January 18, 2021

Volume XI, Number 18


January 15, 2021

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Financial Conduct Authority UK Weekly Update, December 4, 2020

FCA Proposes Fees for SMCR Changes and Newly-Authorized Firms

On November 19, the UK’s Financial Conduct Authority (FCA) published a consultation paper proposing an increase to application fees paid by new businesses seeking its authorization and application changes made under the Senior Managers Certification Regime (SMCR) (the Consultation Paper).

In the Consultation Paper, the FCA proposes to increase fees for straightforward applications from £1,500 to £2,500 and for moderately complex ones from £5,000 to £10,000 for newly-authorized firms. The FCA states it would help “redress the balance of cost recovery” away from existing fee-payers and recover further monies towards the total cost of authorizations.

The FCA also proposes to introduce fees for changes in control and applications and charge firms for changes made to its personnel under the SMCR. According to the FCA, these fees would compensate itself for the amount of work undertaken when approving applications.

Furthermore, the FCA is looking to introduce a £2,500 fee for claims management companies (CMCs) that apply for permission to seek out people who want to make a claim. These companies act as lead generators, which puts these “lower risk” CMCs in the same bracket as financial advisers and mortgage brokers. The FCA clarifies that the new fee does not apply to lead generators who seek the higher risk permission of ‘advice, investigation or representation.’

Application fees were last reviewed by the FCA in 2014.

The Consultation Paper is available here.

FCA Launches Data on Directory Persons on Financial Services Register

On November 23, the UK’s Financial Conduct Authority (FCA) updated its webpage confirming that data on certified and assessed persons (Directory Persons) submitted by dual-regulated firms under the Senior Managers and Certification Regime (SM&CR) is now live on the Financial Services Register (FS Register) (the Webpage). On the Webpage, the FCA reiterates that solo-regulated firms are to submit their data on Directory Persons via the FCA’s online portal — ‘Connect’ by March 31, 2021 using the single-entry submission form. Solo-regulated firms that wish to use the multiple entry submission form or that would like their data to appear from December can apply (see the October 16, 2020 Edition of Corporate & Finance Weekly Digest for further details.)

Under the SM&CR, data on Directory Persons will operate alongside the FS Register, and information will be made public on key individuals in SM&CR firms that carry out roles which are not pre-approved by the FCA.

The Webpage is available here.

FCA Publishes Draft Transitional Direction for Share Trading Obligation Under MiFIR

On December 2, the UK’s Financial Conduct Authority (FCA) published a draft transitional direction alongside an explanatory note, for share trading obligation under the Markets in Financial Instruments Regulation (600/2014) (MiFIR) in preparation for the end of the Brexit transition period (the Direction).

The Direction will allow UK firms to continue trading all shares on EU trading venues and systematic internalisers (SIs), if they choose to do so and where the regulatory status of those venues and SIs permits such activity (see the November 6, 2020 edition of Corporate & Financial Weekly Digest). The FCA hopes the Direction will mitigate the compliance disruption that may arise with onshored obligations.

The Direction will take effect following the end of the transition period at 23:00 on December 31 under Part 7 of the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (SI 2019/632) and may be subject to amendments or revocation.

The FCA consulted with HM Treasury, the Bank of England and the Prudential Regulation Authority to draft the Direction.

The Direction is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 339



About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...