aims to be a state-of-the-art securities settlement platform.

In November 2011, the Governing Council of the European Central Bank (ECB) endorsed the T2S Framework Agreement and related schedules. The Framework Agreement is the core legal document governing the rights and obligations of the Eurosystem and the central securities depositories (CSDs) in relation to the development and operation of T2S.

The ECB has now published a management summary which summarises the structure and content of the Framework Agreement.

View The T2S Framework Agreement: A management summary, 17 January 2012

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Consumer credit

The regulation of consumer credit - Consumer Panel position paper

The Office of Fair Trading is currently responsible for regulating the consumer credit market. In December 2010, the Treasury and the Department for Business, Innovation and Skills published a joint consultation looking at the future of this sector. In this paper the Government outlined a preference to transition consumer credit regulation to a FSMA-style regime by transferring responsibility to the proposed Financial Conduct Authority (FCA).

The Financial Services Consumer Panel (FSCP) has now published a position paper in which it supports the proposal that responsibility for consumer credit regulation should be transferred to the FCA, initially under the Consumer Credit Act regime, but with an aim of reviewing whether transitioning to FSMA-style rules would be appropriate at a suitable time.

View The regulation of consumer credit - Consumer Panel position paper, 17 January 2012

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Regulation and compliance

ESRB publishes recommendation on the macro-prudential mandate of national authorities

The European Systemic Risk Board (ESRB) has published a recommendation on the macro-prudential mandate of national authorities.

The recommendation provides that Member States should designate a competent authority in national legislation to conduct macro-prudential policy. The ultimate objective of this authority is to safeguard the stability of the financial system.

The recommendation also provides that Member States should bestow on the macro-prudential authority the powers to conduct macro-prudential policy on its own initiative or as a follow-up to recommendations or warnings from the ESRB. The macro-prudential authority should also have the necessary independence to fulfil its tasks and should be able to issue public and/or confidential statements on systemic risk.

The ESRB calls on Member States to take the necessary action before 1 July 2013 and, by June 2012, to communicate their intentions with respect to implementation and to report on developments to date.

View ESRB publishes recommendation on the macro-prudential mandate of national authorities, 16 January 2012

View Recommendation of the European Systemic Risk Board on the macro-prudential mandate of national authorities, 16 January 2012

ESRB publishes recommendation on funding of banks in US dollar

The European Systemic Risk Board (ESRB) has published a recommendation on US dollar-denominated funding of banks. The recommendation is addressed to national supervisory authorities of Member States.

The ESRB recommends that:

  • National authorities intensify their monitoring action to prevent EU credit institutions from accumulating future excessive funding risks in US dollars. In particular such authorities are called on to closely monitor maturity mismatches, funding concentration, the use of US dollar currency swaps and intra-group exposures. National authorities should encourage credit institutions to take action before these risks reach an excessive level. At the same time measures to limit exposures should avoid having an adverse effect on existing financing in US dollars.
  • National authorities should ensure that EU banks include management actions in their contingency funding plans for handling a shock in US dollar funding. In addition, national authorities should assess the feasibility of these plans at the level of the banking sector.

The ESRB calls on national authorities to report on the implementation of the recommendation by June 2012.

View ESRB publishes recommendation on funding of banks in US dollar, 16 January 2012

View Recommendation of the European Systemic Risk Board on US dollar denominated funding of credit institutions, 16 January 2012

Info letter: Financial Conglomerates (issue 7)

The European Commission has published the January 2012 edition of its info-letter concerning financial conglomerates. The info-letter covers:

  • The first amending Directive to EU financial conglomerates legislation which entered into force on 9 December 2011. The central character of this first revision implies that supervisors can simultaneously apply banking consolidated supervision, insurance group supervision and supplementary supervision at the level of the same parent entity, in case that parent is a holding company.
  • Work concerning further amendments to EU financial conglomerates legislation. The Commission plans to publish a review report after the summer of 2012. Any legislative initiative will follow after this report, if deemed necessary, in 2013.
  • The Joint Forum’s consultative paper entitled Principles for the supervision of financial conglomerates. The Commission is considering the implications of this consultative paper from a European perspective and a call for evidence will be issued in due course.

The info-letter also states that a conglomerates conference will be held in Brussels on 28 June 2012. This event is being organised back to back to the Joint Forum plenary meeting taking place in Amsterdam 26-27 June 2012.

View Info letter: Financial Conglomerates (issue 7), 16 January 2012

Opinion of the Consultative Working Party of the Legal Services of the European Parliament, the Council and the Commission - MiFID review proposal

The Council of the European Union has published an opinion by the Consultative Working Party of the Legal Services of the European Parliament, the Council and the Commission on the legislative proposals for the review of the Markets in Financial Instruments Directive (MiFID review).

Comments in the opinion include:

  • That the explanatory memorandum to the proposals should have specified which provisions of the current legislation remain unchanged.
  • Certain amendments in the proposals should have been identified by using the grey-shaded type generally used for marking substantive changes. The specific amendments are set out in the opinion.
  • The proposed recast Directive should have included a correlation table and that certain wording be used in the repealing article.

The working party states that the proposal does not comprise any substantive amendments other than those identified in the opinion.

View Opinion of the Consultative Working Party of the Legal Services of the European Parliament, the Council and the Commission - MiFID review proposal, 16 January 2012

Annual Report on the application of the CRA Regulation

From 1 July 2011, the European Securities and Markets Authority (ESMA) was given exclusive responsibility for the registration and supervision of credit rating agencies (CRAs) in the EU. So far 16 CRAs have been registered by ESMA.

ESMA has now published its first annual report on the application of article 21(5) of the EU Regulation on Credit Rating Agencies. The report:

  • Covers how ESMA and competent authorities dealt with the assessment of the completeness and compliance of CRA applications.
  • Explains how CRAs have adapted to the requirements set out in Annex I of the CRA Regulation.
  • Discusses the supervisory action carried out by ESMA in the course of 2011 and its assessment of staffing and resource needs.
  • Provides an update on the implementation of CEREP, the aggregated credit ratings database accessible to the public, which will go live in January 2012.
  • Describes ESMA’s policy work in 2011.
  • Informs on the work carried out by ESMA regarding the assessment of third country regimes under the endorsement and certification provisions in the CRA Regulation.

View Annual Report on the application of the CRA Regulation, 12 January 2012

ESMA comment letters to EFRAG and IASB regarding IASB’s ED Investment Entities

The European Securities and Markets Authority (ESMA) has published a comment letter to both EFRAG and the IASB concerning IASB’s exposure Investment Entities.

ESMA supports the proposed requirement for investment entities to measure investments in entities that it controls at fair value through profit or loss in accordance with IFRS 9 (Financial Instruments Classification and Measurement) rather than consolidating such investments. However, ESMA believes that the IASB should further deliberate on how to achieve that objective. In particular the IASB should:

  • Introduce a main principle that the general business model of the parent investment company is to invest for capital appreciation, investment income or both.
  • Identify the exit strategy as an additional criterion. An exit strategy is specific to the business of investment entities and should be in place as part of the business model.

ESMA also states that whilst it would not support an overly prescriptive requirement for the format of disclosures, it may be helpful to users of the information to include the proposed schedules (of investments and financial highlights) as a disclosure requirement. ESMA also calls on the IASB to clarify the impact of any amendment to IAS 28 (Investment in Associates).

View ESMA comment letter to EFRAG regarding IASB’s ED Investment Entities, 16 January 2012

View ESMA comment letter to the IASB on its ED Investment Entities, 16 January 2012

Response from the Court of the Bank of England on accountability recommendations

The Court of the Bank of England (the Bank) has published its response to the recommendations made by the House of Commons’ Treasury Committee (the Treasury Committee) and the Joint Committee on the draft Financial Services Bill on the Bank’s accountability.

Key points in the response are:

  • The new responsibilities for the Bank in the area of financial stability will need to be accompanied by new accountability mechanisms.
  • That an oversight committee be established with direct access to the policymaking processes and papers in the Bank.
  • The role of the oversight committee should be to assess whether the processes employed in making financial stability policy decisions have considered a full range of options and have taken reasonable account of the relevant information, analysis, differing views amongst policymakers, and challenges from outside the Bank.
  • The oversight committee should commission reviews from outside experts concerning the performance of the Bank’s financial stability policymakers.
  • The forthcoming crisis management Memorandum of Understanding between the Bank and the Treasury should establish a clear framework for coordination. It should also establish a power for the Chancellor, when public funds are at risk and there is a serious threat to financial stability, to direct the use of the Bank’s tools of crisis management.
  • The Bank supports the Treasury Committee’s recommendation that future Governors of the Bank be appointed for a single eight-year term.

The Treasury Committee has issued a short press release on the Bank’s response. The Treasury Committee’s chairman, Andrew Tyrie MP‚ stated:

“The Bank of England’s response requires careful consideration. The Treasury Committee intends to produce a short report in time for consideration by the Chancellor before he publishes the Financial Services Bill at the end of the month. Whilst supporting some of the Committee’s recommendations, on several key points the Court of the Bank of England falls short of what is needed. These points will be set out in the Committee’s report.”

View Response from the Court of the Bank of England on the recommendations made by the Treasury Committee and the Joint Committee on the draft Financial Services Bill on the accountability of the Bank of England, 17 January 2012

View Bank of England’s proposals for reform fall short of what is needed, claims Treasury Committee Chairman, 17 January 2012

Treasury Select Committee Report on the Financial Conduct Authority

The House of Commons’ Treasury Select Committee (the Committee) has published a report on the proposed new Financial Conduct Authority (FCA), to advise the Government in preparation for the drafting and publication of the Financial Services Bill (the Bill) in early 2012.

The report begins with an analysis of how the FCA fits into the proposed regulatory structure, followed by a consideration of its objectives. It then looks at the proposed lines of accountability for the FCA and makes suggestions for improvement. The report then outlines the FCA’s place in the wider regulatory architecture, including how the FCA should coordinate with the PRA and the EU. Finally, the report looks at the proposed new powers of the FCA, such as early warning notices and product intervention.

Some of the key conclusions in the report are:

  • Competition should be central to the culture of the FCA.
  • The Government should re-examine the need for the FCA’s strategic objective. The report states that the strategic objective, as set out in the draft Bill, may lead the FCA to seek to enhance confidence in markets at times when that confidence may be misplaced. There is also the risk of confusion due to there being multiple tiers of objectives and duties.
  • It is not necessary to transfer the competition powers of the Office of Fair Trading (OFT) to the FCA. Instead, the Committee prefers an approach whereby the FCA can refer issues of competition law to the OFT.
  • The FCA should develop more reliable estimates of its own cost effectiveness.
  • The Government should examine the scope for differentiating between retail consumers and wholesale consumers in the draft Bill.
  • There should be improved communication between the FCA and the industry.
  • The draft Bill does not provide for adequate accountability, or a framework for sufficient scrutiny of the FCA. Therefore, the draft Bill should be revised to ensure that the FCA is properly accountable to Parliament and that the necessary tools are available.

The report is accompanied by a press release which contains a summary of the background to the report, as well as comments from the chair of the Committee, Andrew Tyrie MP.  

View Treasury Select Committee Report on the Financial Conduct Authority, 13 January 2012

View Treasury Select Committee Report on the Financial Conduct Authority: Volume 2: Additional Written Evidence, 13 January 2012

Policy Statement 12/1: Auctioning of greenhouse gas emission allowances: Feedback to CP11/14

In July 2011 the FSA published Consultation Paper 11/14: Auctioning of greenhouse gas emission allowances. In this paper the FSA consulted on measures to complement the Treasury’s implementation of a new regulatory regime applicable to platforms that will conduct auctions in emission allowances.

The FSA has now published Policy Statement 12/1: Auctioning of greenhouse gas emission allowances: Feedback to CP11/14 (PS12/1). In PS12/1 the FSA reports on the responses to its earlier consultation and sets out the changes it has made to the Handbook. The FSA’s response to the earlier consultation is set out under three headings:

  • Provisions for a Recognised Investment Exchange’s default rules.
  • Auction products.
  • Language.

The new rules came into effect on 22 December 2011 and the FSA states that there will be a further consultation in the Spring in relation to bidding on an auction platform.

View Policy Statement 12/1: Auctioning of greenhouse gas emission allowances: Feedback to CP11/14, 12 January 2012

Notice of undertaking - National House Building Council

The Office of Fair Trading (OFT) is the principal enforcer of the Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations). However, the FSA is a “qualifying body” under the Regulations, which means that it has powers to tackle unfair terms.

By agreement with the OFT, the FSA is responsible for considering the fairness (within the meaning of the Regulations) of standard terms in financial services contracts issued by FSA authorised firms or appointed representatives of firms that undertake any regulated activity. This means that the FSA is responsible for considering the fairness of terms in many types of financial services contracts, including those relating to mortgages, general insurance, pensions, investments and long term savings.

The FSA has now issued a notice of undertaking from the National House Building Council undertaking not to use a term in its NHBC Buildmark policy (an insurance policy which covers defects in the way a consumer’s new home is built) which the FSA considers may be unfair.

View Notice of undertaking - National House Building Council, 17 January 2012

BBA response to questionnaire on MiFID/MiFIR 2 by Markus Ferber MEP

The British Bankers’ Association (BBA) has published its response to the questionnaire issued by Markus Ferber MEP on the review of the Markets in Financial Instruments Directive (MiFID).

The BBA’s response to the questionnaire includes:

  • That its members do not agree with the proposal to include custody as a core service. The BBA argues that if custody is to be included as a core service there needs to be a clear definition of this service and clarity on which provisions apply.
  • An EU passport for third country firms has the potential to improve EU investors’ and issuers’ access to third country markets. However, it needs to be carefully designed not to limit or discourage third country participation in EU markets or routine professional and counterparty interactions with third country firms to the detriment of EU investors and corporates, or the access of third country issuers to funds in the EU markets. The proposals as they stand may seriously hinder global trade.
  • That its members support a well calibrated definition of Organised Trading Facility. However, the definition in its current form is too high level.
  • The proposals define high frequency trading and algorithmic trading but does not distinguish the two concepts.
  • That its members are concerned that an outright ban on inducements for portfolio managers is inappropriate. The existing MiFID requirements on inducements provide sufficient safeguards as all investment advisors are already under an obligation to recommend products that are suitable for consumers and to disclose inducements. Any concerns around conflicts of interest would be better addressed by requiring firms that offer inducement-based services to obtain explicit consent from clients for the fees.
  • That its members feel that the revised best execution requirements are generally workable.
  • That its members believe that the revised rules on pre-trade transparency could cause drastic structural change (with unintended consequences) if not appropriately considered and defined with clear objectives in the text.

View BBA response to questionnaire on MiFID/MiFIR 2 by Markus Ferber MEP, 13 January 2012

CLLS response to Markus Ferber MEP’s questionnaire on the European Commission’s proposals for MiFID II/MiFIR

The City of London Law Society (CLLS) has published its response to the questionnaire issued by Markus Ferber MEP on the review of the Markets in Financial Instruments Directive (MiFID). CLLS comments include:

  • That the European Commission has not justified the proposed deletion of the exemption contained in article 2.1(k) MiFID.
  • To the extent that emission allowances are brought into the scope of MiFID, that a mechanism needs to be found to ensure that in the negotiations the specific merits of extending individual provisions of MiFID are fully considered in each case and the European Parliament is urged to facilitate such consideration.
  • Greater certainty concerning the scope of the activity “safekeeping and administration” is needed if it is to become a core service.
  • Extending the MiFID authorisation requirements in the way that the Commission proposes would significantly damage the ability of EU investors and firms to access the services of third country firms.
  • That there are at least two fundamental problems with the proposed definition of “Organised Trading Facility”.
  • That the proposed definition of algorithmic trading is too wide, capable of capturing any trading which makes use of computer technology.
  • That it does not agree that an absolute prohibition on inducements as suggested by draft article 24(6) works for the benefit of consumers in every case.

View CLLS response to Markus Ferber MEP’s questionnaire on the European Commission’s proposals for MiFID II/MiFIR, 16 January 2012

FSA imposes fine on UK Insurance Limited

The FSA has found that two insurance firms, Direct Line and Churchill, have failed to prevent complaint files from being improperly altered before being submitted for review in breach of Principle 2. While the fine of £2,170,000 relates specifically to failings by Direct Line and Churchill, since the breach occurred the relevant business and liabilities of both firms have been transferred to UK Insurance Limited (UKI). UKI is therefore responsible for paying the fine. Prior to an internal file review exercise, management had told staff that they would face internal disciplinary investigation if they were found not to be operating to required standards. This increased the risk of alteration of files. Instructions to staff in relation to the collation of files for the FSA were not sufficiently clear. The files were not collated by individuals who had not worked on the files or checked for improper alterations by the risk department prior to being sent to the FSA. One staff member had forged signatures of colleagues on case assessment reports.

However, the alterations were minor and the breach did not result in any customer detriment or have a significant impact on the FSA’s review. The FSA assessed this as a “level 3” breach and considered that a penalty of £3.1 million reflected this seriousness. No adjustment was made in relation to aggravating or mitigating factors or for deterrence. A 30 per cent settlement discount was applied.

View FSA imposes £2.17 million fine for failure by Direct Line and Churchill to conduct their businesses with due skill, care and diligence, 18 January 2012

View Final Notice - UK Insurance Limited, 18 January 2012

France: AMF comments on a number of provisions from the MiFID review proposals

The French Securities regulator (the Autorité des Marchés Financiers or AMF) has commented on the European Commission’s legislative proposals revising the Markets in Financial Instruments Directive.

In essence, while the AMF agrees that the legislative proposals progress certain issues such as investor protection, regulation of over-the-counter trades and reinforcement of pre- and post- trade transparency requirements, two areas are of particular concern:

  • The AMF believes that the new proposed concept of Organised Trading Facility (OTF) cannot be a category of “trading venue” in its own right. This is on the basis that regulated markets and MTFs are characterised by the non-discretionary execution of transactions and are subject to pre-determined rules. Operators of OTFs, in contrast, will have a degree of discretion over how a transaction will be executed (although they will be subject to investor protection, conduct of business and best execution requirements). Instead, the AMF argues for the incentivisation of trading on “trading venues” for all standardised and sufficiently liquid financial instruments by setting a limit beyond which an OTF would have to become a fully fledged MTF.
  • The AMF regrets that the treatment of high frequency trading considered under the legislative proposals is not ambitious enough. The AMF suggests the inclusion of rules on tick sizes, fee structures, order execution/cancellation ratios, or rules ensuring that co-location and fee structures do not undermine fair competition between market participants.

The extent to which the AMF’s views will be taken into account when the legislative proposals are finalised remains to be seen.

For further information please contact Roberto Cristofolini or Anselme Mialon

France: Implementation of UCITS IV is now complete

As previously reported, the implementation of UCITS IV into French law and regulation has been a gradual process. Legislative and regulatory provisions were implemented into the French Monetary and Financial Code over the summer and the French Securities regulator (the Autorité des Marchés Financiers or AMF) incorporated the necessary changes into its Rulebook last October. However, a number of AMF Instructions needed to be revised in order to complete the implementation.

Existing AMF Instructions have been reclassified and two are of interest for UCITS:

  • Instruction 2011-19 on authorisation procedures, establishment of a KIID and a prospectus, and the periodic reporting requirements of French UCITS and foreign UCITS marketed in France (notably setting out what information the notification file for marketing a UCITS or UCITS sub-fund in France is required to include).
  • Instruction 2011-15 on procedures for calculating the global exposure of UCITS, in order to implement CESR’s Guidelines on Risk Measurement and the Calculation of Global Exposure and Counterparty Risk for UCITS, published on 28 July 2010, and ESMA’s Guidelines to competent authorities and UCITS management companies on risk measurement and the calculation of global exposure for certain types of structured UCITS, issued on 14 April 2011.

For further information please contact Roberto Cristofolini or Anselme Mialon

France: AMF launches public consultation on overhaul of certain aspects of rules governing takeover bids

The French Securities regulator (the Autorité des Marchés Financiers or AMF) has launched a consultation on suggested amendments to provisions contained in its Rulebook dealing with takeover bids.

Two proposed changes that are particularly noteworthy:

  • Insertion of mandatory acceptance threshold condition in takeover bids. As a preliminary note, under French regulation, the offeror launching a voluntary takeover bid may (but is under no requirement to) stipulate in its offer that a certain number of securities must be tendered and below which the offer will lapse. The AMF suggests reversing this current position and making a 50 per cent acceptance condition mandatory for all voluntary offers covered by the normal procedure (i.e. where the offeror does not already own a majority of the target's shares prior to the launch of the takeover bid). The rationale for the suggested amendment may be traced to a number of recent takeover bids where the absence of an acceptance threshold condition was viewed suspiciously by the corporate body of the target as a sign that the offer was not intended to give the bidder a majority stake but to allow the latter to gain creeping control of the target. Supporters of this amendment argue that changing the position would allow successful offers that clearly result in the bidder gaining statutory control of the target company, while critiques claim this would result in takeover bids being harder to launch with less liquidity being consequently offered to shareholders of potential targets.
  • Introduction on French semi-regulated markets of new exemptions from the requirement to file a mandatory takeover bid under certain circumstances. At present any investor that happens to hold more than 50 per cent of the share capital or voting rights of a company listed on French semi-regulated market Alternext Paris (French equivalent to AIM) is required to make a takeover bid to purchase all of the outstanding shares of such company. As an exception, the AMF may grant, upon request by the relevant investor, an exemption from the requirement to file a mandatory takeover bid in a number of limited circumstances, such as going through the 50 per cent threshold as a result of the subscription of new shares of a company in financial difficulties or as a result of a transaction submitted to the approval of the general meeting of shareholders. In addition to these existing exemptions, it is proposed to add two new cases where the threshold triggering the mandatory takeover bid is exceeded consecutive to: (i) the subscription of a restricted capital increase; or (ii) the exercise or conversion of securities giving access to equity, thereby filling in a loophole in current regulations.

The deadline for responding to the consultation is 31 January 2012. Following a review of the consultation responses the AMF will implement the new provisions into its Rulebook.

For further information please contact Roberto Cristofolini or Anselme Mialon

Netherlands: Publication of updated guideline for shareholders

On 4 January 2012, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) published an updated guideline for shareholders in relation to the notification duty in relation to voting rights, share capital, control and share capital interests in issuers. The guideline was updated by the AFM as on 1 January 2012 the legislative proposal regarding the introduction of a notification requirement for certain cash-settled instruments came into force.

View AFM publishes guideline for shareholders, 4 January 2012

For further information please contact Floortje Nagelkerke

Netherlands: Policy rule on notification duty cash-settled instruments

In December 2011, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) consulted on a policy rule (beleidsregel) concerning the disclosure obligation in relation to cash settled instruments. The policy rule came into force as of 1 January 2012 and includes a calculation method on the number of shares in an issuer to which the relevant financial instruments pertain and the circumstances pursuant to which a basket or an index falls under the disclosure obligation. The AFM also published a feedback statement to its earlier consultation on the policy rule.

View The policy rule (in Dutch), 30 December 2011

View The feedback statement (in Dutch), 23 December 2011

For further information please contact Floortje Nagelkerke

Netherlands: Measures relating to pension funds

On 6 January 2012, the Dutch Central Bank (De Nederlandsche Bank, DNB) announced that, given the impact of pension changes on macro-economic developments, DNB will permit pension funds which will need to curtail pension rights and benefits to a maximum of 7 per cent. In addition, due to the exceptional conditions of the financial markets DNB has decided to make a correction to the yield curve as at the end of 2011. Both these measures aim to reduce uncertainty concerning pensions. After this adjustment, the weighted average funding ratio of the pension funds as at 31 December 2011 comes out at an estimated 98 per cent. DNB believes that pursuant to these measures, approximately 125 pension funds will have to take corrective action. Without these measures this would be approximately 180 pension funds.

View Measures taken by DNB to reduce uncertainty about pensions, 6 January 2012

For further information please contact Floortje Nagelkerke

Netherlands: On-line course

On 17 January 2012, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) published on their website a course relating to the approval process of prospectuses by the AFM. This on-line course consists of video as well as briefing notes. This course deals with the requirements for issuers on publishing an approved prospectus and how to draft a prospectus.

View The on-line course (in Dutch), 17 January 2012

For further information please contact Floortje Nagelkerke

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Ombudsman News - Issue 99

The Financial Ombudsman Service (FOS) has published the latest issue of its newsletter, Ombudsman News. This issue of Ombudsman News includes articles on:

  • Recent disputes involving debt.
  • Complaints about personal accident insurance.
  • A snapshot of the FOS complaints figures for Q3 2011/12 financial year.

The newsletter also contains an article from the chief ombudsman, Natalie Ceeney, on proposed new arrangements for charging financial businesses case fees.

View Ombudsman News - Issue 99, 17 January 2012

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40 minute briefing series - January 2012 to April 2012

We are pleased to announce that the invitation for the next series of 40-minute briefings is now available.

If you cannot access this link, please copy and paste the address below into your web browser.

Fifth annual Markets Infrastructure Group seminar - 7 February 2012

At 15.00 on Tuesday 7 February 2012 the Norton Rose LLP financial services team will be holding its fifth annual Markets Infrastructure Group seminar. 

If you cannot access this link, please copy and paste the address below into your web browser.

Financial services regulatory products: Phoenix and Pegasus

Having difficulty keeping up with the pace of the Government's regulatory reform proposals?

Phoenix is our new financial services product that is an online resource designed to help those who are starting their UK regulatory reform projects. It sets out the latest developments and timing of the Government's reform programme plus the key resource papers from the Treasury, Bank of England, FSA and the ICB. The latest Norton Rose LLP briefing notes, videos and webcasts are also available.

The Phoenix main page can be found here.

Behind the curve on the MiFID review?

We have launched a second online resource product called "Pegasus". Pegasus is a new financial services product that is an online resource designed to assist those starting work on MiFID review projects. 

The Pegasus main page can be found here.

Financial services Fireside Fridays

Please click on the links below:

  • 2012: The regulatory year ahead (20 January 2012)
  • The regulatory year in review (16 December 2011)
  • MiFID review and third country issues (25 November 2011)
  • The MiFID Review (21 October 2011)
  • The regulatory regime for energy and commodity companies (7 October 2011)
  • The final report of the Independent Commission on Banking (23 September 2011)

Financial services webcasts

Please click on the links below:

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  • Publications

    Blog: Basel III

    On 12 September 2010, the Group of Governors and Heads of Supervision of the Basel Committee on Banking Supervision announced that they had reached agreement on...

    October 2011

    Blog: AIFM Directive - 2011

    Please be advised that this blog is no longer in use and has been replaced by our online technical resource “AIFMD expert”.


    Blog: MiFID review

    The Markets in Financial Instruments Directive (MiFID) entered into force in November 2007.

    March 2011