On Wednesday, March 31, 2021 the Ethics in the Age of Digital Finance: Issues and Challenges event was held online, which was organised jointly by the Observatoire de la Finance (Geneva) and the Hoffmann Global Institute for Business and Society (INSEAD). From online banking to contactless payments and cryptocurrencies, financial technology – or FinTech – is rapidly impacting the financial services industry and those who must supervise and use it. The webinar presented an invaluable opportunity to engage in a meaningful discussion on how new technologies impact financial services and what the ethical opportunities and challenges are by the digitisation of finance. It also introduced the audience to the global Prize “Ethics & Trust in Finance for a Sustainable Future” that was initiated in 2006 by the Observatoire de la Finance. The Risk & Compliance Platform Europe also took part in this online event and covered it via its website. This is part one in a series of three articles on this webinar. Continue reading…

The Financial Conduct Authority (FCA) has acted to stop a Cypriot based firm, Finteractive Limited (trading as FXVC), from offering high risk contracts for difference (CFDs) to UK investors. FXVC used a variety of inappropriate techniques, including misleading financial promotions which appeared to offer consumers the opportunity to purchase shares in a well-known company and failed to mention that they were actually promoting CFDs. Continue reading…

by Michel Klompmaker

Economic crime costs more than £193bn per year. Tackling this complex problem requires an interdisciplinary perspective. A seminar series in economic crime invited those with expertise and interest in economic crime across faculties, departments, students and broader community to come together, share ideas, and engage in a collaborative work. This interdisciplinary initiative was organised by Dr. Branislav Hock, who is a Senior Lecturer in Economic Crime at the University of Portsmouth. The Economic Crime Seminar Series was held on March 24 2021 online, and was organised through the joint effort of the Institute of Criminal Justice Studies, Portsmouth Law School, Portsmouth Business School – the Department of Economics and Finance, and Portsmouth Business School – the Department of Accounting and Financial Management. Continue reading…

The Financial Stability Board (FSB) recently published a letter from the FSB Chair, Randal K. Quarles, to G20 Finance Ministers and Central Bank Governors of their virtual meeting on 7 April. The FSB also delivered to the G20 a report on factors to be considered in extending, amending and ending COVID-19 support measures. The letter notes that, while progress is moving at different speeds across jurisdictions, the vaccine rollout heralds an inflection point in the COVID-19 pandemic. While it is sensible to keep measures that support financial system stability and financing of the real economy in place as long as needed,  the factors to be considered in deciding whether to extend, amend and, eventually, end support measures are taking shape. Continue reading…

Eurojust has ensured the coordination of cross-border investigations at the request of the Italian authorities (Public Prosecutor’s Office of Reggio Calabria) concerning a massive fraud with fuel taxes worth about EUR 1 billion. The Agency enabled the freezing of bank accounts in Bulgaria, Croatia, Germany, Hungary, Malta and Romania. It also ensured the seizure of companies’ assets or the administrative closure of enterprises used for the fraud scheme, where possible. In a large-scale operation, 23 suspects were recently arrested in Italy and about EUR 600 million worth of assets were seized.  Continue reading…

by Miltiadis Gkouzouris

Following several fines imposed by national regulatory authorities on banks such as ING and ABN Amro, the systemic banks started a KYC-race (Know Your Customer) to investigate “suspicious” transactions by looking into the history of account holders and shareholders of companies, the private expenses and possessions of shareholders and even the backgrounds of company’s clients. In this race, the banks have hired hundreds of controllers, who are equipped with a very menacing weapon, namely that of being able to block a company’s corporate bank account or even terminate the relationship.
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The European Securities and Markets Authority, the EU’s securities markets regulator, recently published advice to the European Commission related to data reporting service providers (DRSP). The advice focuses on the fees, fines and penalties applicable to DRSPs subject to EU supervision as well as the criteria determining whether certain DRSPs may be exempted from ESMA supervision (derogation criteria). It aims to provide a simple and clear framework by leveraging on the existing frameworks for Trade Repositories and Securitisation Repositories and by streamlining the approach for the assessment of the derogation criteria. Following the ESAs’ Review, authorisation and supervision of authorised reporting mechanisms (ARMs) and approved publication arrangements (APAs) will transfer from competent authorities to ESMA. Continue reading…

The European Commission has approved the prolongation of an existing Greek scheme aiming at supporting the reduction of non-performing loans of Greek banks on the basis that it remains free of any State aid. The existing asset protection scheme (known by the name of ‘Hercules’), was approved by the Commission in October 2019, for an initial duration of 18 months. Greece notified the Commission of its plan to prolong the scheme for another 18 months, until October 2022.
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The European Central Bank (ECB) will start publishing compounded €STR average rates and a compounded index based on the euro short-term rate (€STR) on 15 April 2021. Publication will take place on each TARGET2 business day at 09:15 CET and will include compounded €STR average rates for tenors of 1 week, 1 month, 3 months, 6 months and 12 months, as well as a compounded €STR index enabling the derivation of compounded rates for any non-standard tenor. The ECB is responding to market feedback in favour of having compounded rates based on the €STR published regularly by a trusted authority. Continue reading…

by František Nonnemann

European Union member states are obliged to transpose the Directive on the protection of persons who report breaches of Union into law by 17th December 2021. It will be the first general whistleblowing regulation in many member states and, therefore, relevant case law will be very important for interpretation. The European Court of Human Rights (ECHR) recently ruled over a whistleblowing case connected with the publication of the suspicions made by the employee. This decision sums-up six crucial principles for whistleblower protection, respectively for the whole whistleblowing process. The question of whether and when the whistleblower is obliged to use internal whistleblowing channels, and the obligation of the whistleblower to verify his/her suspicions as much as possible prior to the publication of the suspicious notice were examined. Continue reading…