Global Financial Regulatory Blog

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FCA Board Focuses on AI

A new publication from the UK’s financial regulator signals to firms that they should take steps to manage risks in the use of AI. By Stuart Davis, Fiona M. Maclean, Gabriel Lakeman, and Imaan Nazir The UK’s Financial Conduct Authority (FCA) has published its latest board minutes highlighting its increasing focus on artificial intelligence (AI), … Continue Reading

Hong Kong Court Clarifies Scope of Collective Investment Schemes and Securities

The ruling confirms that courts will consider substance over form when assessing collective investment scheme arrangements and exemptions under securities law. By Simon Hawkins and Adrian Fong On 2 August 2023, the Hong Kong Court of Appeal handed down judgment in the case of 律政司司長 (Secretary of Justice) v. IPFUND Asset Management Limited [2023] HKCA … Continue Reading

Pension Superfunds Return to the De-Risking Menu

The UK government has signalled the importance of introducing a permanent superfund regulatory regime. By Victoria Sander After the excitement around Clara-Pensions’ approval as a “superfund”, or pension consolidator, in late 2021, the market generally expected that other pension superfund structures would soon follow suit. Last year’s mini-budget and the ensuing liability-driven investment (LDI) crisis, … Continue Reading

SEC Adopts Significant Rule Changes for Private Fund Advisers

The amendments have a substantial impact on private fund managers. By Laura N. Ferrell, Aaron Gilbride, Michael Milazzo, Jamie Lynn Walter, Mike Hart-Slattery, and Haley Hohensee On August 23, 2023, the Securities and Exchange Commission (SEC) adopted a final rule package (each a Rule, and together, the Rules) that modifies the regulation of private fund … Continue Reading

Hong Kong Regulators Announce Streamlined Approach to Dealing With Sophisticated Professional Investors

The HKMA and the SFC permit relaxation of suitability and other regulatory requirements while dealing with high-net-worth and experienced investors. By Simon Hawkins and Adrian Fong On 28 July 2023, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) issued a joint circular (Joint Circular) outlining a new streamlined approach for … Continue Reading

The Edinburgh Reforms — Where Are We Now?

As the pace of reform increases, we take a look at key developments and the timeline ahead. Significant progress has been made on the Edinburgh Reforms since they were announced in December 2022, with developments gathering pace before the summer break. Given the breadth and speed of the reforms, now is a good time to … Continue Reading

FCA Consults on Revamped Guidance for Financial Promotions on Social Media

Regulator clarifies that existing FCA rules will continue to apply but will also reflect the evolving landscape of financial promotions on social media. By Nicola Higgs, Stuart Davis, Fiona Maclean, Gabriel Lakeman, and Gary Whitehead On 17 July 2023, the FCA published a guidance consultation (GC23/2) relating to financial promotions on social media. Acknowledging that … Continue Reading

FRB Vice Chair for Supervision Recommends Stronger Capital Standards for Large US Banks

After a lengthy “holistic” review and a spring banking crisis, US bank capital requirements finally face overhaul. By Arthur S. Long, Pia Naib, Ja Hyeon Park, and Deric Behar On July 10, 2023, US Federal Reserve Board (FRB) Vice Chair for Supervision Michael Barr delivered a speech that outlined his approach to regulatory reform after … Continue Reading

UK Supreme Court Clarifies the Scope of the Quincecare Duty

The Court held that banks do not owe this duty to customers deceived into instructing their banks to transfer money to fraudsters. By Nell Perks and Callum Rodgers On 12 July 2023, the UK Supreme Court handed down its highly anticipated judgment in Philipp v. Barclays Bank UK PLC [2023] UKSC 25, allowing the appeal … Continue Reading

FCA Publishes Further Engagement Papers on Prospectus Reforms

The FCA reveals its initial thinking on the regulatory framework for primary multilateral trading facilities and public offer platforms. By Chris Horton, James Inness, Anna Ngo, and Johannes Poon On 13 July 2023, the FCA published its fifth and sixth engagement papers to solicit discussion and feedback on the regulation of public offer platforms and … Continue Reading

HM Treasury Publishes UK Investment Research Review’s Final Report

The Review recommends scrapping research unbundling, but also proposes a range of other changes to the UK research landscape. By Rob Moulton, Chris Horton, Sean Wells, Charlotte Collins, and Johannes Poon On 10 July 2023, HM Treasury published the final report produced by the independent UK Investment Research Review (Review). The Review was launched on … Continue Reading

FCA Publishes Final Guidance on the Trading Venue Perimeter

UK regulator follows the European Securities and Markets Authority in clarifying the scope of the trading venue perimeter. By Nicola Higgs and Sidhartha Lal On 5 July 2023, the FCA published its Policy Statement (PS23/11) containing final guidance on the trading venue perimeter, following its September 2022 consultation on the same matter. The new guidance … Continue Reading

FRB Governor Recommends Circumspect Approach to Bank Regulatory Reform

Governor Bowman calls for transparent supervisory expectations and attention to the consequences of regulatory reform on the broader financial system. By Arthur S. Long, Pia Naib, Ja Hyeon Park, and Deric Behar On June 25, 2023, US Federal Reserve Board (FRB) Governor Michelle W. Bowman gave a speech that outlined her views of the best … Continue Reading

HM Treasury Consults on Reforms to UK Anti-Money Laundering Supervision

The consultation sets out four potential models for reform, and also considers reform to sanctions supervision. By Rob Moulton, Jonathan Ritson-Candler, Thomas F. Lane, and Charlotte Collins On 30 June 2023, HM Treasury published a consultation on reforms to anti-money laundering (AML) and counter-terrorism financing (CTF) supervision in the UK. HM Treasury is consulting on … Continue Reading

The Consumer Duty — One Month to Go

With the implementation deadline looming, the FCA has set out some additional guidance for firms. By Nicola Higgs, Becky Critchley, Effie Stathaki, and Charlotte Collins With one month to go until the Consumer Duty (Duty) implementation deadline of 31 July 2023 (for new and existing products and services that are open for sale or renewal), … Continue Reading

Funded Reinsurance: The PRA Flags Risks From Thematic Review

UK regulator continues to raise concerns that current market practices could lead to systemic risk. By Victoria Sander The Prudential Regulation Authority (PRA) has issued another communication, the latest of a series related to reinsurance arrangements for the UK life insurance sector. Charlotte Gerken, Bank of England Executive Director, Insurance Supervision and chair of the … Continue Reading

Consumer Duty: What Do Boards Need to Know?

By David Berman, Nicola Higgs, Rob Moulton, and Beck Critchley With the Consumer Duty application date of 31 July 2023 fast approaching, this briefing reviews the ongoing obligations that apply to the boards of FCA-regulated firms under the Consumer Duty, including (1) embedding good customer outcomes, (2) ongoing monitoring, and (3) the annual assessment. Authored … Continue Reading

EU Consults on Plans for a New Regulatory Regime for ESG Ratings Providers

An evolving landscape of reforms in the ESG ratings sector continues to pose challenges to providers of ratings and scores. By Paul A. Davies, Nicola Higgs, Rob Moulton, Michael D. Green, Becky Critchley, Anne Mainwaring, and Charlotte Collins International momentum to regulate ESG ratings continues as the European Commission released a consultation on 13 June 2023 to create a new … Continue Reading

Form N-PX “Say on Pay” Disclosure Requirement for 13F Filers Will Become Effective July 1, 2024

Form 13F filers will need to file their first Form N-PX covering the period of July 1, 2023, to June 30, 2024, by August 31, 2024. By Stephen P. Wink, Naim Culhaci, Laura Ferrell, Aaron Gilbride, Matthew Lee, and Jacqueline Marie Rugart Rule 14Ad1 of the Securities Exchange Act of 1934 (Exchange Act), which was … Continue Reading

Latham Collaborates on the Lexology Getting the Deal Through 2023 Equity Derivatives Guide

The guide enables side-by-side comparison of critical equity derivatives issues across key jurisdictions. By Rafal Gawlowski The past several years emphasized the growing importance of strategic equity solutions as part of corporate finance advisory services for both listed issuers and their controlling shareholders. Strategic equity solutions include a range of equity derivatives products, such as … Continue Reading

European Commission Proposes Wide-Ranging Enhancements to Retail Investor Protection Rules

As the “most ambitious legislative proposal since the inception of EU financial regulation”, the changes would make significant amendments to MiFID II and PRIIPs. By Rob Moulton, Nicola Higgs, Becky Critchley, Gary Whitehead, and Charlotte Collins On 24 May 2023, the European Commission (Commission) published a package of proposals to strengthen protections for retail investors … Continue Reading

Global Regulators React to Banking Sector Turbulence

Following this spring’s shocks to the banking system, US, UK, and European regulators are considering whether existing regulatory and crisis management measures require reform and enhancement. By David Berman, Nicola Higgs, Markus E. Krüger, Arthur S. Long, Rob Moulton, Axel Schiemann, Pia Naib, Ja Hyeon Park, Deric Behar, and Charlotte Collins The spring of 2023 … Continue Reading

New Federal Exemption Changes the Registration Landscape for M&A Brokers

The narrower M&A broker exemption supersedes the 2014 M&A broker no-action letter while leaving state-level restrictions and foreign M&A broker relief unaffected. By Marlon Q. Paz, Stephen P. Wink, Naim Culhaci, Donald Thompson, and Deric Behar On March 29, 2023, the Securities Exchange Act of 1934 (Exchange Act) was amended to exempt certain “M&A brokers” … Continue Reading

European Commission Clarifies Aspects of SFDR With Additional Guidance

The Commission has clarified requirements for financial product classifications and the definition of “sustainable investment” under the SFDR. By Paul A. Davies, Nicola Higgs, Michael D. Green, Anne Mainwaring, and James Bee In April 2023, the European Commission (Commission) published a series of answers to questions that the European Supervisory Agencies (ESAs) had raised in September 2022 on the legal interpretation of … Continue Reading