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Welcome to Legal Shorts, a short briefing on some of the week’s developments in the financial services industry.

If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers.


Claire Cummings

020 7585 1406


Draft Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018 published by HM Treasury

HM Treasury recently published a draft version of the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018, together with an explanatory note. The purpose of the Regulations is to ensure that the regime established under the AIFMD for investment funds and their managers continues to operate effectively after Brexit. Among other things, the Regulations contain provisions that: (i) amend the definition of AIF; (ii) disapply the UK's National Private Placement Regime (NPPR) information and reporting requirements for funds that are recognised under FSMA for marketing to retail investors; (iii) set out the design and structure of a "temporary permissions regime" for AIFs and AIFMs; and (iv) ensure that a UK AIFM will only be required to report on portfolio companies and comply with the restrictions on asset stripping when it acquires control of a UK company, as opposed to an EU company. HM Treasury has published a draft version of the Regulations ahead of formally laying them before Parliament. It intends to lay the Regulations before Parliament in autumn 2018. The Regulations come into force on exit day.


FCA unveils guidance ahead of SMCR extension

The FCA issued recently issued a guidance consultation on the Senior Managers and Certification Regime (“SMCR”). SMCR will be extended to all FSMA authorised firms. The purpose of the guidance is to give FCA solo-regulated firms practical assistance and information on preparing the Statement of Responsibilities (“SoR”) and Responsibilities Maps. The guidance stated that the SoR is "not the same as a job profile" and should therefore "not describe the competencies and skills required for the role", but what the role holder is accountable for.


FCA consults on temporary permissions regime for inbound firms and funds

On 10 October 2018, the FCA published a consultation paper (CP18/29) on the temporary permissions regime for inbound firms and funds. The temporary permissions regime will come into force when the UK leaves the EU if there is no transition period and the current passporting regime under the Financial Services and Markets Act 2000 (FSMA) falls away.


UK financial services industry introduces new financial abuse code of practice

On 10 October 2018, UK Finance published a new voluntary code of practice to support victims of financial abuse.

The code is based on six principles: (i) raising awareness and encouraging disclosure; (ii) training of colleagues; (iii) identification and appropriate response; (iv) minimising the need to repeat one's story in the same organisation; (v) help to regain control of finances; and (vi) signposting and referrals. UK Finance states that the code of practice will bring increased awareness and better understanding of what abuse looks like for firms, colleagues, victims, potential victims and their families, ensuring more consistency in the support available for those who need it.


FSB report on potential implications of cryptoassets for future financial stability

On 10 October 2018, the Financial Stability Board (FSB) published a report on the potential implications of cryptoassets for future financial stability. It has concluded that, based on the available information, cryptoassets do not pose a material risk to global financial stability at this time. The report also stated, however, that cryptoassets raise several broader policy issues and vigilant monitoring is needed in view of the speed of market developments. The report then considers the financial stability implications of these primary risks through a variety of transmission channels. These include confidence effects and reputational risks to financial institutions and their regulators, risks arising from financial institutions' direct or indirect exposures to cryptoassets, risks arising if cryptoassets became widely used in payments and settlement, and risks from market capitalisation and wealth effects.


European Parliament adopts non-legislative Resolution on distributed ledger technologies and blockchains

The European Parliament (EP), on 3 October 2018, adopted a non-legislative Resolution on distributed ledger technologies (DLTs) and blockchain. The EP, in its non-legislative Resolution considered the many benefits and possibilities of blockchain technology with reference to a number of its potential applications, In the non-legislative Resolution, the EP asked to EC to undertake policy initiatives that promote the competitive position of the EU in the field of DLT and emphasised that the EU has an excellent opportunity to become a global leader in the field of DLT.


ISDA extends deadline for derivative fallback consultation to October 22

In July, ISDA launched a market-wide consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates (IBORs). The consultation sets out options for adjustments that would apply to the fallback rate in the event an IBOR is permanently discontinued. The consultation deadline, originally this Friday, October 12, has been extended to Monday, October 22.


ISDA® paper: impact of cliff-edge Brexit on derivatives market

On 9 October 2018, ISDA® published a paper on the impact that a no-deal Brexit would have on the OTC derivatives market. In the event of a cliff-edge Brexit, without a withdrawal agreement or transition period in place, the UK would become a third country under EU law. The issues addressed in the paper include: (i) UK central counterparties (CCPs) ceasing to be recognised in the EU under EMIR; (ii) the MiFIR transparency and reporting regime ceasing to apply to instruments traded only on UK trading venues; and (iii) systems designated by the UK authorities under the Settlement Finality Directive (SFD) no longer benefiting from the protections afforded by the SFD. The paper also looks at impacts arising under the Capital Requirements Regulation, UCITS Directive, BRRD, Market Abuse Regulation and Benchmarks Regulation and urges EU authorities to take mitigating action as soon as possible.


Fieldfisher and TeamBlockchain launch Blockchain and Crypto Telephone Surgery to offer rapid bespoke legal advice to businesses in the cryptocurrency and digital payment platforms sector

International law firm Fieldfisher and consultancy TeamBlockchain have launched a Blockchain and Crypto Telephone Surgery for companies looking for expert professional guidance on cryptocurrency and digital payments. Focusing primarily on issues affecting tokenisation and distributed ledger financial technologies (fintech), the surgery will also offer advice and insights on the wider fintech universe. Fieldfisher partners and TeamBlockchain consultants will give advice on different regulatory and legal issues in the context of specific industries, supported by relevant, real life examples of how organisations are using blockchain and the increasing role of cryptocurrency in digital business. Surgery sessions will last between 40 minutes, in the form of one-on-one appointments or small group discussions, as clients prefer. Sessions will be interactive, enabling participants to get a better understanding of the subjects under discussion. Clients will be asked to provide some prior briefing on their sector of interest, objectives and concerns in order to maximise the benefits they receive from surgery appointments. This type of consultative support has proved helpful for professional advisors and their clients, who want to be more active in the cryptocurrency and blockchain sectors but lack the in-house skills to realise their ambitions.

Fieldfisher and TeamBlockchain's experts are independent advisors who provide clients with honest, pragmatic advice on a range of fintech issues day-to-day. These surgeries are designed to provide, swift, tailored advice on an as-need, no obligation basis, with follow-up support available as required. The cost of each surgery is £500 +VAT and includes a pre-briefing, phone consultation and follow-up materials. For more information, please contact one of the Surgery Team:;; and


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Cummings Fisher
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25 05 2019

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