PRA consultation on margin requirements
The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have issued a joint consultation which proposes extending the temporary exemptions for single-stock equity options and index options from the UK bilateral margining requirements from 4 January 2024 until 4 January 2026. The paper also sets out the PRA’s and the FCA’s proposed approach to model pre-approval in relation to bilateral initial margin models.
Of relevance to banks, building societies, and PRA-designated investment firms in scope of the margin requirements under UK European Market Infrastructure Regulation (EMIR), as well as all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR (FCA firms), the consultation process closes on 18th October.
EBA to collect ESG data
The European Banking Authority (EBA) announced its intention to collect, temporarily, environmental, social and governance (ESG) data from to help set up a risk monitoring framework.
The collection process will provide competent authorities and the EBA with the necessary data and tools to fulfill monitoring functions and ESG-related mandates by collecting the information that is already available to institutions as part of their Pillar 3 disclosure obligations with respect to ESG risks.
The collection will be discontinued once a supervisory reporting framework on ESG risks is in place. The first data is due to be submitted on 31st December 2023.
SEC charges Legendary Partners and founder Scott L Snyder with fraud
California-based Legendary Partners, LLC and its founder, Scott L. Snyder, have been hit with charges by the US Securities and Exchange Commission (SEC) for orchestrating a nationwide offering fraud that spanned from April 2018 to December 2021.
The SEC’s complaint alleges that the fraud involved raising approximately $391,000 from unsuspecting investors, who were lured in by the promise of investing in a start-up company focused on producing a reality-television series showcasing the refurbishment of exotic and luxury vehicles that had been damaged.
According to the complaint, Legendary Partners and Snyder employed a deceptive tactic to solicit investors by using “cold callers,” with Snyder himself often disguising his true identity under the alias “Bill Miller.” These cold callers targeted elderly investors and presented them with baseless and misleading profit projections, cleverly designed to entice them into investing.
The SEC also alleged that Snyder intentionally redirected funds from several investors who had intended to invest in unrelated offerings to Legendary Partners. Instead of investing the funds as promised, Snyder convinced these investors to deposit their money into accounts controlled by Legendary Partners, only to misappropriate the funds for personal gain.
In response to the SEC’s charges, Legendary Partners and Snyder have agreed to a proposed settlement which would result in a permanent injunction against both parties, barring them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5.
It would hold Snyder accountable for $42,636 in disgorgement and $9,956 in prejudgment interest, along with a civil penalty of $50,000. Legendary Partners would have to pay $184,706 in disgorgement, $43,130 in prejudgment interest, and a civil penalty of $184,706.
A selected summary of key developments for regulated financial institutions
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