Prosecution news on Thursday out of the FCA… Read more
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Last year, retailer N Brown hiked the interest rate it advertised to customers who buy on credit. The move was a fairly large one, from 44.9 per cent to 58.7 per cent, the highest advertised annual percentage rate for any equivalent retailer, but it didn’t get much attention. The London-listed company, which owns brands like Jacamo, J D Williams and SimplyBe, didn’t shout about it in filings or on calls with analysts.
Which might be because nothing had really changed — N Brown had previously been advertising the wrong rate to customers. Read more
Online lenders in the UK, who call themselves “peer-to-peer”, have been salivating at the possibility of tapping the ISA market for funds, with the government introducing a new “Innovative Finance ISA” from April 6.
The change in the law will let online lenders stick their loans into a tax-efficient ISA wrapper, but there’s a snag — the lenders have to be fully authorised by the FCA before they can start selling their P2P/ISA wares. (Although that hasn’t stopped the likes of Ratesetter and Zopa releasing details of their ISA product in advance. Coming soon, etc). Read more
The FCA has posted one of its “Dear CFO” letters to the UK spreadbetting/CFD sector. It follows a review across ten firms which (surprise, surprise) found various areas of concern.
Would-be investors in CMC Markets, whose float closes on Thursday, might take particular note. They are, after all, being invited to help Peter Cruddas and his wife Fiona, along with Goldman Sachs, take more than £200m off the table…
Here are the two consultation papers on ring-fencing British retail banks from their investment banking counterparts. But in case you are wondering whether there’s a fresh joined-up-ness to financial regulation in the UK, see below a statement from the FCA… Read more
A market notice from the London Stock Exchange on Thursday reminded member firms of their settlement obligations under its rules, prompted by what it describes as “settlement delays in relation to transactions in New World Oil & Gas.”
The tiny Aim listed oil exploration group, you may remember, is the possible subject of a failure to read the small print short squeeze. Details on the strange situation below, but two things to conclude from the LSE’s statement: regulators are keeping a close eye on this one, but aren’t likely to step in and stop any squeeze. Read more
If American regulators get their way, Navinder Singh Sarao will spend the rest of his life in prison for having done what generations of traders did before him: post bids and offers that he hoped wouldn’t get filled. Meanwhile, sell-siders who deliberately misled investors about the sorts of loans getting packaged into private-label MBS face little threat of jail, nor do the traders who manipulated Libor. This is not the way to restore investor confidence in the markets.
For the few of you who don’t already know what Sarao has been accused of, it helps to consider a question that DE Shaw supposedly used to ask interview candidates before it got posted to the internet: Read more
Craig Pirrong, Streetwise prof and futures trading expert, delves into the case of the Hounslow Spoofer, and like us, smells a rat.
For one thing, notes Pirrong, the official complaint doesn’t offer much in the way of detail on the execution strategy. It’s all very well alleging that Sarao spoofed the market with bogus orders, but none of this explains how he actually made money from the strategy. Especially given that the numbers presented don’t seem to add up. Read more
The FCA on Wednesday slammed custodian Bank of New York Mellon with an unprecedented £126m fine for failing to comply with its Client Assets Sourcebook rules (the CASS rules) throughout the period of 2007-2013.
It’s not the biggest FCA fine ever, but it is the largest issued for a breach of this kind, and is levied against the world’s largest custody bank by assets. The previous largest fine for a CASS failing, for example, was £38m for Barclays.
The failings in hand relate to the systemic commingling (a.k.a pooling) of assets at the bank, that should really have been kept segregated. Read more
We feel sympathy for the FCA. But then, the hole in which it finds itself is of its own digging.
Consider the fresh news. Having spent eight months mulling over the evidence presented in Ian Hannam’s Upper Tribunal appeal against the regulator’s earlier imposition of a £450,000 fine for supposedly passing on inside information, the Upper Tribunal has concurred that Hannam did indeed breach the UK rulebook.
But as is gradually being realised, the rulebook itself is unworkable. It involves pursuing upright citizens for synthetic crimes. Read more
Fresh from the Upper Tribunal. Click below for the judgment.
The Financial Conduct Authority (FCA) has today issued two Warning Notice Statements. This is the sixth and seventh time the FCA have issued a Warning Notice Statement since it was given the power to do so by the Financial Services Act 2012. The Government’s principal rationale for giving the FCA this power was to promote early transparency of enforcement proceedings. Read more
The UK Financial Conduct Authority has published its long awaited rules for crowdfunders and peer-to-peer lenders. You can read the full policy statement here, but lets cut straight to some frothy outrage from Barry James, founder of the Crowdfunding Center.
On a day like today one has to wonder whether our FCA is the worst regulator in the western world. The words that spring first to mind are inflexible, stubborn and unimaginative. Maybe it’s time for a change.
More disciplinary action from the FCA, this time against an innocent individual who was innocent in the wrong way. (You’ll have to pay attention here, because it’s a bit complicated and goes back six years.) Tuesday’s statement from the regulator:
The Upper Tribunal (Tax and Chancery Chamber) has directed the Financial Conduct Authority (FCA) to ban former derivatives trader David John Hobbs from performing any role in regulated financial services. Read more
A friend of FT Alphaville who works in the real world, far from finance, asked us what we think about putting money with peer-to-peer lenders.
We advised him to buy gold-bitcoins instead, but it made us want to take a look. It turns out we’re not alone. The chancellor is expected on Thursday to launch a consultation on blessing peer-to-peer lending with inclusion in the UK’s popular ISA scheme for tax free savings accounts.*
But where we think we might be alone, for now, is worrying about something that has afflicted lenders from time immemorial: run risk. Read more
The Financial Conduct Authority has written to the banks, suggesting that they think long and hard before enforcing contractual terms agreed with their small business borrowers.
This post has been substantially revised in the wake of an internal discussion here at the FT…
Close readers will recall that just earlier this week we were pondering the case of one Richard Usher, formerly chief FX dealer for JP Morgan in London. His mangled remains were found under the proverbial publicity bus that is the official regulatory investigation into the supposed fixing of the daily WM/Reuters forex price fix, which is currently underway on both sides of the Atlantic. It seemed a shame to us that someone had been executed, professionally, for simply being in possession of an alleged Skype chat, therein containing some colourful banter. Especially when no evidence of said Skype chat had yet been presented.
It looked to us like someone, almost certainly in regulatory circles, was trading Usher’s name for political gain.
But now we’re confused. Read more
He’s dead, of course, professionally. Former chief FX dealer for JP Morgan in London, Richard Usher. Bloomberg has the glee:
…wrote instant messages while he was at Royal Bank of Scotland Group Plc (RBS) that U.K. regulators are scrutinizing as part of their investigation of alleged currency manipulation, two people with knowledge of the matter said.
Some scumbag correspondence from email@example.com…
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