You face greater scrutiny and more intrusive regulation by your relevant local regulatory bodies than ever before; increasingly, on an international and multi-jurisdictional basis. The management of these regulatory matters requires a significant understanding of these bodies and environments. You will benefit from having advisors one your side with first-hand knowledge and experience of the inner workings of the regulators and their approach.

Our financial services lawyers possess extensive experience in planning and preparing for regulatory investigations and enforcement actions. We are able to leverage the insights we’ve gained from our broad client-base, with those in banking (encompassing consumer and institutional banking services), fund management, investment management, investment advisory services, prime brokerage services, securities lending, broker-dealer services, and other areas of finance, to help you in the enforcements and investigations you may face.

We can routinely assist you with a wide range of investigation topics including those relating to financial crime (money laundering and bribery/corruption), financial product mis-selling, advertising and financial promotion of products and services, insider-trading misconduct and/or other market abuse situations, corporate governance effectiveness and individual responsibility reviews, and the requirements for ensuring appropriate custody of customer/client assets held by financial institutions, to name a few. Our lawyers have handled numerous matters involving consumer financial products and services before regulatory agencies such as the CFPB, FTC in the United States and the FCA in the United Kingdom. We also defend banks and non-banks in all phases of the investigation process.

Our broker-dealer and investment adviser practice is robust, with nationwide capabilities. We regularly work with all types of industry participants and have substantive experience with issues traditionally faced by our clients, as well as with those that are new or non-traditional, such as FinTech, cryptocurrency, and privacy and data protection. Our versatility enables us to handle issues in different contexts, including:

• Formation, registration, and membership
• Regulatory and compliance counseling
• Transactions, offerings, and operations
• Internal reviews and investigations
• Regulatory investigations and enforcement
• Customer, industry and employee disputes

Since the 2008/2009 global financial markets crisis, policymakers have focused heavily on regulations related to the trading and clearing of derivatives including derivatives on various commodities, such as interest rates and various indices, as well as energy commodities, agricultural commodities, metals, and other related derivatives. Large and small entities, both financial and commercial, which trade and hedge in these important markets are facing the introduction of broader licensing and registration requirements; a plethora of new record-keeping and reporting obligations; new rules on margin, regulatory capital and position limits; and significant extensions to regulatory enforcement regimes covering manipulation and market abuse. In addition, global regulators now increasingly regulate physical commodity markets that underlie derivatives markets. 

Financial institutions operating in the UK and Continental Europe are required to comply with a range of regulatory rules and regulations across different countries and regimes, which can be challenging. In addition, the regulatory landscape is constantly evolving as new rules and practices emerge. Our team works with clients to enable them to anticipate, navigate, plan and implement new regulatory rules; address risk management concerns; structure transactions, capital and liquidity to meet business and regulatory requirements; and develop policies and procedures to comply with UK and Continental European requirements.

Our financial services regulatory team is one of the largest focused and partner led groups in the UK, offering you and any of our global clients, a broad range of support on UK and European regulatory matters.

Our highly-regarded lawyers interact on a regular basis with the Financial Conduct Authority and the Prudential Regulation Authority, as well as other UK and European regulators. Our team includes lawyers who have previously worked for financial services regulators and who are involved with most of the UK’s influential industry groups, in the field.

We regularly advise on:

• The impact of the Markets in Financial Instruments Directive 2, from reviewing gap analysis to advising on scope changes to assisting with the preparation of new policies and procedures
• Aspects of the European Market Infrastructure Regulation and in particular, on the scope and application of EMIR to particular business’ lines, as well as advising firms which are in scope on their obligations
• Conduct requirements including assisting with meeting the FCA’s and PRA’s requirements under the conduct of business, CASS and systems and controls rules
• The Senior Managers Certification Regime and helping you understand the obligations to which your senior staff will be subject
• The impact of the Market Abuse Regulation and helping you create appropriate Chinese Walls and systems and procedures for ensuring compliance with MAR
• Aspects of the Capital Requirements Regulation, including issuing opinions on the regulatory treatment of specific instruments and advising on the risk retention rules and of BRRD
• All aspects of the Alternative Investment Managers Directive, European private placement regimes, and advising on the impact of Packaged Retail and Insurance-based Investment Products Regulation
• The impact of the Payment Services Directive 2 and the Interchange Fee Regulation, including the scope changes and advising on changes to be made to terms and conditions
• The regulation of FinTech and crowdfunding businesses

Rule breach notifications,acting for you if you are subject to FCA/PRA investigations, and supporting you with regard to Skilled Person Reports

As a fund manager, you likely face an array of different, and often competing, global regulations. Reed Smith’s fund management regulatory team has vast experience advising fund managers on a wide range of regulatory matters that affect the industry, including registrations, regulatory filings and disclosures, management policies and procedures, conflicts, examination, and enforcement on a global basis.

Fund managers of all sizes face a growing array of different, and often competing, global regulations. The compliance burden for investment managers and their private fund clients, in particular, has increased substantially and will continue to grow going forward. Accordingly, CCOs and general counsels for fund managers face an ever-growing workload to ensure compliance with applicable laws and regulations.

As with all other areas of regulated activity, if your business develops, designs, manufactures and sells insurance products, you are facing ever-increasing amounts of regulations, regulatory scrutiny and enforcement actions which could possibly result in large fines and even sanctions against individual executives and employees.

This greater regulatory focus comes at a time when you are dealing with the pressures of being innovative enough to create new products. For example, one that can cope with the challenges of providing sufficient income to ageing populations in a historically low interest rate environment – where traditional annuity products might no longer be the automatic default. Managing these competing pressures is like walking a tightrope, balancing the need to innovate against the compliance obligations being placed on your business. We can help you strike that balance.

Our team brings a considerable amount of experience to bear, advising you in relation to regulatory issues involving a wide range of insurance-related products including variable annuities, variable life insurance, indexed annuities, market-value-adjusted products, synthetic or contingent annuities, retail-focused insurance products, and other innovative products.

Our collaborative approach to life insurance counselling, which combines our insurance products counselling group, insurance litigation group and ERISA benefits group, is exemplified by the work we are already doing for a group of insurance companies that are developing mutual funds, variable annuities and other investment products and distributing them primarily through independent distribution channels. For these clients, just as we can do for you, we are assisting with the development and implementation of compliance procedures relating to the critically important new Department of Labor Fiduciary Rule.

The nature of our experience ranges from advising on the design and development of the products, the regulatory status of the products, issues arising out of marketing the products in different jurisdictions and ensuring compliance in sales practices.

We can handle enforcement issues and regulatory investigations concerning insurance-related products such as issues arising out of the sale of payment protection insurance which involves enforcement action by regulators, providing evidence to government commissions investigating sales practices and advising on claims against insurers seeking to recover for losses suffered as a result of regulatory action and the knock-on litigation.

Our experience in this arena also includes wholesale products, such as insurance-based or other hedging products, sold to businesses, like yours, to help mitigate your downside risk and exposure (including products sold to hedge foreign exchange and interest rate risk). Coupled with our unparalleled Insurance Recovery lawyers, we have also built up a detailed understanding of insurance broking. Thus, our insurance and regulatory lawyers often work together on regulatory issues involving insurance products and brokers.

Financial and commercial entities that interface with market infrastructure can encounter an array of risks to assess, often relating to regulatory, commercial, credit and data/confidentiality issues. Market infrastructure and financial utilities providers can face regulatory and design issues around the development, offering and expansion of their services. As in other markets after the financial crisis of 2008/2009, such entities like yours became subject to increased regulatory oversight, both within local jurisdictions and internationally. Increasingly this regulatory focus is coordinated across multiple jurisdictions and commands a coordinated multi-jurisdictional, legal response. We are the lawyers who can provide that steady assistance.

The infrastructure elements on which financial markets rely include exchanges and trading platforms; clearing houses and agencies; central securities depositories; payment and settlement systems; compression, reconciliation and trade processing facilities; reporting mechanisms and trade repositories; transparency platforms; price reporters and benchmark administrators; software service providers; and market data vendors. These elements have all been the subject of a raft of post-crisis regulatory developments that are changing how we view the financial markets – from mandatory clearing and reporting rules in the OTC derivatives world, to the development of new regimes for exchange and clearing house services, to the imposition of position limits and position-reporting requirements.

Our team can provide you with sophisticated and informed regulatory services, whether you are a user or provider of market infrastructure. We have a wide range of market infrastructure providers among our clients, acting for exchanges, clearing houses, and trade repositories, as well as banks, investment banks, traders and portfolio managers that use their services – so we know that we can live up to your expectations and meet your needs.

In the aftermath of the 2008/2009 financial crisis, international and national regulatory bodies generated a considerable amount of auxiliary regulation for wholesale banking and financial services markets. Regulators have been particularly concerned with market conduct, as well as market infrastructure, and their gaze is ever-widening with previously less regulated markets that are now coming into focus, such as commodities and energy.

In the U.S. alone, there have been extensive and on-going Dodd-Frank Act reforms, most notably impacting in the commodity and derivatives markets. In Europe, as a wholesale financial services client, you are faced with the extensive new requirements under EMIR, MiFID 2, MAR, CRD4, SFTR, the Benchmark Regulation and beyond.

Following the benchmarking scandals of recent years, wholesale financial services companies, like yours, are encountering waves of new conduct and organizational requirements in areas which go beyond the traditional coverage of financial markets regulation. As you participate in the wholesale markets and as these new rules take effect, you are under pressure to invest in high tech systems and controls, to review the structure and organization of your businesses and to remodel and reassess your use of capital. The challenges are endless as you are also faced with new senior management responsibilities, which brings more individual accountability, a sharper focus on conduct risk, as well as regulatory capital constraints. 

At Reed Smith, our group financial regulatory lawyers advise the full spectrum of firms and institutions operating in the wholesale banking, financial services, commodity and derivative markets. In terms of the wholesale financial services market, we regularly help large-scale players, like you, to navigate the myriad of regulatory requirements impacting their transactions with, for example, banks, insurers, fund managers, and broker-dealers. We can also advise you on capital efficient and regulation light ways to structure your organization, to ensure that you are compliant with new requirements in a commercially viable manner.