Regulatory Timeline | Financial Services - April 2016
Published on 14th Apr 2016
“The financial sector will be particularly busy in the next 12 months. Long-awaited European legislation affecting payments and cards, market abuse, money laundering, and market transparency will all finally come into force. Domestically, tax changes and new FCA regulatory regimes and sourcebooks will drive the agenda.
Participants will need to act early if they are to ride this wave of regulatory change successfully.”
Kate Johnson, Partner, Osborne Clarke
1 April 2016 – Carried interest rules
From 1 April 2016, carried interest may be taxed as income or capital gains, depending on how long the underlying assets were held. This may create tension around when to realise assets.
1 April 2016 – FCA consumer credit regime
On 1 April 2016, the FCA’s regime for consumer credit regulation came into force (replacing the interim permission regime). From 1 April 2016 firms without full FCA permission (or who have interim permission but have not already applied for full permission) must not lend to consumers.
6 April 2016 – People with significant control (PSC) register
As of 6 April 2016, unlisted UK companies and LLPs are required to maintain a statutory register of certain information on the individual(s) who ultimately control them. This information needs to be provided to Companies House from 30 June 2016.
This will affect investment funds and other investors in UK companies or with UK LLPs in their groups. English limited partnerships will not fall under this regime but it will apply to Scottish limited partnerships from June 2017.
For more information on the PSC register see our dedicated hub here.
6 April 2016 – Advising on peer-to-peer (P2P) agreements
On 6 April 2016, advising on P2P agreements became a regulated activity. Crowdfunding platforms and others in the P2P sector will need to check their permissions and documentation.
6 April 2016 – Innovative Finance ISA
The new Innovative Finance ISA account will allow interest and gains from P2P loans to benefit from ISA tax advantages. P2P lending platforms with the appropriate regulatory permissions (and ISA manager status) have been able to offer these new accounts from 6 April 2016.
9 June 2016 – Competition in the card payments market
On 9 June 2016, the final provisions of the EU’s Interchange Fee Regulation come into force. From that date, merchants need not accept an issuer’s full payment card range. Merchants should review their agreements with acquirers to obtain the best deals.
30 June 2016 – FCA complaints handling
The FCA’s new “DISP” sourcebook comes into force on 30 June 2016. The new rules change the way regulated firms handle and report complaints.
3 July 2016 – EU Market Abuse Regulation (MAR)
On 3 July 2016, the remaining provisions of the MAR come into force. The MAR will supplement the EU’s market abuse regime, with more varied and tougher sanctions.
18 September 2016 – Payment Accounts Directive (PAD)
The PAD takes effect on 18 September 2016. PAD gives consumers the right to open basic bank accounts (for receiving salary, paying household bills etc) and aims to make it easier for consumers to compare and switch between payment accounts.
3 January 2018 – MiFiD II
MiFiD II comes into force on 3 January 2018. MiFiD II aims to increase market transparency and protect the integrity of the financial system and investors.
7 March 2017 – FCA’s employee codes of conduct within banks, building societies, credit unions and investment firms
The FCA’s new regime to increase the accountability of individuals in the financial services industry has applied to senior managers in banks, building societies, credit unions and investment firms (relevant firms) since 7 March 2016. For senior managers in relevant firms, the FCA’s APER Handbook has been replaced by the COCON Handbook.
From 7 March 2017, the regime will extend to cover most staff at relevant firms (but not ancillary staff such as receptionists, security, cleaners etc.). It affects the HR processes for appraisals, references and training.
26 June 2017 – Fourth Money Laundering Directive (MLD4) and Revised Wire Transfer Regulation (RWTR)
The MLD4 and RWTR are designed to improve defences against money laundering and terrorist financing.
Firms are to adopt a risk-based approach and greater transparency obligations will be imposed.
EU Member States are required to implement the MLD4 into national legislation by 26 June 2017, which is the date that the RWTR comes into effect. However, the European Commission and Council of Europe are pushing Member States to implement the MLD4 early – by the end of 2016.
13 January 2018 – Second Payments Services Directive (PSD2)
The PSD2 introduces greater transparency and information requirements for existing regulated payments entities. Unregulated payments entities may need to become authorised and compliant, or change their business models.
EU Member States are required to implement the PSD2 into national law by 13 January 2018.