The Ministry of Justice ("MoJ") has launched an 8 week consultation on the "adequate procedures" guidance under the Bribery Act 2010 (the "Act"), which is due to be published by the Government in final form in early 2011.

The consultation, which is open to anyone with an interest in the Government's guidance, was announced on the Ministry of Justice's website, together with the publication of draft guidance on "adequate procedures", a questionnaire for responding, and an impact assessment.

The consultation covers all of the UK, other than Northern Ireland where there is to be a separate, parallel consultation, and closes at 5pm on 8 November 2010.

Draft guidance on "adequate procedures"

The Act, which is due to be implemented in April 2011, contains a new offence which can be committed by a UK body corporate or partnership, or any entity which carries on business or "part of a business" in the UK, where a person performing services on its behalf, bribes a person, anywhere in the world. The only defence to that offence is where the corporate has in place "adequate procedures" designed to prevent bribery occurring on its behalf. Under section 9 of the Act, the Government is to publish guidance on "adequate procedures", the objective of which is to support businesses to determine the sorts of bribery prevention measures they may consider putting in place.

As part of the consultation process, the MoJ has now published and invited comments on draft section 9 guidance which is "designed to help commercial organisations of all sizes and sectors understand what sorts of procedures they can put in place to prevent bribery from occurring within them. It is designed to be of general application....[it] is not prescriptive and is not a one-size-fits-all document."

To this end, the draft guidance sets out "Six Principles for Bribery Prevention", together with commentary on each. In summary:

• Top level commitment - "...the theme is making the message clear, unambiguous and regularly made to all staff and business partners";

• Risk Assessment - "this is about knowing and keeping up to date with bribery risks you face in your sector and market";

• Due diligence - "this is about knowing who you do business with; knowing why and to whom you are releasing funds and seeking reciprocal anti-bribery agreements...";

• Clear, Practical and Accessible Policies and Procedures - "this concerns applying them to everyone you employ and business partners under your effective control and covering all relevant risks...";

• Effective implementation - "this is about going beyond 'paper compliance' to embedding anti-bribery in your organisation's internal controls, recruitment and remuneration policies, operations, communications and training on practical business issues";

• Monitoring and review - "this relates to auditing and financial controls that are sensitive to bribery and are transparent, considering how regularly you need to review your policies and procedures and whether external verification would help."


Source: Ministry of Justice

MOJ Website

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Source: The Consulting Consortium

TCC Website

Global banking regulators have agreed an arrangement whereby the size of capital reserves of world banks will effectively be trebled against losses, in one of the most important reforms to emerge from the financial crisis.

The package, known as Basel III, sets a new key capital ratio of 4.5 per cent, more than double the current 2 per cent level, plus a new buffer of a further 2.5 per cent. Banks whose capital falls within the buffer zone will face restrictions on paying dividends and discretionary bonuses, so the rule sets an effective floor of 7 per cent.

A majority of countries, including the US and UK, wanted tougher standards than those that finally emerged, but they agreed to a lower total ratio and an extended implementation period after resistance from other significant economic players such as Germany. The new rules will be phased in from January 2013 through to January 2019.

The long-awaited agreement, negotiated finally during the weekend by central bankers and officials, follows months of in depth discussions among the 27 member countries of the Basel Committee on Banking Supervision over how to make banks more resilient to financial shocks.

Tougher capital standards are considered critical for preventing another financial crisis, but bankers had warned that if the new standards were too harsh or the implementation deadlines too short, lending could be curtailed, cutting economic growth and costing jobs.

In addition to the 4.5 per cent so-called core tier one ratio, and the 2.5 per cent buffer, the reform package also endorses the idea of an additional buffer of up to 2.5 per cent of core tier one capital to counter the economic cycle, although the details on this remain sketchy.

Analysts say that most large US and European banks can meet the 7 per cent standards without substantial new equity raising. But some public sector German banks could struggle. The Basel group also warned that it was still working on setting additional requirements for the largest global banks deemed systemically important.


Source: Financial Times

Ireland’s Ministry of Finance (MoF) has announced that Anglo Irish Bank will be split into a Funding Bank and an Asset Recovery Bank. This is expected to take effect on 1 January 2011.

The MoF stated that the guaranteed position of depositors will be unchanged by the new arrangements and no action is required of them as a result of the announcement. It is planned that Anglo Irish Bank’s depositors – including those based in the UK- will become customers of the Funding Bank which will be fully capitalized and continue as a regulated bank.

Anglo Irish Bank is based in Ireland, and the lead regulator is the Irish Financial Regulator. The Financial Services Authorities (FSA) is working closely with the Irish authorities.

Anglo Irish Bank operates in the UK through an EEA (European Economic Area) branch. It operates a commercial lending business and offers savings accounts through a telephone and post-based service.


Source: Financial Services Authority

FSA Website

Demand for mortgages in July continued to be weak in what is traditionally a strong month, according to the latest regulated mortgage survey by the Council of Mortgage Lenders.

There were 56,000 loans for house purchase (worth £8.4 billion) advanced in July, up from 52,000 (worth £7.7 billion) in June, and from 53,000 (worth £7.3 billion) a year ago. While this reflects the seasonal rise in activity at what is usually a strong part of the year, these volumes still represent a very weak market.

The 28,000 remortgage loans (worth £3.5 billion) were unchanged from June and down from 40,000 (worth £4.9 billion) in July 2009.

Loans to first-time buyers declined to 19,400 (worth £2.4 billion) in July, from 19,700 (also worth £2.4 billion) in June and from 20,100 (worth £2.3 billion) in July 2009.

Having eased during the early part of the year, loan criteria have now tightened a little. First-time buyers put down average deposits of 24% in the month, unchanged from June but up from a recent trough of 21% in April and May. But low interest rates mean that interest payments continue to take up a relatively modest share of income. At 13.2% this was down slightly from the previous month and the lowest it has been since early 2004.

First-time buyers' share of the market was at 34% in July, down from 38% in June. This is the lowest proportion since before the credit crunch began in August 2007.

Lending to home movers picked up in July. There were 36,900 loans (worth £6 billion), up 13% in volume and 15% in value from June and 11% in volume and 20% in value from a year earlier.

Like first-time buyers, home movers have seen their average deposits rise again -from 33% in June to 35% in July. But their interest payments as a percentage of income have held steady at 9.6% - still the lowest share going back to the early 1970s.

The take-up of full repayment products has remained high for a year. In July, 90% of first-time buyers took out a repayment mortgage, compared to July 2007, before the credit crunch, when only 67% did. 72% of home movers and 70% of those remortgaging also chose a full repayment mortgage in July this year.

CML economist Paul Samter said:

"The increase in the prevalence of repayment mortgages is likely in part to reflect the anticipation of regulatory changes by the Financial Services Authority to limit the availability of interest-only mortgages. More generally, lending criteria remain tight, underpinned by caution on the part of both borrowers and lenders in the light of continuing economic uncertainty."


Source: Council of Mortgage Lenders

CML Website

Dr Ward, Lloyd’s Chief Executive, has called for insurers to continue to engage with regulators as they craft the rules that will govern the financial services industry in the future. Richard Ward used the reinsurance industry’s biggest annual meeting in Monte Carlo to call for his counterparts to see the value in regulatory change and act on the opportunities it presents.

In his keynote speech at the PricewaterhouseCoopers’ breakfast, Dr Ward called for insurers to continue to engage with regulators as they craft the rules that will govern the financial services industry post the financial crisis of 2008.

“We are at a critical point. Regulators are in the process of implementing significant changes and the industry needs to continue to engage with them constructively. That is the only way we can seek to ensure that the outcomes are appropriate for our business,” he said.

He also told insurers that they need to ensure that they do not become the victims of rules which are meant to curb banking excesses, and that a one size fits all approach to financial services will damage the insurance industry. The industry needs to work with regulators on rules which will add value to their businesses.

“The insurance industry has navigated the global crisis well. We are not the banking sector, and we need to continue to show leadership in reminding governments of the positive role we play. These are points that the industry has been making throughout the post-crisis period but we need to keep making them.”

His speech comes soon after the European Union announced changes to the way financial services is supervised across member states. The new European Systematic Risk Board will be responsible for oversight – to analyse information, identify systemic risk and to issue warnings and recommendations. Under the Board there will be three Supervisory Authorities one of which, the European Insurance and Occupational Pensions Authority, will be responsible for monitoring insurance.

Dr Ward believes the proposed structure sensibly leaves day-to-day supervision to the home state regulator. He also focused on the challenge for insurers in implementing Solvency II, the European Union’s new regulations for the industry, scheduled to come into force in 2013.

Describing Solvency II as ‘the biggest regulatory challenge for a generation’, Dr Ward urged insurers to see the regime as ‘an opportunity, not a threat. Insurers should ensure that the hundreds of millions they are spending on implementing the EU’s new rules actively improve the running of their business. Lloyd’s is working hard to ensure the new rules support its capital, performance and risk management structures.’


Source: Lloyd's

Lloyd's Website

This consultation paper, will amongst other things, consider the existing qualification arrangements and who should be responsible for its maintenance.

The FSA will consult on including the lists of qualifications meeting regulatory requirements within the FSA handbook, rather than the FSSC developing the ApEx standards with the industry and then maintaining the list on behalf of the FSA.

This consultation will close on the 6 September 2010 and a policy statement will be published towards the end of 2010. The FSSC has responded to this CP, see the link below.


Source: Financial Services Skills Council

FSSC Website

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Source: The Consulting Consortium

TCC Website

This has now been published and covers the following topics:

• Employers Skills Survey 2010 – an opportunity for employers to express their thoughts on the level of skills required by the finance, accountancy and financial services sectors

• Forum – an opportunity to speak on initiatives to attract and develop talent

• Professional and career development loans – ranging from £300 to £10,000 for up to two years learning.


Source: Financial Services Skills Council

FSSC Website

The FOS has published a further expanded on-line technical resource about the ombudsman’s approach to complaints involving financial hardship and unaffordable lending related to consumer debt (such as current account overdrafts, credit card debts, loan and hire purchase).


Source: Financial Ombudsman Service

FOS Website