Hello, and welcome to the latest financial services updater.
Like always there is a lot of information in the updater and the two highlights this week are an FSA Consultation Paper proposing certain changes to the client assets rules and a Policy Statement concerning regulating firms that bid for emissions auction products.
The first highlight is the FSA’s Consultation Paper proposing certain changes to the client assets rules. This is Consultation Paper 12/15: Client Assets Firm Classification, Oversight, Reporting and the Mandate Rules (CP12/15).
This is one of two Consultation Papers which we have been expecting on client assets, the other being a consultation on EMIR and porting, which incidentally the latest FSA Policy Development update states is expected in Q3 2012.
In CP12/15 the FSA consults on two areas of client assets policy, CASS oversight and reporting and the mandate rules.
In relation to oversight and reporting the FSA proposes certain clarifications to the CASS rules including the date when a firm becomes a CASS firm and when it must appoint someone to the CASS operational oversight function or CF10a.
In relation to the mandate rules the FSA’s proposals are designed to clarify their scope but the FSA also takes the opportunity to re-confirm their purpose.
The purpose of the mandate rules is that a firm that has mandates must establish and maintain adequate records and internal controls in respect of its use of those mandates.
The deadline for comments on CP12/15 is 30 September 2012. The FSA plans to issue a Policy Statement in November 2012, with the final rules coming into force on 1 January 2013.
The second highlight this week concerns Policy Statement 12/12: Regulating bidding for emissions allowances under Phase Three of the EU Emissions Trading Scheme: Feedback to CP12/6 (PS12/12).
In PS12/12 the FSA sets out rules on authorising and supervising firms that intend to bid for emissions auction products across the EU on auction platforms operating under the EU Commission Auction Regulation.
These rules are due to be finalised by the FSA Board on 26 July 2012 and come into effect the next day. From 27 July 2012 the FSA will be accepting applications to undertake the new regulated activity of bidding in emissions auctions.
Authorised firms can find the relevant variation of permission form, along with some explanatory notes in Appendix 2 of PS12/12.
In section 4 of PS12/12 the FSA also notes that there is a possibility that a limited number of auctions might take place on the central EU platform before auctions commence on the UK platform.
The FSA makes the point that in the event that a firm wishes to take part in these auctions, it should make a note to that effect on its application form.
Where an application is appropriately straightforward, and provided that the application is received early enough, the FSA believes that it may be possible to vary the firm’s permission in time for it to take part in those auctions. However, the FSA also states that this statement should not be taken to prejudice its normal, agreed service level targets.
I hope you find this week’s updater helpful, good-bye
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