In the first of a series of shorter posts today, we will react to the news that Goldman Sachs has been handed a financial penalty by the FCA for misrepresenting a vast number of transactions over the past decade. In the largest fine of its kind ever given out by the regulator, the FCA has fined Goldman’s London Unit £34.4 million for ‘ failing to provide accurate and timely reporting relating to 220.2 million transaction reports between November 2007 and March 2017 ’. Because Goldman agreed to resolve a proportion of the issue – issues relating to the firm’s change management processes and its maintenance of counterparty reference data – the figure of £43.4 million is actually a reduction on what should have been a £49 million fine. The firm is guilty of not complying with the rules of the Markets in Financial Instruments Directive , or MiFID, and is the second such action taken against a bank by the FCA in less than a month after UBS was fined £28 million for the same thing. I...

In this very short post we will react to the news that broke today regarding the future of the Financial Reporting Council. We have covered the FRC on a number of occasions here in Financial Regulation Matters and the posts have been highly critical of what was a feeble regulator. We had only looked previously at the regulator and the fact that it was under review, but today the final decision was made on the future of the FRC. Founded in 1990, the Financial Reporting Council was today confirmed by the Government as being no more. In its official press release, the Government stated that, after considering the Kingsman Review, the FRC would be replaced with a new regulator. That regulator will be called the Audit, Reporting and Governance Authority . The business media are reporting that the new regulator ‘ will have stronger statutory powers, including the ability to make direct changes to accounts and powers to require rapid explanations from companies and publish reports ab...

We have spoken here in Financial Regulation Matters of the potential for a regulatory race-to-the-bottom in the post-Brexit era. With the U.K. choosing to go out into the economic landscape on its own, the potential for a weakening of regulatory protection to encourage foreign trade and investment is tremendous, and hardly a surprise. Yet, the FCA, as one of the fundamental elements in the regulatory framework that governs the U.K., has no option but to refute any suggestion that the framework will be weakened as a result of Brexit. In this post, we shall examine their latest insistence on the back of what were very telling declarations by leading British politicians. Speaking on a recent visit to Tokyo, the Economic Secretary John Glen told his audience that ‘ we will do whatever it takes to keep the UK as a global hub for financial services and to maintain the City of London as an asset for Europe ’. This follows on from Theresa May telling the UN Summit in New York recently ...

Previously in Financial Regulation Matters we have discussed the issue of whistleblowing, mostly in relation to the case of Barclay’s CEO Jes Staley ( here and here ). We know that the FCA faced criticism for not suspending Staley in that case, so today’s news that the regulator are looking into the conduct of Royal Bank of Canada (RBC) has brought the issue to the forefront once more. In today’s post we will review this news and look at what whistleblowing actually means, and its ‘function’ in a much broader sense. The case with RBC has accelerated after a former trader recently won his case against the bank for unfair dismissal. The claim, relating to the trader’s revelations regarding the ‘box-ticking’ culture that was/is prevalent within the firm , concluded with the judge describing the bank’s conduct as ‘egregious’ and that, ultimately, ‘employers should take better care of whistleblowers even if they find them somewhat enervating’. Whilst the FCA has not confirmed the ...

We have reviewed the collapse of BHS here in Financial Regulation Matters , whilst we have also reviewed the performance of the Financial Reporting Council (FRC) here . We also looked at a number of investigations that the FRC were undertaking with regards to the audit sector, with the regulator’s record fine against PwC for its auditing of BHS being one of the more recent actions taken. However, what looks like a victory for the regulator, at first glance, is quickly becoming anything but, and in today’s post we shall look at the sentiment of the regulators actions in this case. When the announcement was made that PwC would be fined, and one of its partners involved in the audit banned for life, it was suggested by the regulator that they would be releasing an extensive report into what went wrong . However, Sir Philip Green initiated legal proceedings to amend, and essentially delay the report from being published on the grounds that it would negatively affect members of h...

In today’s post, the focus will be on the so-called “Big Four” audit firms – PwC, KPMG, Deloitte, and E&Y – after details of the collapse of construction firm Carillion continue to have a significant effect. We will examine these calls to dismantle the long-standing oligopoly, but there will be a discussion about what these calls actually mean. This author has advanced the notion of a ‘divergence’ existing when it comes to regulating oligopolies (specifically in relation to the Credit Rating industry), and it will be discussed whether this is the case in this particular instance also. There will also be some reference to a forthcoming book by this author on this very topic. The calls for the dismantling of the audit oligopoly could stem from a number of instances in reality, but the current calls stem from the collapse of Carillion. We have covered this collapse here in Financial Regulation Matters since the first warning-signs were uttered, but the revelations regardin...

In today’s post, the focus will be on a recently accepted article produced by this author. The article, which is concerned with examining a particular aspect of the post-Crisis regulatory approach to affecting the industrial structure of the ratings industry, has recently been accepted by the International Company and Commercial Law Review . This author has examined this particular aspect of the U.S. response to the Crisis before in a previous article , but from a different perspective; in this article, the emphasis is upon using the time that has passed since the establishment of the provision to examine whether it has had any effect and, if not then why not. The provision in question is a very small section of the Dodd-Frank Act 2010 , and whilst the section covers a few aspects the article is concerned with the attempt to encourage competition within this particular sector. The multiple aspects can be best classified as the ‘ Rule 17g-5 Program ’ and it was the Dodd-Frank Act...

Owing to the dynamics of the academic year, there has been somewhat of a lull recently here in Financial Regulation Matters , so to get up to speed a round-up of developments within the banking sector seems like a good place to start. There have been a number of developments since the last post, so today we will work our way through them as efficiently as possible; the underlying sentiment is that the developments portray a sector that is consistently changing since the Crisis, with a number of aspects of that said Crisis continuing to play out (rather unsurprisingly). We start with our old friends RBS, who have taken up a large amount of space in Financial Regulation Matters , mostly on account of their remarkable development since the Crisis. Past posts have focused on the unique relationship that continues between the bank and the government (on account of its ownership of the bank), its terrible performance (alongside the FCA) in relation to its treatment of SMEs , and also...

The issue of debt, and more specifically personal debt, has been a consistent focus here in Financial Regulation Matters , with the most recent post reporting on the fears that the personal debt crisis was set to deepen . Whilst we know that this crisis, and the ‘age of austerity’ go hand in hand, there are, of course, a number of competing elements that are fuelling the current debt crisis. In today’s post, the focus will be on the latest fears regarding the crisis, but also on calls by an influential Labour MP who is calling now for the credit card companies to come under increased scrutiny after successfully campaigning against payday lenders like Wonga. Rather than general debt figures being the focus this week in the media, the focus instead focuses upon credit card debt specifically. This is on the back of official figures that note that, over the last few months, the rate of credit card debt has risen to a 12-year high . The reported rise was over 8% for the last year , w...

The Financial Conduct Authority (FCA), one of Britain’s primary financial regulators, has featured heavily within Financial Regulation Matters , for obvious reasons. However, a lot of the recent posts focusing on the regulator have been concerned with its approach to the unfolding scandal at RBS, with its role in the publication of a damning report drawing attention most recently. However, recently there have been suggestions that the regulator has ‘ gone soft ’ in its approach to the regulated, with the RBS debacle being cited as the most compelling evidence for the regulator’s approach. In this post, these accusations will be assessed against the evidence, with a larger question being asked with regards to both the role of the regulator in the larger picture, and its willingness to take action. The decision by the FCA to commission, and then refuse to release a damning report into the operations of RBS and its treatment of small and medium enterprises (SMEs), has caused outra...

Before this post starts with any preamble, it is important to note a couple of things. Firstly, this post will not be covering the issue in tremendous depth, mostly because the issue is so large that to attempt to do so in this forum would not do the issue any justice at all – there are many fabulous campaigners that do the issue tremendous justice on account of their continuous and tireless campaign against what is now confirmed as being a systemic issue (see @Spandavia and @Ian_Fraser for just two excellent examples of this). The second thing to note is that the report, which we will focus on in this post, is particularly extensive and requires a thorough examination (the report can be found here ). With those aspects acknowledged, what this post will do is look at some of the ramifications from the report, the scenario within which it was released (which is a remarkable story in itself), and also what it potentially tells us about the relationship between the regulator and t...

The case of Carillion has made for a number of posts here in Financial Regulation Matters , ranging from the commencement of the crisis to the fallout, both in regards to the effect upon the sector and also the effect upon the pension fund and the protective framework that exists to protect pension holders from these sorts of crises . However, news that broke today concerning the performance of the pensions regulator in the U.K. and, specifically, its performance in the previous few years regarding the ever-deteriorating situation at Carillion has brought the pensions regulator’s performance to the forefront of discussions. In today’s post, we will review this breaking news and further examine the pensions regulator as, one would assume, the crisis continues and associated authorities are dragged further into the mire in relation to this massive collapse. Rather than restart the examination of Carillion in any great detail, it is best to start with the issue at hand. Today’s n...