HMT consults on AML supervisory regime
The UK government is consulting on a new anti-money laundering and counter-terrorism financing (AML/CFT) supervisory regime as required by the Economic Crime Plan (2023-2026).
The consultation sets out the objectives of the reform and four potential models to achieve those objectives.
The objectives are:
- Supervisory effectiveness;
- Improved system coordination; and
And the four models are:
- Model 1: OPBAS+ The first potential model would involve no structural change to the regime with OPBAS (Office for Professional Body Anti-Money Laundering Supervision) given some enhanced powers.
- Model 2: PBS Consolidation Model 2 would likely see either two or six PBSs (Professional Body Supervisors) retain responsibility for AML/CTF supervision.
- Model 3: Single Professional Services Supervisor (SPSS). The third model would see a single body supervise all legal and accountancy sector firms for AML/CTF. It may also supervise some or all of the wider sectors currently supervised by HMRC.
- Model 4: Single Anti-Money Laundering Supervisor (SAS) Under this model, all AML/CTF supervision in the UK would be undertaken by a single public body.
The closing date for comments on 30th September.
FCA identifies improvements for general insurance
The FCA published a review of the general insurance sector on the back of a Dear CEO letter last December and subsequently several survey questions.
The questions were intended to establish how firms were:
- providing appropriate support to customers in financial difficulty
- ensuring consumers get access to fair value products
- ensuring claims are handled promptly and fairly
A number of failings have been identified including:
- Issues around claims handling;
- Inconsistency around identifying financially vulnerable customers
- Inability to monitor customer outcomes; and
- Offering a price lower than fair market value in the event of a motor vehicle write-off.
The report provides good practice tips as well as next steps with the approaching go-live date of the FCA’s new Consumer Duty.
PS23/9 on insurance guidance for customers facing financial difficulties
Also published today by the FCA is Policy Statement 23/9 Finalised insurance guidance on supporting customers in financial difficulty. The PS provides new guidance which comes into effect on 31 July 2023. Hence firms should review their policies and procedures in line with the PS before that date.
The guidance includes amendments to:
• Clarify that the guidance does not set expectations in relation to contracts of large risks distributed to commercial customers.
• Include a provision setting out that the options available to, and the level of support provided by, firms to achieve the intended outcomes under the guidance will vary. This will depend on the nature of the firm’s relationship with the customer, the firm’s role in the distribution chain, the type and characteristics of the customer and type of product.
• Include a provision setting out that firms should consider whether, in the particular circumstances, it would be appropriate to refer the customer to another firm in the distribution chain who is in a better position to support the customer.
SEC charges two with Ponzi fraud
Robert D Christensen and Anthony M Matic, along with several companies under their control, have been charged by the Securities and Exchange Commission (SEC) for operating a Ponzi-like scheme and deceiving investors who invested more than $10 million in promissory notes. The SEC alleges that Christensen and Matic used multiple entities they established, including Foresee Inc., The Commission PDX LLC, The Policy PDX LLC, and Innings 150 LLC, to raise funds from retail investors, including retirees, by claiming to invest in real estate.
Between January 2018 and September 2022, Christensen and Matic allegedly sold unregistered promissory notes to investors, promising high interest rates ranging from nine to 15 percent, along with the return of the principal within a few months. However, the SEC claims that the defendants lacked the ability to fulfill these promises within the specified timeframes. Instead, they relied on new investments to pay off earlier investors. Furthermore, the complaint accuses Christensen and Matic of misusing investor funds for personal expenses, such as holidays, gifts, casino trips, massages, a whiskey club membership, and cryotherapy, without authorisation or disclosure.
PRA issues new CP on review of rules
Under the Financial Services and Markets Act 2023 (FSM Act), the Prudential Regulation Authority (PRA) will take on wider rule-making responsibilities in areas that were previously covered by retained EU law. This new consultation paper sets out the PRA’s proposed approach to reviewing its rules as required by the FSM Act
Comments are requested by 29 September 2023.
CFTC creates two new task forces
The Commodity Futures Trading Commission’s Division of Enforcement has announced two new task forces. The Cybersecurity and Emerging Technologies Task Force will address cybersecurity issues and other concerns related to emerging technologies (including artificial intelligence). The Environmental Fraud Task Force will combat environmental fraud and misconduct in derivatives and relevant spot markets. The task forces are comprised of attorneys and investigators across different offices within the Enforcement Division, who will prosecute cases, serve as subject matter experts, and coordinate efforts with the CFTC’s other divisions and offices.
A selected summary of key developments for regulated financial institutions
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