FRC’s Professional Oversight Board has published proposals with regard to the external monitoring of auditors of companies from outside the EU that have issued securities on the London Stock Exchange. These are designed to meet the requirements of the Statutory Audit Directive. In general they would not apply where the audit firm is already subject to an equivalent system of regulation in its home country. The focus is on auditors from countries that the EC has not recognised as having an equivalent system of regulation, or as having firm plans to introduce one. There are 301 such audit firms from 21 countries undertaking just over 40 relevant audits. Responses are required by 25 May 2012.

On 6 March 2012, ESMA organised a public hearing at its Paris office on draft technical standards on EMIR. An audio recording of the event is now available, via the following link.

Thomson Reuters has failed RIC marketing licence over proposed concessions in licensing of instrument codes. Joaquín Almunia competition director of the European Commission has said that a market test of the new measures had not delivered. "We have now reached a critical stage in this investigation. If no effective solution can be agreed upon, then we will have to draw the adequate conclusions." Thomson Reuters face fines of up to 10% of its turnover if if concessions are not reached.

Vince Cable has announced that the first ever UK Green Investment Bank will be based in Edinburgh and London. Its HQ will be located in Edinburgh, with the its main transaction team based in London).

OFT has published a press release stating that it has decided that Yes Loans Limited is unfit to hold a consumer credit licence, as are two associated businesses, Blue Sky Personal Finance Limited and Money Worries Limited. The decision to revoke the licences was taken in light of evidence that Yes Loans has failed to comply with CCA 1974 and associated regulations, and with requirements previously imposed by OFT. OFT found evidence that Yes Loans had engaged in unfair business practices, including: using high pressure sales tactics to persuade consumers to provide their debit or credit card details on the false premise that they were required for an identity and/or security check; deducting brokerage fees without making it clear that a fee was payable, and/or without the consumer's consent; failing to introduce some consumers to the product originally sought, frequently arranging short-term, high interest, loans instead; misleading consumers into believing it was a loan provider rather than a credit broker and treating customers poorly by not providing refunds in a timely manner. It is noted that, following OFT's investigation, Yes Loans made a number of changes to how it operates, including no longer 20 charging upfront fees. A number of other associated companies also surrendered or withdrew their consumer credit licences or applications, but that nevertheless the firm was unfit to hold a consumer credit licence.

The joint paper from the ESAs invites feedback on planned regulatory technical standards covering risk mitigation techniques for OTC derivatives not cleared by central counterparties. Responses are required by 2 April 2012. Following the consultation period, ESAs will prepare draft technical standards to be included in the consultation paper which will most likely be published in the summer of 2012. In addition, EBA has published a discussion paper on draft RTS on capital requirements for CCPs, which also requires responses by 2 April 2012. .(7/03/12) http://www.esma.europa.eu/system/files/jc_dp_2012_01.pdf; http://www.eba.europa.eu/cebs/media/aboutus/News%20and%20Communications/EBA-DP-2012-01--Draft-discussionpaper-on-RTS-on-Article-12-3-EMIR-.pdf

The EC has proposed the setting up of a European common regulatory framework for the institutions responsible for securities settlement, called Central Securities Depositories. The proposal contains the following key elements: - The settlement period will be harmonised and set at a maximum of two days after the trading day for the securities traded on stock exchanges or other regulated markets (currently two to three days are necessary for most securities transactions in Europe). Market participants that fail to deliver their securities on the agreed settlement date will be subject to penalties, and will have to buy those securities in the market and deliver them to their counterparties. - Issuers and investors will be required to keep an electronic record for virtually all securities, and to record them in CSDs if they are traded on stock exchanges or other regulated markets. - CSDs will have to comply with strict organisational, conduct of business and prudential requirements to ensure their viability and the protection of their users. They will also have to be authorised and supervised by their national competent authorities. - Authorised CSDs will be granted a 'passport' to provide their services in other Member States. - Users will be able to choose between all 30 CSDs in Europe. - CSDs in the EU will have access to any other CSDs or other market infrastructures such as trading venues or Central Counterparties (CCPs), whichever country they are based in. The proposal now passes to the European Parliament and the Council (Member States) for negotiation and adoption.

The report considers payday loans and commercial debt management companies, highlights shortcomings and areas of concern with regards to this industry and makes recommendations for future Government action. With regard to the regulation of consumer debt, the report urges the Government to outline a timetable and methodology for how and when a decision will be made on whether the power to transfer consumer credit from OFT to FCA is to be exercised within six months; that it should introduce higher licensing fees for higher-risk credit businesses; introduce a fast track procedure to suspend credit licences and give the regulator the power to ban “harmful” products. With regard to payday loans, it is suggested that the Government act to: limit the rolling over of payday loans and the switching between payday loans and the subsequent rolling over of loans; ensure payday providers record all of their transactions on a database and make clear that unless payday loan companies demonstrate a commitment to moving away from the continuous payment authority as the method for receiving payments, the new regulator will be asked to address this as a priority. In addition, the Government should provide the Committee with an update on the development of the industry codes of practice by the end of 2012. Recommendations on debt management, include the recommendation that up-front fees be phased out and regulate to ensure that companies publish the cost of their debt advice and outcomes. The report also criticises the Money Advice Service for its unclear business remit and over the CEO’s remuneration (“at a time of pay restraint we do not believe that the head of a comparatively small organisation should receive a salary £100,000 in excess of the Prime Minister. We look to the Government to raise this with the FSA as a priority”). (7/03/12) Business, Innovation and Skills Committee publishes report on debt management - News from Parliament - UK Parliament (NB: over 200 pages long

Further to Market Watch 40, which included the final guidance for reporting transactions in derivatives conducted through clearing platforms of derivatives markets (ISIN and Aii), FSA has now published this note confirming that, from 31 March 2012, firms must report transactions in flex derivatives contracts conducted through Eurex OTC by using the respective Aii code issued for those contracts.

Kinetic partners are to join forces with UnaVista London Stock Exchange Groups transaction reporting service in reaction to the latest FSA guidelines which place added importance of reporting transaction data.