Financial Institutions Regulation

Recent Articles

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  03.11.2023

  United Kingdom

  Removal of the Bankers’ Bonus Cap

  Following receipt of responses to their joint consultation paper issued last December (PRA CP15/22 and FCA CP22/28), the PRA and the FCA have now published a policy statement (PS9/23) confirming that the bankers’ bonus cap will be removed. This means that firms will now be able to pay bonuses exceeding 100% of fixed pay (or 200% with shareholder approval). This change has been introduced more quickly than expected - it will apply from 31 October 2023 and applies to performance years ongoing on that date, as well as to future performance years. The main rationale for the quicker than expected...

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  29.09.2023

  United Kingdom

  Regulators consult on measures to improve diversity and inclusion and promote healthy cultures in financial services

  After much talk and the promise of action, on 25 September 2023, the Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) (together the “Regulators”) each published a consultation paper, CP23/20 (the “FCA Consultation Paper”) and  CP18/23 (the “PRA Consultation Paper”) (together, the “Consultation Papers”) seeking to boost diversity and inclusion to support healthy workplace cultures, reduce groupthink and unlock talent in financial services. There is no doubt that culture remains at the heart...

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  22.08.2023

  Luxembourg

  CSSF clarifications on registration of virtual asset service providers are available!

  On 17 August 2023, the Commission de Surveillance du Secteur Financier (the « CSSF ») published frequently asked questions (the “Q&As”) on virtual asset service providers (the “VASPs”) to supplement its previous Q&As on (i) virtual assets for credit institutions and undertakings for collective investments and (ii) the fight against money laundering and terrorist financing (“AML/CTF”) for individuals/investors.The twenty Q&As are based on the current Luxembourg laws and do not take into consideration EU texts such as the regulation...

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  17.08.2023

  Luxembourg

  CSSF Thematic Review on the implementation of sus­tain­ab­il­ity-re­lated provisions in the investment fund industry

  IntroductionAs sustainable finance gains momentum, regulators worldwide are placing greater emphasis on the integration of environmental, social, and governance (ESG) considerations into investment practices. In that context, the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) has taken several initiatives to verify the correct implementation of the sustainability-related requirements in the investment fund industry, including (i) on-site inspections on the integration of sustainability-related provisions in the governance of investment fund managers (IFMs) and (ii) an off-site...

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  22.06.2023

  United Kingdom

  The Consumer Duty and outsourcing: remediation or not?

  The Consumer Duty (“Duty”) applies to all regulated firms that have a material influence over, or determine, retail customer outcomes. As firms approach the key 31 July 2023 milestone for their implementation work, focus turns to the potential impact on firms’ outsourced service arrangements for both day 1 and on operational controls on an ongoing basis.In-scope agreementsThe Duty will apply even where a firm does not have a direct contractual relationship with the retail customer. This may be where the firm has outsourced arrangements with:an unregulated service provider whose...

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  15.06.2023

  Luxembourg

  New Commission’s proposal on the EU Retail Investment Strategy

  Background“Only 38% of consumers are confident that the investment advice they receive from financial intermediaries is primarily in their best interest”, a recent Eurobarometer survey revealed.1The current trend is towards more retail investments, notably driven by retail-oriented initiatives such as the newly introduced ELTIF reform – please refer to our dedicated page on this topic – . In this context,  the European Commission (the EC) is constantly seeking to create an improved and fairer market, increasing trust, and encouraging retail investors’ participation...

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