FCA Updates

Close Links Amendments
In September 2013, the FCA published CP13/9 – Quarterly Consultation Paper No. 2 in which it was proposed to change the mechanism of submitting controllers and close links reports to full electronic submission through GABRIEL. SUP 11 and 16 of the FCA Handbook were amended on 1 March 2014 to implement the changes to reflect the electronic submission through GABRIEL of forms REP001 – Close Links Report (annual), REP001a – Close Links Notification (monthly) and REP002 – Controllers Report. For those firms that submit monthly close links notifications, the due date of the first electronic submission is 31 March 2014.

Dealing Commissions
In November 2013, the FCA published CP13/17 – Consultation on the use of dealing commission rules, in order to clarify the rules that allow investment managers to use dealing commissions, paid from their customers’ funds, to acquire execution-related and research goods and services.  The consultation paper (the “CP”) forms part of a broader discussion on the matter to consider whether wider reforms are needed in the longer-term to address shortcomings in the use of dealing commission regime.

The deadline for comments on this CP was 25 February 2014, and the FCA expects to publish a Policy Statement on this in Q2 2014.

Thematic Review of Best Execution
The current best execution obligation was revised in 2007 through the introduction of MiFID, and has been transposed largely in COBS 11.2. The FCA consulted extensively on best execution before issuing PS07/156 in 2007 and followed this in 2009 with a report of its supervisory experiences.  CESR (now ESMA) and the European Commission have also issued guidance on the scope of the MiFID best execution obligation. The FCA recommends that firms should use this guidance when reviewing their systems and controls to consider how they are discharging their best execution obligations.
The FCA is currently undertaking a thematic review of best execution in different markets. To date, this work indicates that there are some aspects of the above detailed guidance and COBS rules that are not currently embedded in firms’ assessment of best execution.

The FCA aims to publish the findings of the thematic review later in 2014.


Clearing obligations – first CCPs
The first central counterparties (CCPs) under EMIR are expected to be authorised by national competent authorities by 15 March 2014. Such CCP will be responsible for clearing OTC derivative trades under EMIR.

Following the authorisation of the first CCPs, ESMA has to determine whether the OTC derivatives authorised to be cleared by the CCPs should be subject to the clearing obligation and submit draft technical standards (RTS) to the Commission. ESMA will launch a public consultation on this point where it considers the merits of subjecting the OTC derivatives in question to the clearing obligation.

In ESMA’s discussion paper of 12 July 2013 (ESMA/2013/925), it was estimated that it could take between 9 to 16 months from the time ESMA receives notification of a CCP having been authorised to the entry into force of the clearing obligation. It is therefore expected that the clearing obligation in relation to the first class of OTC derivatives should start some time in the second half of 2014.

Reporting obligations – next deadline
The first reporting date for derivative contracts under EMIR was on 12 February 2014. Derivative contracts which were entered into on or after 12 August 2012 and were still outstanding on 12 February 2014, had to be reported to trade repositories by the February deadline. Contracts which were outstanding on 16 August 2012 and were still outstanding on 12 February 2014 must be reported to a trade repository by 13 May 2014.


Countries like Finland and Belgium are expected to implement the AIFMD. This will be of interest to managers looking to market their funds in these jurisdictions.

In Luxembourg, managers are expected to submit their AIFM applications by 1 April 2014.

Regulatory Hosting

Laven offers a UK regulatory hosting platform which provides clients with the opportunity to conduct regulated activities as an Appointed Representative (AR).


Follow us on LinkedIn for company updates and the latest news.

Recent articles