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"As always, you are so bloomin' impressive. It's lucky, as they said about Sherlock Holmes, that you did not decide to go to the bad."
Neasa McErlean

"Consumer Complaints and Compensation: A Guide to the Financial Services Market" City & Financial

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ESMA announced a major crackdown but only for three months on contracts for differences. Its measures on the subject announced at the end of April will stop firms selling binary options to retail customers and make it increasingly difficult to sell other CfD products into the retail market. Firms will have to disclose the proportion of accounts which have lost retail clients money in the previous 12 months (typically around 80%) and limit the margin allowed on a variety of different contracts. The approach is very similar to that put forward by the FCA in CP 16/40. It is likely to move the battleground in this field into questions about whether firms are correctly classifying customers as professional to avoid the temporary rules. When the provisions expire, ESMA and national regulators can continue them. So, this could be the beginning of a long-term development.

The FCA has consulted on a clean-up of its Financial Crime Guidance. GC 18/1 sets out new guidance on insider trading and market manipulation while updating references to Money Laundering and other aspects of financial crime to bring them up to date. Part 1 will shortly be known as FCG and Part 2 which consists of old financial crime thematic review reports will carry the new acronym FCTR.

Adam Samuel passed another exam! In May, Adam successfully navigated his way through the CISI Certificate in Financial Crime, reflecting or signalling a greater interest on his part in money laundering and other forms of financial crime!

Changes to the pension transfer rules in COBS 19 came into force on 1 April. More alterations affecting the methodology required are due with us on 1 October.

The introduction of MiFID II into the UK in January has led to an extraordinary expansion of the COBS and DISP rulebooks covering conduct of business and complaints due to the FCA'S strange decision not to raise UK standards to MiFID levels but instead to create similar but separate rules for MiFID and non-MiFID business.

STORIES YOU MIGHT HAVE MISSED

Consumer financial services complaints and compensation, 2nd edition, came out in the last week of July. To learn how to buy the only book on consumer financial services complaints in the UK, click here.

The FCA managed to publish its final rules for MiFID cases as the book was at the printers. The rule changes are nominal and largely unhelpful with the regulator deciding to create a whole new DISP 1.1A to cope with this subject.

In Full Circle, Mr Justice Nichol, rightly rejected the argument that FOS was bound by the findings of the FCA in enforcement proceedings or any other sort of investigation. He rejected the argument that a medium-risk fund is automatically suitable for a medium-risk client. Recommendations have to match customers? Wishes and needs in a wide variety of ways.

OUT AND ABOUT:

Readers might find this decision interesting. It's an ordinary tale of Soho life.

An English High Court Judge has criticised the inclusion in the non-waivable red list of the IBA Guidelines on Conflicts of Interest for arbitrators of situations where the arbitrator’s law firm earns significant revenue from a party's affiliate. In re W, Mr Justice Knowles refused to set aside the resulting arbitration award. He concluded that there could not be justifiable doubts about the independence of a semi-detached partner of the firm who was totally unaware of the post-appointment merger of his firm’s big client with an affiliate of the party to the arbitration.

Mr Justice Hamblen removed an arbitrator for failing to disclose multiple arbitrator appointments involving a party either as a litigant or a claims handler made through appointing organisations in Cofely v. Bingham. The arbitrator might have been better advised to have followed the Chartered Institute of Arbitrators 2011 Guidelines on handling court applications, rather than attempting to cross-examine counsel asking about his prior appointments.

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