Keeping You Informed on the Latest Regulatory Changes Impacting Financial Services
Welcome to the August edition of Regulation Round-Up, our monthly newsletter. Each month, We Complements’ Hannah Keane covers the key stories from HMRC and the FCA, along with other important updates on financial services regulations.
FCA calls on firms to improve treatment of politically exposed persons (PEPs)
The FCA has recently had some concerns about how firms are meeting the requirement to undertake enhanced due diligence on PEPs. Because of this, the FCA has reviewed how firms are treating PEPs.
The FCA found that most firms didn’t subject PEPs to excessive or disproportionate checks, but they stated that all firms could improve their treatment of PEPs. They are proposing some changes to guidance, summarised as follows:
- UK PEPs should be treated as lower risk than non-UK PEPs
- Non-executive board members of civil service departments should not be treated as PEPs solely for that reason
- Firms should have greater flexibility in who can approve or sign off PEP relationships
The guidance is open for consultation until 18 October 2024.
The critical role of PEP compliance in financial institutions
FCA changes listing rules for companies seeking to list their shares in the UK
The FCA has set out a simplified listings regime, starting from 29th July 2024, for companies who want to list their shares in the UK. The FCA’s hope is that this will boost growth and innovation by streamlining the listing process and removing frictions to growth once companies are listed.
These proposals are in response to the UK Listing Review. In 2021, the Review found that “the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008.”
The FCA has said that the new rules involve allowing greater risk, but that the changes will “better reflect the risk appetite the economy needs to achieve growth.”
The FCA states that the changes are the “most significant changes to the UK’s listing regime in over 3 decades.”
The final rules are set out in Policy Statement PS24/6.
FCA issues ‘call for information’ on big tech and digital wallets
The FCA, jointly with the Payment Systems Regulator, is looking to gather information on the benefits and risks of digital wallets. As well as looking to understand the benefits of digital wallets, they want to understand whether digital wallets could raise problems with competition, consumer protection or market integrity.
In particular, the FCA and PSR are interested in hearing from all stakeholders “across the payments and wider financial services landscape”, including digital wallet providers, as well as those who use their services.
UK regulators keen to understand the future of digital wallets
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