• On 29 November 2024, the Economic Secretary, Tulip Siddiq, gave a speech at the City UK National Conference. This set out the Government’s priorities for the financial services sector in light of their stated growth mission. The speech also emphasised the Government’s view that there is an opportunity for more responsible risk-taking across the economy. Ms Siddiq also noted that they are consulting on abolishing the current Certification Regime and replacing it with a more proportionate approach that will reduce costs for businesses.

Keynote speech: The City UK National Conference 2024 - GOV.UK 

• On 29 November 2024, the FCA issued a direction allowing firms subject to the UK Derivatives Trading Obligation (DTO), which trade with EU clients who are subject to the EU DTO, to continue to conclude those trades on EU trading venues.

FCA Direction for the DTO under Article 28 UK MiFIR  

FCA Explanatory note for the direction for the DTO under Article 28a(6) MiFIR 

• On 28 November 2024, the FCA issued a second consultation paper on publicising enforcement investigations. Following significant industry backlash to the original proposals, the FCA has provided further detail on how they would work in practice. The House of Lords Financial Services Regulation Committee has also published a letter dated 27 November 2024 from Nikhil Rathi, Chief Executive of the FCA, in response to questions raised by the Committee on the proposals.

CP24/2, Part 2: Greater transparency of our enforcement investigations 

Letter from Nikhil Rathi regarding the FCA’s consultation paper CP24/2 (Part 2) 

• On 27 November 2024, the FCA published a consultation paper (CP24/24) on the MiFID Organisational Regulation (UK Commission Delegated Regulation (EU) 2017/565). CP24/24 proposes to transfer the firm-facing requirements of the MiFID Org Regulation into the FCA Handbook. The FCA is also seeking feedback on streamlining the conduct and organisational rules in the FCA Handbook which are derived from different EU Directives and include common operational requirements. Firms have until 28 February 2025 to respond to the questions in respect of MiFID Org and until 28 March 2025 for the additional discussion questions on amendments to EU derived organisational and conduct rules. 

CP24/24: The MiFID Organisational Regulation

• On 26 November 2024, the Government published the Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024. These extend the temporary marketing permissions regime for a further year, to allow sufficient time for funds to enter the OFR.

The Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024 

• On 21 November 2024, the Government published the Consumer Composite Investments (Designated Activities) Regulations 2024 (SI 2024/1198). These set out the framework for the regulation of consumer composite investments (CCIs) and will replace existing law governing packaged retail and insurance-based investment products (PRIIPs), as set out in the UK PRIIPs Regulation. These will come into force when the UK PRIIPs Regulation is revoked. 

The Consumer Composite Investments (Designated Activities) Regulations 2024

• On 21 November 2024, the Government published the Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024 (SI 2024/1204). The Regulations make amendments to the UK PRIIPS Regulation and the UK MiFID Org Regulation in order to exempt closed-ended UK listed investment funds from the requirements to produce a KID or MiFID costs and charges information.

The Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024

• On 19 November 2024, HM Treasury updated its Money Laundering Advisory Notice: High Risk Third Countries. This includes changes to the list of high-risk third countries in Schedule 3ZA of the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692). Changes included the additions of Algeria, Angola, Cote d'Ivoire and Lebanon to the list. 

Money Laundering Advisory Notice: November 2024 (HTML) - GOV.UK

• On 15 November 2024, the FCA set out next steps following last year’s discussion paper on the Advice Guidance Boundary Review (DP23/5). The FCA has stated that it will focus on pensions first. The FCA has also issued a joint statement with the Information Commissioner’s Office and The Pensions Regulator for retail investment firms and pension providers to give firms greater clarity about communications they can make under the Consumer Duty that are compatible with UK data protection legislation.

Joint statement from the FCA, ICO and TPR for retail investment firms and pension providers | ICO

Advice Guidance Boundary Review: November 2024 update FCA 

Feedback: Advice Guidance Boundary Review | FCA 

• On 15 November 2024, the FCA and the Financial Ombudsman Service published a joint call for input on modernising the redress framework. Firms have until 30 January 2025 to respond.

Call for Input Modernising the Redress System 

• On 15 November 2024, the FCA published a discussion paper (DP24/2) setting out options for evolving the UK transaction reporting and instrument reference data requirements. The scope and content of the current regime are discussed including the possibility of extending the regime to UCITS and AIFMs which are CPMI firms. Firms have until 14 February 2025 to respond to the discussion paper.

DP24/2: Improving the UK transaction reporting regime 

• On 14 November 2024, Rachel Reeves, Chancellor of the Exchequer, delivered her first Mansion House speech. This speech highlighted in particular the Government’s focus on the pensions market and the use of pensions to invest in private capital and UK infrastructure. The Chancellor also identified sustainable finance as one of five priority growth opportunities and set out steps to develop a world-leading sustainable finance regulatory framework including (amongst others): consultation on the UK’s Green Taxonomy, draft legislation to regulated ESG ratings providers and a commitment to consult on mandating transition plans disclosures.

Mansion House 2024 speech – GOV.UK 

FCA statement on the Chancellor’s Mansion House speech | FCA

• On 14 November 2024, HM Treasury issued a consultation on a UK Green Taxonomy following the Green Technical Advisory Group’s work in developing a UK Green Taxonomy for financial and non-financial firms. We have written about the consultation here: The UK’s Green Taxonomy - Macfarlanes.
   
• On 6 November 2024, the Home Office published Guidance on the incoming corporate criminal offence of failure to prevent fraud and on the steps which organisations need to take to assist in establishing a statutory defence. The offence will come into force on 1 September 2025 and organisations have until then to implement reasonable prevention procedures. We have written about the new offence here: 

A new chapter: the UK’s Economic Crime and Corporate Transparency Act 2023 - Macfarlanes

Corporate liability for failure to prevent fraud – what you need to know - Macfarlanes

Guidance to organisations on the offence of failure to prevent fraud. 

• On 5 November 2024, the FCA published a consultation paper (CP24/21) on investment research payment optionality for fund managers. The FCA is proposing to extend the flexibility for payment for research which currently applies to MiFID firms to AIFMs and UCITS management companies. 

CP24/21: Investment research payment optionality for fund managers | FCA 

FCA enhances access to market data and investment research to support growth | FCA

• On 4 November 2024, the FCA released a statement on Project Guardian’s report on tokenisation in the asset management sector. Project Guardian is an international collaboration of industry and regulators, led by the Monetary Authority of Singapore, which explores the use of fund and asset tokenisation. The FCA has said that it will continue working with Project Guardian members and the sector to support the development and adoption of asset tokenisation. 

FCA welcomes Project Guardian’s first industry report on tokenisation | FCA   

Guardian Funds Framework

• On 22 November 2024, ESMA published its response to the European Commission's targeted consultation on macro-prudential policies for non-bank financial intermediaries. Recommendations relate to liquidity mismatches, money market funds and the use of leverage in AIFs and UCITS.

Response to the European Commission consultation on the review of the EU macro-prudential policy framework for NBFI

• On 14 November 2024, ESMA announced the launch of a data collection exercise, together with national competent authorities on costs linked to investments in AIFs and UCITS. The exercise will be a two-stage process involving both manufacturers and distributors of investment funds. 

ESMA is collecting data on costs linked to investments in AIFs and UCITS

• The International Organization of Securities Commissions (IOSCO) has published a statement on its revised liquidity risk management recommendations for investment funds. IOSCO has also published a consultation report on guidance for Open-ended Funds for Effective Implementation of the Recommendations for Liquidity Risk Management.

CR/06/2024 Revised Recommendations for Liquidity Risk Management for Collective Investment Schemes - Guidance Document

CR/07/2024 Guidance for Open-ended Funds for Effective Implementation of the Recommendations for Liquidity Risk Management