Latest news with #financial regulation
Reuters
5 days ago
- Business
- Reuters
UK financial watchdog fines H2O's former deputy CEO, places ban
July 25 (Reuters) - Britain's Financial Conduct Authority on Friday imposed a fine of 1 million pounds ($1.34 million) on Jean-Noel Alba, the former deputy CEO of French asset manager H2O, and banned him from the financial services industry following his conduct during an investigation. H2O in 2019 became the subject of market and regulatory concern over its investments in illiquid bonds issued by several companies related to German entrepreneur Lars Windhorst, who owns investment firm Tennor. FCA said that during its investigation, Alba provided false and misleading statements and documentation to the regulator. "Alba asked junior colleagues to create minutes, including records and minutes of committees, where no formal meetings had taken place," the watchdog said. "Alba also provided due diligence materials, such as investment research, to the FCA that had been created years after the investments had been made, when he had claimed they were produced at the time." In August 2024, H2O voluntarily offered to pay 250 million euros to investors trapped in funds since 2020 and said it would shut its UK regulated operations, escaping a fine for failing to make sufficient checks on risky investments. ($1 = 0.7448 pounds)
South China Morning Post
23-07-2025
- Business
- South China Morning Post
Temper ‘excessive' stablecoin excitement, Hong Kong Monetary Authority chief warns
For the second time in a month, Hong Kong's de facto central bank sought to temper excitement surrounding stablecoins, warning against overly vague concepts and operations, stock speculation and money-laundering risks. Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), said in a blog post on Wednesday that efforts to cool down discussions about stablecoins in the market and society over the past month required some strengthening. 'We need to guard against excessive market and public opinion speculation,' he said. Hong Kong's stablecoin ordinance, which passed in late May and will take effect on August 1, requires issuers to obtain a licence from the HKMA and meet strict requirements on reserve assets and other factors. 'Dozens of institutions' got in touch with the HKMA either wanting to apply for licences or explore possibilities, Yue said. Next week, the HKMA will set out arrangements for accepting and processing licence applications. It will also aim to publish the results of two consultations around the same time: on guidelines for supervising licensed stablecoin issuers and for anti-money-laundering and counterterrorism financing requirements for regulated stablecoin activities. Without naming names, Yue said that some of the institutions considering stablecoins failed to propose feasible, specific solutions and implementation plans, or lacked risk-management awareness and ability. 'Many of them are still at the conceptual stage, such as proposing to improve cross-border payment efficiency, support the development of Web 3.0 [or] improve the efficiency of the foreign-exchange market, but lack practical application scenarios,' he said. A 'bubble' could be forming, which deserved more attention, as some listed companies' stock prices and trading volumes surged simply because they claimed an intention to develop stablecoin operations, 'regardless of whether their main business is related to stablecoins or digital assets', he added.
Bloomberg
23-07-2025
- Business
- Bloomberg
Morgan Stanley Faces Finra Probe on Client-Vetting, WSJ Says
Morgan Stanley is being probed by the Financial Industry Regulatory Authority over its vetting of clients for risk of money laundering, the Wall Street Journal reported. The scrutiny focuses on the US bank's clients, risk ranking and other practices from Oct. 2021 through Sept. 2004, the report said, citing unidentified people familiar with the matter. Morgan Stanley is already facing potential fines from federal investigations into its anti-money laundering practices, the report said.
The Independent
17-07-2025
- Business
- The Independent
Buy now, pay later consumer protections proposed by Financial Conduct Authority
Buy now, pay later providers will have to check that people can afford to repay their loans and offer support if they get into financial difficulty under a consultation put forward by the Financial Conduct Authority (FCA). Borrowers will also be able to complain to the Financial Ombudsman Service if something goes wrong. The rules, giving consumers more transparency over what this type of borrowing involves, would take effect when buy now, pay later (BNPL) comes under the FCA's remit next year. The new oversight by the FCA would mean that BNPL borrowers will have key protections that already exist for other types of lending. The FCA also oversees the Consumer Duty, which requires financial firms to put consumers at the heart of what they do, including when designing products and communicating with their customers. Sarah Pritchard, deputy chief executive at the FCA, said: 'We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected. 'Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong and access to the right information to make informed decisions. 'We're mainly relying on existing requirements, including the Consumer Duty, rather than proposing to make lots of new rules, supporting growth and allowing firms to innovate.' BNPL products are a way for people to spread the costs of purchases without paying interest. BNPL options regularly pop up at online checkouts. But concerns have been raised that some people could end up taking out loans that they cannot afford to pay back on time, incurring charges. According to the FCA's research, one in five (20%) UK adults – equating to 10.9 million – had used BNPL at least once in the 12 months to May 2024, up from 17% in 2022. In May 2024, 2% of UK adults (equating to 1.1 million) had £500 or more outstanding unregulated BNPL debt, and 11% of UK adults (5.3 million) had £50 or more outstanding, the regulator found. The FCA's consultation is open for feedback until September 26 2025. A temporary permissions regime will be open for firms to register two months before the regime comes into force on July 15 2026. Firms will then have six months from the date the regime comes into force to apply for full authorisation. BNPL is a broad term which can include some credit agreements that are already regulated, the FCA said. Its new proposals relate to unregulated BNPL agreements, referred to as deferred payment credit (DPC). The Government has made legislation to bring DPC products under FCA regulation. DPC refers to unregulated interest-free credit, which finances the purchase of goods or services and that is repayable in 12 or fewer instalments within 12 months or less. Lenders who only provide DPC do not currently need to be FCA authorised, leading to concerns that some borrowers may not be receiving enough information about what credit agreements involve. Alison Walters, interim director of consumer finance at the FCA, told the PA news agency: 'Our proposals are aimed at ensuring that consumers get good consumer outcomes and that there is an appropriate degree of consumer protection. 'And by that, we mean that consumers get the right information, in the right way, at the right time, so that they can make an informed decision about their buy now, pay later lending.' She continued: 'What we're asking in our rules is for firms to carry out an affordability check, to ensure that consumers are able to pay. And if they get into financial difficulty to provide them with an appropriate level of support. 'We also want them to give more information in relation to late fees, consequences if they miss a payment, and impacts, for example, if it may affect credit ratings. 'And also information about their withdrawal and cancellation rights.' She added: 'If something goes wrong, consumers will be able to refer their complaint to the Financial Ombudsman Service.' Ms Walters said that in terms of supporting those in financial difficulty: 'Under our existing rules, firms can offer forbearance to consumers if they get into financial difficulty.' She said that could include changes in the payment plan and people can also be signposted to debt advice or other support mechanisms. Ms Walters added that under the new rules 'we still think that this market will be viable and profitable'. She pointed out that the BNPL market has already grown in size and popularity. According to the regulator, DPC lending has grown from £0.06 billion in 2017 to more than £13 billion in 2024. A Klarna spokesperson said: 'After five years of constructive work with HMT (HM Treasury), we're entering the home straight to make BNPL regulation a reality – a major win for UK consumers. 'We're looking forward to working with the FCA on rules that protect consumers while keeping choice and innovation at the heart of the UK credit market.' A spokesperson at BNPL provider Clearpay said: 'We will support the FCA as it consults on and finalises its specific rules for the sector.' The spokesperson said regulation 'will establish a consistent operating environment and clear compliance standards for all providers,' adding: 'Clearpay research highlighted that nearly half of UK adults (48%) are more likely to use BNPL once regulation is passed, and with 71% believing that it is important for BNPL to be subject to UK financial legislation, today's announcement will help foster trust among consumers. 'It will also create a more sustainable foundation for the future of BNPL as it continues to grow as an everyday payment option for consumers.' Vikki Brownridge, chief executive of StepChange Debt Charity, said: 'It's incredibly reassuring to see the FCA's consultation on its proposed approach to regulating buy now, pay later.' She added: 'Whilst BNPL can be a useful budgeting tool, it can deepen debt problems, and it is important struggling consumers are afforded the same level of protection as for other forms of credit. 'Bringing BNPL firms in line with the wider credit market, when regulation begins next year, will provide an added layer of protections for consumers, a much-needed change as StepChange polling found that BNPL users are twice as likely as all credit users to borrow to cover essential bills, and our research also found that BNPL is now as common as using an overdraft amongst UK adults.' Vix Leyton, a consumer expert at app ThinkMoney, said BNPL 'can be a really useful tool, particularly when life throws you an unforeseen cost that drives a wrecking ball through your budget. 'But while spreading the cost can take the pressure off, it's temporary relief if it's not done responsibly and mindfully.' She added: 'Proper affordability checks, in line with other credit products, are vital to stop people unintentionally kicking the financial can down the road, as is making sure that those in financially vulnerable positions understand the consequences of missed payments.' Rocio Concha, Which? director of policy and advocacy, said: 'Buy now, pay later can be a really convenient way to spread the cost of items, but because it is not yet regulated, it hasn't come without risk to consumers. ' Regulation will mean that consumers will be subject to affordability checks to ensure responsible lending as well as making sure they are given sufficient information about the credit they are taking on and the risk of falling into debt.'
Finextra
11-06-2025
- Business
- Finextra
Industry associations highlight cybersecurity risks at US regulatory agencies
Four industry trade associations have called for significant reforms to how federal financial regulators handle sensitive data following a data breach at the Office of the Comproller of the Currency that exposed over 148,000 private correspondences containing sensitive supervisory information about US financial institutions. 0 In a letter addressed to Treasury Secretary Scott Bessent, The Bank Policy Institute, American Bankers Association, MFA and Sifma say that growing threats from hostile nation-states targeting US critical infrastructure serve as a reminder of the urgency to address vulnerabilities. 'Government agencies are increasingly the target of persistent and sophisticated nation-state attacks that could disrupt financial markets and our economy,' the organizations wrote. 'It is imperative that federal regulators recognize that they are equally a target of malicious actors and implement the same or substantially similar cybersecurity and incident response practices that they expect financial institutions to maintain.' Financial institutions are legally required to share sensitive, proprietary and non-public information with their regulators as part of the supervisory process. This information can range from capital and liquidity management to cybersecurity protocols. However, centralizing large amounts of data can create a prime target for illicit actors seeking to harm US economic security, says the organisations. They point out that over the past two years, both the Treasury Department and the OCC have suffered significant cyber incidents. At the OCC, hackers were at work inside its systems for over a year-and-a-half before the intrusion were discovered. Immediately after the breach was reported both JPMorgan Chase and Bank of New York Mellon scaled back electronic information sharing with the agency. To mitigate risk and prevent similar problems in the future, the groups are urging the Treasury to hold federal agencies to the same security and data protection standards as private companies. They want to limit data collection to only what is necessary and avoid centralisation of sensitive data, allowing companies to maintain control and access to their data. The letter states: 'As firms are required to share non-public, highly sensitive information with regulators as part of the supervisory process, compromises at regulatory agencies could expose institutions' vulnerabilities and business information to malicious actors, putting them at strategic disadvantage.'
