UK Prosecution Authorities Launch Consultation on Deferred Prosecution Agreements (DPAs)
On June 27, the Serious Fraud Office and Director of Public Prosecutions launched a consultation on DPAs, which are being introduced under the Crime and Courts Act 2013 in February 2014.
DPAs are US-style voluntary agreements between prosecutors and companies whereby a company is charged with a criminal offense (e.g. bribery or fraud) but proceedings are automatically suspended provided the company comes to an agreement with the prosecutor, usually involving a financial penalty, payment of compensation and/or co-operation with future prosecutions of individuals. Consultation Document.
Italian Supreme Court Extends the Scope of Consumer Protection Provisions Under the Italian Financial Law
On June 3, the Joined Chambers of the Italian Supreme Court issued a decision concerning the obligation for banks and financial intermediaries, engaging in "door-to-door" selling of financial instruments, to provide a withdrawal right (jus poenitendi) to be exercised by retail clients within seven days of the signing of the relevant contract.
The decision extends such obligation, originally provided by Section 30, paragraph 6, of the Italian Financial Law (namely, Legislative Decree no. 58 of February 24, 1998, as amended) only in relation to the placement of financial instruments and portfolio management contracts entered into outside the registered office/place of business, also to other types of financial services.
The underlying rationale is to protect retail clients from the risk of being taken by surprise "when their order is the result of a solicitation put in place by the intermediary out of its registered office," regardless of the type of investment service that has led to such an operation. Judgment (in Italian only).
Council of the EU Announces Political Agreement on the Market Abuse Regulation (MAR)
On June 26, following long running negotiations, the Council of the EU announced a compromise with the European Parliament on the proposed MAR.
The MAR proposal and the European Commission's proposed Directive on criminal sanctions for insider dealing and market manipulation (CSMAD) will together revise and replace the current Market Abuse Directive. Inter alia, the proposals broaden the scope of the regulatory framework to cover new trading exchanges and over-the-counter trading. Press Release.
UK Financial Policy Committee (FPC) Issues New Recommendations on Banks
In its latest Financial Stability Report, the FPC (a committee of the Bank of England) set out recommendations for the UK's new regulator - the Prudential Regulation Authority - to improve the stability of the UK banking sector, including:
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using the Basel III liquidity coverage ratio to assess liquidity;
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increasing the consistency and comparability of Pillar 3 disclosures; and
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calculating regulatory capital ratios under end-point Basel III definitions using the standardised approach to credit risk. Report.
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