Recent Articles

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  07.11.2023

  Financial services outsourcings and AI

  With the AI summit last week in Bletchley Park where a world-first agreement has been made between the UK, EU, US and China on the opportunities and risks posed by AI, we thought it was a good time to provide our initial thoughts on AI and the potential impact on regulated outsourcing arrangements. As outlined in the Bletchley Declaration, AI presents a significant opportunity for regulated firms to enhance and automate processes and tasks, both internally and externally via third party service providers, alongside some complex challenges and risks.Ultimately, our view is that the challenges are...

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  07.11.2023

  FCA provides warning on market sounding regime

  On 31 October 2023, the Financial Conduct Authority (FCA) published Market Watch No. 75, sharing some observations about the market soundings procedure under the UK Market Abuse Regulation (UK MAR), and a reminder to market sounding recipients (MSRs) to independently assess whether they have inside information, even if the disclosing market participant (DMP) has not disclosed any inside information.  The market soundings regime is a well-established procedure, allowing issuers to disclose inside information to selected investors to determine interest in a transaction before it is announced....

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  06.11.2023

  Pathways to progress: Intelligent Design for an AI World

  IntroductionThe UK financial regulators are finally beginning to turn their minds in a serious way towards how they will supervise firms seeking to deploy artificial intelligence (AI) in an increasingly automated industry.  In Discussion Paper 5/22 (DP5/22), the UK regulators split the AI lifecycle into three distinct stages: pre-deployment, deployment and recovery/redress.This briefing focuses on the matters firms should have in mind when in the pre-deployment phase.  It builds on previous statements made by the regulators in relation to the use of AI, machine learning (for example in...

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  02.11.2023

  UK Cryptoasset Regulation: Three Key Updates

  On 30 October 2023, HM Treasury (“HMT”) published 3 key updates on its proposed approach to regulating cryptoassets under the UK’s financial services regulatory framework, namely:Response to feedback received on its February 2023 consultation and call for evidence on the future financial services regulatory regime for cryptoassets (the “February 2023 Consultation”);Policy update and consultation response on its plans for regulating fiat-backed stablecoins; andResponse to its May 2022 consultation on the management of failure of systemic digital settlement asset firms.Together,...

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  27.10.2023

  AI in financial services: industry feedback published and other developments

  On 26 October 2023, the Bank of England (“BoE”), Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) (together, the “Supervisory Authorities”) published a joint Feedback Statement on ‘Artificial Intelligence and Machine Learning’ (FS2/23) (the “Feedback Statement”). The Feedback Statement is a follow-up to the Discussion Paper (DP5/22) on the same topic published in October 2022 (the “BoE/FCA Discussion Paper”).On 26 October 2023, the UK Government also published a Discussion Paper on...

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  24.10.2023

  Shortening the cycle: ESMA Call for Evidence on shortening the EU settlement cycle

  BackgroundOn 5 October 2023, the European Securities and Markets Authority (“ESMA”) launched a Call for Evidence on the shortening of the settlement cycle in the EU (the “Call for Evidence”).Under the EU Central Securities Depositories Regulation (“CSDR”), all transactions in transferable securities and certain other similar instruments which are executed on a trading venue must complete by no later than the second business day after the trade date (i.e. on “T+2”). This requirement was originally introduced in 2014, with the aim of increasing the...

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