CUBE RegNews:
3^rd March

Bank of England ticks off LME and announces supervisory action

In a news release, the BoE has announced supervisory action against London Metal Exchange.

 In April 2022, the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), and the Bank of England (the Bank) issued a joint statement regarding the London Metal Exchange’s (LME) decision to suspend trading on its nickel market on 8 March 2022 and cancel trades. This in turn resulted in a cessation of clearing of new nickel trades at LME Clear during the period that trading of nickel was suspended on the LME. The subsequent market disruption undermined confidence in the functioning of the nickel market.

The Bank reviewed the operation of LME Clear during the period following the nickel events to determine whether lessons should be learned in relation to LME Clear’s governance and risk management. The outcome pointed to several shortcomings across LME Clear’s governance, management and risk management capabilities. In response, LME Clear will need to strengthen its governance arrangements, increase independence in management and governance at the CCP, and improve on its wider risk management.

EIOPA consults on IORP II directive

The European Insurance and Occupational Pensions Authority (EIOPA) has today a public consultation on draft technical advice for the review of the IORP II Directive (Institutions for Occupational Retirement Provision).

The draft advice is given in response to a call for advice from the European Commission. EIOPA will provide its final advice in October 2023.

The consultation covers the following areas:

• Governance and prudential standards
• Cross-border activities and transfers
• Information to members and beneficiaries and other business conduct requirements
• Shift from defined benefit to defined contributions
• Sustainability
• Diversity and inclusion

Comments are required by 25^th May.

OFAC issues alert regarding false payment requests

The US Office of Foreign Assets Control (OFAC) has issued a warning against false demands for payments seemingly emanating from OFAC itself.  In the alert,  OFAC notes: “OFAC does not collect, demand, or request this type of payment from members of the public. You should not share any personal or confidential information, such as account information, with, nor make any payments to, any person purporting to represent OFAC in this way.”