Regulatory
Complaints scheme for non-FSMA complaints about the FSA
On 17 August 2012, the FSA published a new webpage relating to complaints against it under legislation other than the Financial Services and Markets Act 2000 (FSMA).
FSCP makes six recommendations for new Financial Conduct Authority
In a press release the Financial Services Consumer Panel made six recommendations that it believes are essential for the new FCA. These include swifter action, better use of market and consumer intelligence and using the full suite of powers available to it.
FSA Implementation Assumptions
The FSA has updated its implementation assumptions for the Solvency II Directive to reflect the new timetable in the short amending Directive adopted on 3 July 2012. This means that:
- 30 June 2013 responsibilities of supervisors and EIOPA will be switched on
- 1 January 2014 Solvency II requirements will be switched on for firms
FSA consults on revised client money rules for insurance intermediaries
On 28 August 2012, the FSA published a consultation paper (CP12/20) on its review of the client money rules for insurance intermediaries, currently set out in chapter 5 of its Client Assets sourcebook (CASS 5). Comments on the consultation are invited by 30 November 2012. The FSA plans to publish a policy statement containing final rules in the second quarter of 2013.
Europe
Lawyer-linguists: making EU legislation mean the same in all languages
Article from the European Parliament on how the EU ensures the rules mean the same across the whole bloc.
Sanctions
Cancellation of cover – a complex choice
The sanctions in place against Syria have been in the headlines recently, after the Russian-operated cargo ship MV Alaed, en route from Kaliningrad to Syria and reported to be carrying military helicopters, first halted off the coast of Scotland and then turned back after its insurance cover was withdrawn by the Standard Club.
Sanctions microsite
To help you keep up to date with the latest sanctions developments that may affect your business we have developed a dedicated sanctions microsite where you will find all our sanctions articles and events and useful information relating to Iran, Libya, North Korea, Syria, Cuba and Burma/Myanmar.
Corporate
Induction of directors
The Institute of Chartered Secretaries and Administrators has published an updated version of its guidance note on the induction of directors, to advise organisations on the topics and documents they should consider when designing an induction programme for newly appointed directors.
Controlled foreign companies regime
On 6 August 2012, HM Treasury published a draft of the Controlled Foreign Companies (Excluded Territories) Regulations 2012. As well as listing the 103 specified excluded territories, the regulations modify the intellectual property and income conditions that must be met for the ETE to apply for CFCs resident in Australia, Canada, France, Germany, Japan and the USA. Comments on the draft regulations are invited by 28 September 2012. The regulations will come into force on 1 January 2013 and have effect for accounting periods of CFCs beginning on or after 1 January 2013.
More flexibility for insurance funds utilisation - China
On 16 July 2012, China Insurance Regulatory Commission (CIRC) issued the Notice on Issues over Investment of Insurance Funds in Private Equity and Real Estate ("Notice") to insurance companies and insurance asset management companies. The Notice was published on the CIRC's website on 25 July 2012.
Global news in brief from the industry
- HM Treasury has published a discussion paper outlining initial thinking on the review of the London Interbank Offered Rate (LIBOR) being undertaken by Martin Wheatley, Chief Executive-designate of the Financial Conduct Authority. Comments on the discussion paper are requested by 7 September 2012. Read more
- The FSA announced that Tracey McDermott has been appointment as Director of the FSA's Enforcement and Financial Crime Division (EFCD). Ms McDermott has been Acting Director of EFCD since April 2011. The internal e-mail explains that the permanent appointment follows her impressive work on credible deterrence and tackling financial crime.
- On 15 August 2012, the Financial Ombudsman Service (FOS) published issue 104 of ombudsman news.
Cases and updates
We produce regular weekly updates which are aimed at keeping you up to speed and informed of the latest developments in case law and regulatory changes relevant to your practice.
Insurance and Reinsurance
21st August 2012 – Read update
AXA Insurance v Thermonex - A case on whether a claim fell within the scope of a public liability policy and the requirements of a notification condition.
The claimant insurer sought a declaration that it was not liable to the defendant insured (an English company). The insured had taken out a Commercial Combined insurance policy with the insurer (which included a public liability ("PL") section). The insured designed and installed some basements in a development in Ireland. The main contractor (an Irish company) commenced proceedings against the insured in Ireland for breach of contract and negligence arising out of its work. After the insured went into liquidation the main contractor advised the insurer that it intended to join it to the Irish proceedings (pursuant to the terms of an Irish statute which is the equivalent of the Third Parties (Rights against Insurers) Act 1930). The insurer therefore sought a declaration from the English courts that it was not liable under the policy.
Peaktone v Joddress - A Clyde & Co case on whether an action brought after a company has been dissolved can be retrospectively validated when the company is restored to the register. The defendant company was struck off the Register of Companies and dissolved pursuant to section 652 of the Companies Act 1985 (thus losing its legal personality). The claimant then commenced proceedings against it and obtained an order from the Companies Court restoring the company to the Register (pursuant to section 1029 of the Companies Act 2006).
Global Maritime Investments v STX Pan Ocean - Contract interpretation and the use of background material. This case involved an appeal from an arbitration award. One of the issues was whether the arbitrators had erred, when interpreting the contract in dispute, by taking into account (as part of the relevant background) a circular drafted by an industry body some 20 years prior to the contract. Lord Hoffmann in ICS v West Bromwich [1998] said that interpretation was the ascertainment of "the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract". One of the parties sought to rely on dictum in Scottish Power v Britoil [1997] that any material relied on should be limited to "what the parties had in mind and what was going on around them at the time when they were making the contract". Clarke J said that that dictum was not a qualification of Lord Hoffmann's observation - "the parties can reasonably be expected by their counterparties to know that which was reasonably available to them". Hence, reference could be made to the circular.
Financial services regulatory
17th August 2012 – Read update
This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FSA, the UKLA, the Upper Tribunal, the Financial Ombudsman Service and the London Stock Exchange over the past week, with links to the full documents where these are available.
14 August: Market Watch Issue No.42. The FSA has published Issue 42 of its Market Watch Newsletter. The newsletter focuses on the EU Short Selling Regulation (EU No.236/2012) which comes into effect on 1 November 2012.
15 August: Ombudsman News - Issue 104. The FOS has published Issue 104 of its publication, Ombudsman News. In this issue, in an article entitled 'Changing times, changing service', the lead ombudsman, Jane Hingston talks about an "experimental" casework project. The newsletter also discusses several case studies regarding PPI policies and there is a Q&A section featuring questions that businesses and advice workers have raised recently with the ombudsman's technical advice desk.
For all our newsletters, legal updates, articles and events please see here.
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