European Banking Authority Consults on Material Risk Takers for Remuneration Purposes
On May 21, the European Banking Authority (EBA) took into account the results of a 2012 survey and published a consultation on draft regulatory technical standards on criteria identifying categories of staff whose professional activities have a material impact on a financial institution's risk profile under the proposed CRD IV Directive. The draft standards are required under Article 90(2) of the proposed Directive and set out an identification process, as well as standard qualitative and quantitative criteria for characterizing material risk takers.
Comments can be made on the consultation paper until August 21, and the draft standards are due for submission to the European Commission by the end of March 2014. Consultation Paper.
FCA Fines J.P. Morgan Over £3.076M Over Systems and Control Failings
On May 23, the new UK conduct regulator, the Financial Conduct Authority (FCA), fined J.P. Morgan for failings in its wealth management business that persisted for two years until 2012. Specifically, the bank failed to retain and update information on client objectives and risk tolerance.
The investigation, which originally began under the FSA, found that there had been a serious risk of inappropriate investments being made on behalf of clients, as there had been no systems in place to monitor whether appropriate advice had been given. However, the investigation was unable to find any actual detriment to clients.
The fine levied reflects a 30% discount for cooperation and early settlement by J.P. Morgan. FCA Notice.