Update

Prudential Regulation

	Look out for…

The latest edition of the FSA's Handbook Development newsletter (No 85), indicates, inter alia , that the following consultation papers, discussion papers and feedback statements, which are likely to be of interest to FOA members, are due to be published over the coming months:

* As explained in Handbook Development newsletter No 47, 3 star CPs are “high-profile consultations, and major policy changes affecting a large number of consumers or financial sectors,” 2 star CPs contain “other important policy changes” and 1 star CPs contain “minor changes.”

	Indirect tax seminar

The FOA is arranging a seminar in conjunction with Deloitte to address Indirect Tax concerns. At present, the agenda includes:

Emission Trading - VAT treatment of Certified Emissions Reductions

Metal and other physical commodity trading

New Exchange Contracts - E.G. LME 'mini' contracts

Islamic Finance

Terminal Markets Order Update

Cross-Border Variations of VAT Treatment of Options

EU Force of Attraction rules

Previous seminar sessions on current issues have been oversubscribed. If you wish to register your interest in this seminar in advance and/or suggest additional topics for inclusion then please contact Simon Andrews.

The date and location of this seminar have yet to be finalised.

	Impact analysis of applying the CRD to specialist commodity dealers

The KPMG report on the “Impact of the Capital Requirements Directive on Commodity Market Participants” has now been published.

The full report is available on the FOA website at - http://www.foa.co.uk/publications/kpmg_crd_report_mar07.pdf.

Printed versions of the report are available from the FOA on request.

If you have any questions about the findings and observations of the report or any related topic please contact Simon Andrews.

	Netting agreement legal opinions

The FOA maintains a Master Netting Agreement supported by a library of legal opinions to ensure its validity in a range of different global jurisdictions. The MNA and the supporting legal opinions are available to members for a one off charge.

Work has recently commenced on an update of both the MNA and the legal opinions in conjunction with the wider update of FOA documentation in preparation for MiFID and the CRD.

Any members who do not currently subscribe to the library but would be interested in further information should contact Simon Andrews. Further details on the current library can be found here -http://www.foa.co.uk/documentation/netting/index.jsp.

	FSA publishes SREP reference manual

As noted above, the FSA has recently published their internal SREP reference instructions. Of particular note are the confirmations that the FSA does not intend to use Pillar 2 to claw back capital saved by firms under Pillar 1, and that the approach to risk in Pillar 2 will be “holistic” and risk focused.

The reference manual can be found at[ http://www.fsa.gov.uk/pages/Library/Other_publications/Miscellaneous/2007/pillar2_framework.shtml ]

It is understood that the FSA is considering publishing high level feedback resulting from ICAAP submissions received to date.

	Potential CRD forum – Member feedback requested

With the publication of the FSA's SREP guidance, the CRD is once again becoming a topical issue. Subject to interest , the FOA is planning to hold a CRD forum to discuss the new reporting requirements introduced in January 2007, ongoing ICAAP concerns and other issues.

If you would be interested in attending such a forum and have any particular areas of concern that you would like to see included on the agenda, please contact Simon Andrews.