Welcome to the UK Regulation Round Up, a regular bulletin highlighting the latest developments in UK and EU financial services regulation.

Key developments in February 2024:

29 February

FCA Regulation Round‑up: The UK Financial Conduct Authority (“FCA”) published its regulation round‑up for February 2024.

LIBOR: The FCA published a report containing the outcome of its review of the use of its power, under Article 23D of the UK Benchmarks Regulation ((EU) 2016/1011) (“UK BMR”) for three‑month synthetic sterling LIBOR.

27 February

Diversity & Inclusion: The House of Commons Treasury Committee published correspondence from the FCA (here) and HM Treasury (here) following up on certain matters discussed at the oral evidence session held on 17 January 2024 as part of its “Sexism in the City” inquiry.

ESG: The Financial Reporting Council (“FRC”) published a policy update in relation to its review of the UK Stewardship Code.

Money Market Funds: The Financial Stability Board (“FSB”) published a thematic peer review report on money market fund (“MMF”) reforms.

26 February

FSMA: A draft version of the Financial Services and Markets Act 2000 (Disapplication or Modification of Financial Regulator Rules in Individual Cases) Regulations 2024 has been published on legislation.gov.uk, alongside an explanatory memorandum.

Artificial Intelligence: The European Central Bank (“ECB”) published a blog post by Elizabeth McCaul, ECB Supervisory Board Member, on using AI to enhance supervision.

AIFMD II: The Council of the European Union adopted the proposed Directive amending the Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”) and the UCITS Directive (2009/65/EC) relating to delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services, and loan origination by alternative investment funds.G20: The FSB published a letter (dated 20 February 2024) from Klaas Knot, FSB Chair, to G20 finance ministers and central bank governors ahead of their 28 and 29 February 2024 meeting in São Paolo.

23 February

ESG: The UK Government published its response to the House of Commons’ Environmental Audit Committee’s November 2023 report: “The financial sector and the UK’s net zero transition.”

22 February

Cryptoassets: The European Commission adopted four Delegated Regulations (here, here, here and here) supplementing the Regulation on markets in cryptoassets ((EU) 2023/1114) (“MiCA”). The Delegated Regulations specify certain criteria for classifying asset‑referenced tokens and e‑money tokens as significant, product intervention powers, supervisory fines and fees.

Cryptoassets: The Law Commission launched a consultation on a new short bill which recognises digital assets as property, following the recommendations in its June 2023 report. The short consultation closes on 22 March 2024.

PRA Rules: The Prudential Regulation Authority (“PRA”) published a policy statement (PS4/24) on its approach to reviewing its rules, together with a statement on the review of rules.

20 February

Consumer Duty: The FCA published a speech by Sheldon Mills, FCA Executive Director, Consumers and Competition, on the consumer duty. It focuses on implementing the duty for closed products and services, and the progress firms have made to date regarding its implementation for open products and services.

Consumer Duty: The FCA published its findings following a review of firms’ implementation of the consumer duty together with a summary of the key information it found. It highlights examples of good practice and areas for improvement. Please refer to our dedicated article on this topic here.

MiFIR / MiFID II: The Council of the EU published a press release announcing that it has adopted the proposed amendments to the Markets in Financial Instruments Regulation (600/2014) (“MiFIR”) (2021/0385 (COD)) and the MiFID II Directive (2014/65/EU) (“MiFID II”), which were introduced primarily to improve access to market data and trade transparency.

AML: The Council of the EU published an information note (6713/24) that includes the final compromise text reflecting the political agreement it reached with the European Parliament in December 2023, on the proposed Regulation establishing the Anti‑Money Laundering Authority (2021/0240(COD)).

16 February

Artificial Intelligence: The UK Government published correspondence about the approach to AI regulation from Michelle Donelan, Secretary of State for Science, Innovation and Technology, and Bim Afolami, Economic Secretary to the Treasury and City Minister. The correspondence includes a letter to the FCA and a letter to the Bank of England.

Securitisation: Commission Delegated Regulation (EU) 2024/584 amending regulatory technical standards laid down in Delegated Regulation (EU) 2019/1851 as regards the homogeneity of the underlying exposures in simple, transparent and standardised securitisations has been published in the Official Journal of the European Union.

14 February

AML: The Council of the EU published the texts (here and here) of the political agreement on the proposed AML Regulation (2021/0239(COD)) and the proposed Sixth Money Laundering Directive (MLD6) (2021/0250(COD)).

ESG: The Council of the EU published the text of the political agreement reached on the proposed Regulation on the transparency and integrity of environmental, social and governance (“ESG”) rating activities (2023/0177(COD)).

Market Conduct and Reporting Issues: The FCA published issue 77 of Market Watch, its newsletter on market conduct and transaction reporting issues.

13 February

MiFID II: ESMA published a public statement on the deprioritisation of supervisory actions on the obligation to publish the best execution reports required under Commission Delegated Regulation (EU) 2017/576 (RTS 28 reports), which supplements the MiFID II Directive (2014/65/EU) in the light of the political agreement on the proposals relating to MiFID II market data access and transparency.

09 February

ESG: The European Parliament and the Council of the EU announced that they had reached a provisional agreement on the proposal to postpone by two years the deadline for adopting European Sustainability Reporting Standards for certain sectors and for certain third‑country undertakings. During informal trialogue negotiations, the legal format of the proposal was changed from a Decision to a Directive.

08 February

AML: The FCA published a corporate document on reducing and preventing financial crime which, among other things, identifies four areas of focus for the coming year.

07 February

Artificial Intelligence: The Department for Science, Innovation and Technology published a response to the AI White Paper consultation, announcing AI investment and initiatives.

AIFMD II: The European Parliament adopted the proposed Directive amending the AIFMD and the UCITS Directive (2009/65/EC) relating to delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services, and loan origination by alternative investment funds.

06 February

Market Abuse: ESMA published a warning raising awareness of some requirements established under the Market Abuse Regulation (596/2014) that apply to the posting of investment recommendations and of the risks of market manipulation when posting on social media.

Artificial Intelligence: The House of Lords published a report on large language models and generative AI which identifies ten priority actions, including support for innovation, better management of immediate risks and protection of copyright.

02 February

Data Reporting: ESMA updated its Q&As on data reporting under the Credit Rating Agencies Regulation (1060/2009), EMIR (648/2012), MiCA and MiFIR.

Reporting Requirements: The European Parliament published the report (2023/0363(COD)) of its Economic and Monetary Affairs Committee on the European Commission’s legislative proposal for a regulation amending certain reporting requirements in the fields of financial services and investment support.

ESG: The FCA published a new webpage on its sustainability disclosure requirements and investment labelling regime.

01 February

Overseas Funds Regime: The Financial Services Act 2021 (Overseas Funds Regime and Recognition of Parts of Schemes) (Amendment and Modification) Regulations 2024 (SI 2024/114) have been published, together with an explanatory memorandum.

BigTech: The Joint Committee of the European Supervisory Authorities published a report (JC 2024 02) setting out the results of a stocktake of BigTech direct financial services provision in the EU.

Photo of John Verwey John Verwey

John Verwey is a partner in the Corporate Department and a member of the Private Funds Group.

John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, change in control, market abuse, Electronic Money…

John Verwey is a partner in the Corporate Department and a member of the Private Funds Group.

John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, change in control, market abuse, Electronic Money Regulations, Payment Services Regulations and client money rules. He represents a variety of clients that range from private equity firms and insurance intermediaries to global investment banks and sovereign wealth funds.

Photo of Andrew Wingfield Andrew Wingfield

Andrew Wingfield is a partner in the Corporate Department and a member of our Private Equity Mergers & Acquisitions Group. As businesses globally are impacted by the Coronavirus (COVID-19) pandemic, Andrew is a member of the firm’s Coronavirus Response Team helping clients respond…

Andrew Wingfield is a partner in the Corporate Department and a member of our Private Equity Mergers & Acquisitions Group. As businesses globally are impacted by the Coronavirus (COVID-19) pandemic, Andrew is a member of the firm’s Coronavirus Response Team helping clients respond and solve issues across myriad fronts.

Andrew undertakes a broad range of domestic and cross-border corporate and commercial work for both corporate and private equity clients, advising on acquisitions and disposals, joint ventures, mergers and public takeovers, flotations and equity capital markets and private equity investment.

He is called upon by financial institutions, private equity houses, management and corporates to lead on complex and high-value transactions. Andrew has a very strong financial institutions practice and has been recognized by Chambers UK and Legal 500 in recent years as the “go-to regulatory M&A lawyer” for regulated institutions such as banks, lenders, payment providers, insurance companies, wealth managers or other financial institutions transactions.

In addition, Andrew is widely recognized as a leading M&A and private equity lawyer. In Chambers UK, Andrew has been noted as “dynamic and commercial” and for providing “tailored, practical advice.” A client told Legal 500, “Andrew Wingfield – best lawyer I ever worked with. Super helpful, goes extra mile where needed.”

Photo of Richard Bull Richard Bull

Richard Bull is a partner in the Corporate Department and a member of our Private Equity and Mergers & Acquisitions Groups.

Richard advises on a wide range of corporate work, including M&A, private investments, corporate venturing, joint ventures and corporate restructurings. Richard has…

Richard Bull is a partner in the Corporate Department and a member of our Private Equity and Mergers & Acquisitions Groups.

Richard advises on a wide range of corporate work, including M&A, private investments, corporate venturing, joint ventures and corporate restructurings. Richard has extensive experience of acting on private equity, growth and expansion capital transactions of all types and sizes for sponsors and management teams, both of a domestic and international nature, with a particular focus in the financial services and technology industries.

Richard is described by Legal 500 “as one of the most capable PE lawyers in the market” and “truly excellent.” Richard was also identified by a survey of private equity sponsors undertaken by The Lawyer as one of the top private equity lawyers based in London, and as a highly regarded private equity and M&A lawyer by IFLR 1000.

Photo of Oliver R. Howley Oliver R. Howley

Oliver Howley is a partner in Proskauer’s Technology, Media & Telecommunications Group. He is a trusted advisor to businesses in the technology, manufacturing, sports and financial services sectors, providing valued input on IP, technology and data-related strategies and transactions.

Oliver is a multi-specialist…

Oliver Howley is a partner in Proskauer’s Technology, Media & Telecommunications Group. He is a trusted advisor to businesses in the technology, manufacturing, sports and financial services sectors, providing valued input on IP, technology and data-related strategies and transactions.

Oliver is a multi-specialist, with a day-to-day practice covering commercial contracts, IP, technology and data protection work. He regularly advises on the structuring and terms of contracts relating to the creation, licensing and monetisation of technology and data products, with a particular focus on machine learning and artificial intelligence systems. He also has extensive experience in advising on the IP, technology, data and carve-out aspects of corporate transactions (including joint ventures, acquisitions, disposals and investments) and on sponsorship, image rights and endorsement deals in the sports sector.

Oliver has been recognized as a “Rising Star” in The Legal 500 for consecutive years. Recent professional directories note that “no matter how complex the landscape, no detail escapes [Oliver’s] attention” and that his “logical… and forensic analytical approach make him a force to be reckoned with”. He also receives praise for his commercial contracts work and “niche in robotics and artificial intelligence”.

Photo of Mary Wilks Mary Wilks

Mary Wilks is an antitrust partner in the Corporate Department and a member of our Private Equity Transactions and Mergers & Acquisitions Groups.

Mary advises on a broad range of EU and UK competition law issues, including multijurisdictional mergers, behavioral investigations, complex supply…

Mary Wilks is an antitrust partner in the Corporate Department and a member of our Private Equity Transactions and Mergers & Acquisitions Groups.

Mary advises on a broad range of EU and UK competition law issues, including multijurisdictional mergers, behavioral investigations, complex supply and distribution arrangements, and foreign investment controls including, notably, the UK’s newly adopted National Security and Investment Act. She advises clients on the competition aspects of transactions including M&A, equity investments, consortium transactions and secondaries.

Mary works across all sectors, with particular experience in consumer products, healthcare, TMT and financial services.

Mary regularly counsels clients on their engagement with the Competition and Markets Authority, the European Commission, and other prominent international enforcement agencies and regulatory authorities.

Mary Wilks has a reputation as an “excellent lawyer” who “plays a leading role on a range of high-profile cases.” According to sources, “She is always fully on top of the detail but also able to pull out the most important points for the case.

Prior to joining Proskauer, Mary was a counsel in the antitrust, competition and trade department at another leading law firm in London.

Photo of Rachel Lowe Rachel Lowe

Rachel E. Lowe is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

Rachel advises on financial services regulation specializing in sustainable finance and ESG regulation. She has particular expertise in drafting and advising on…

Rachel E. Lowe is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

Rachel advises on financial services regulation specializing in sustainable finance and ESG regulation. She has particular expertise in drafting and advising on the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. Rachel has also supported with EU MiFID and AIFMD sustainability updates for clients, including from a governance and organizational perspective, as well as providing drafting and training support. She also advises on the Corporate Sustainability Reporting Directive (CSRD), including analysis of its applicability for large international group structures.

From a UK perspective, Rachel supports clients with the TCFD-related requirements in the Financial Conduct Authority’s ESG Sourcebook and is increasingly engaged on the UK’s Sustainability Disclosure Requirements (SDR).

More broadly, Rachel has worked with litigation colleagues to assist clients with understanding and mitigating greenwashing-related legal and regulatory risk.

Photo of Amar Unadkat Amar Unadkat

Amar Unadkat is a special regulatory counsel in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of financial services regulatory and compliance matters both from a UK and European perspective. Amar regularly advises his clients…

Amar Unadkat is a special regulatory counsel in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of financial services regulatory and compliance matters both from a UK and European perspective. Amar regularly advises his clients on issues relating to the Alternative Investment Fund Managers Directive (“AIFMD”), the second Markets in Financial Instruments Directive (“MiFID II”), as well as the latest ESG developments. Amar also focusses on UK regulatory compliance matters, including the FCA’s change of control regime, the appointed representative regime and the Senior Managers & Certification Regime.

Amar’s clients include private equity firms, investment managers and advisers, firms in the FinTech space, wealth management businesses, banks and sovereign wealth funds.

Photo of Michael Singh Michael Singh

Michael is an associate in the Private Funds Group in the Corporate Department.

Michael advises clients on a variety of regulatory issues both from a UK and European perspective. He also helps clients on fund related transactions. His clients include private equity firms…

Michael is an associate in the Private Funds Group in the Corporate Department.

Michael advises clients on a variety of regulatory issues both from a UK and European perspective. He also helps clients on fund related transactions. His clients include private equity firms, investment managers, FinTech companies and wealth management businesses.

He is dual-qualified as a German lawyer (“Rechtsanwalt”) and Solicitor of England and Wales and previously was in-house counsel at Deutsche Bank.

Photo of Sulaiman Malik Sulaiman Malik

Sulaiman Malik is an associate in the Corporate Department and a member of the Private Funds Group.

Sulaiman advises clients on a range of UK and international financial regulation. He advises private equity funds, hedge funds, sovereign wealth funds and other asset managers…

Sulaiman Malik is an associate in the Corporate Department and a member of the Private Funds Group.

Sulaiman advises clients on a range of UK and international financial regulation. He advises private equity funds, hedge funds, sovereign wealth funds and other asset managers, as well as banks, FinTechs, broker-dealers and governments.

Prior to joining Proskauer, Sulaiman trained at Simmons & Simmons in London, where he was seconded to Brevan Howard. He has also spent time at the UK’s Ministry of Justice and as an adviser to the Mayor of Brisbane, in Australia.

Sulaiman is a passionate advocate for diversity and inclusion. He previously worked at Rare, a market-leading diversity consultancy, and provides pro bono legal advice to a range of community and civil rights organizations.