Finance Monthly December 2019 Edition

8 www.finance-monthly.com NEWS - MONTHLY ROUND-UP THE MONTHLY ROUND-UP FCA BANS PROMOTING OF MINI-BONDS TO SMALL INVESTORS The Financial Conduct Authority (FCA) has an- nounced it is set to ban the marketing of speculative mini-bonds to small inves- tors using its product inter- vention powers. The news comes after re- cent debacle surrounding the collapse of London Capital & Finance. The ban, set to be introduced on 1 January, will come just as consultancies and financial managers encourage clients to place money into ISAs be- fore the end of the tax year. Currently, various mini- bonds have ISA status and would, therefore, be includ- ed in said advice, however, regard of the recent admin- istration of London Capital & Finance, whereby over 11,000 customers were left in debt and at a loss when the financial management firm collapsed after peddling 6.5% to 8% yearly returns on mini-bonds. Subsequently, the FCA was the FCA believes many con- sumers may not have the expertise required to under- stand and therefore appro- priately evaluate the risks in- volved in certain mini-bonds. According to reports, the ban will exclude mini-bonds that raise capital for individ- ual companies or properties. The intervention comes in under immediate scrutiny and was heavily criticised for not taking action when warned about the firm’s op- erations three years prior. Both the FCA and LC&F are now under investigation by a leading high court judge, Dame Elizabeth Gloster, and the SFO respectively. HEAD OF WESTPAC BANK QUITS FOLLOWING MONEY LAUNDERING SCANDAL The head of Australia’s sec- ond-largest bank, Westpac, has quit following a money- laundering scandal the bank became involved in. Chief Executive of Westpac, Brian Hartzer plans to step down next week after the bank was sued by Australian regulators for an alleged 23 million breaches of counter- terrorism and money-laun- dering regulations involving $11bn worth of transactions. Controversy has also risen surrounding the $2.7 million payout Hartzer will receive, as confirmed by Westpac last week. BBC reports that the major- ity of the infractions involved late reporting of overseas transactions, and the Aus- tralian Transaction Reports and Analysis Centre (Aus- trac) claims it has also linked several of the transactions to “child exploitation risks“. Westpac, also the oldest bank in Australia, allegedly failed to monitor the accounts of an Australian convicted sex offender who had been sending money over to the Philippines. The bank’s Chairman, Lind- say Maxsted has rejected the notion that more board members at the bank should be axed. The Australian Government has described the reported breaches as “very serious” and the Labor opposition spokesman, Jim Chalmers, says the failures of Westpac are “nothing short of dis- graceful.” OPEN BANKING IS GOING GLOBAL WITH 87% OF COUNTRIES HAVING OPEN APIS panies using affiliated services from a single dashboard using specific applications on a smart- phone. The leading jurisdictions in Open Banking include the United Kingdom, Australia and the Euro- pean Union. About it, LearnBonds explained: “The United Kingdom leading the way in Open Banking ex- plains why so many UK- based challenger banks and tech startups like Revolut, Monzo, Starling and Curve are thriving in the banking sector.” Countries such as the United States or New Zealand are considered More than 87% of coun- tries have already es- tablished some form of Open APIs in the bank- ing industry. According to LearnBonds, there are over 10,000 financial institutions around the world with open banking implementations. Online Banking is a glob- al trend that banks and institutions are currently following to improve the current connections across digital services. In addition to it, Open Bank- ing is the representation of a next-generation business model in an open data economy. With Open APIs, banks can be easily linked to fi- nancial technology com- ‘Beginners.’ These are countries and jurisdic- tions with small or no progress on regulation or standards. Meanwhile, Switzerland, India or China are con- sidered ‘Risers’ because the whole market is un- regulated but they are registering Open APIs and evolving standards. To understand which countries are currently at the forefront of Open Banking, the report takes into account four differ- ent factors that include the spread of Open APIs, regulatory requirements, standardisation initia- tives and the presence of a central TPP regulatory body.