REG Reviews

REG Reviews – October 2023

2nd October 2023

Welcome to Your October Edition of REG Reviews!

Last month, the Government announced modernised reforms to insolvency regulation, the Vesttoo scandal underscored the importance of enhanced due diligence among MGAs, asset managers sparked concerns of ‘green hushing’ and AI implementation saw revolutionary transformations to air traffic control and coral reef restoration!

Read these articles and many more, as we bring you all the important news and views from the insurance and financial services world…

Industry News​


Government Announce Modernised Insolvency Regulation Reform

In a significant move, the government has unveiled sweeping reforms to modernise the insolvency regulation framework. These reforms aim to enhance transparency, bolster confidence in the sector, and bridge existing regulatory gaps.

The reforms come on the heels of the Insolvency Service’s release of the government’s response to its consultation on the future of insolvency regulation, which garnered overwhelming support from respondents.

A central pillar of these reforms is the introduction of new regulations mandating that firms offering insolvency services be subject to oversight, aligning the sector with other regulated industries such as audit and legal services.

Presently, only individual Insolvency Practitioners (IPs) are subject to regulation, which leaves regulatory bodies unable to hold firms accountable for failures, creating a critical oversight loophole.

The landscape of the insolvency sector has transformed since the inception of formal regulation in 1986. With the emergence of larger, more intricate firms and business models driven by volume, extending regulatory oversight to firms is a pivotal step forward to close the existing gap in regulatory coverage and provide enhanced protection for individuals and businesses availing insolvency services.

Another groundbreaking aspect of these reforms is the creation of a public register, which will comprehensively list all individuals and firms authorised to provide insolvency services and indicate whether they are subject to any sanctions by their regulatory body.

This will significantly improve transparency, allowing users of insolvency services to make more informed decisions.

While the four recognised professional bodies (RPBs) currently overseeing individual IPs will continue to maintain their oversight, the government will collaborate with them to implement transformational improvements within the existing regulatory framework without requiring legislative changes. This approach is aimed at fostering public trust in the vital work performed by the insolvency sector.

Moreover, the government has proposed the authority to establish a single regulator if the need arises, with ongoing review of the necessity and potential options for such a move.

Additional reforms stemming from the consultation include the revamp of ethical and professional standards for greater adaptability, consultation on a new compensation and redress scheme for those affected by insolvency professionals’ errors or misconduct, and amendments to the Insolvency Practitioner security scheme to enhance creditor protection in cases of fraud or dishonesty.

Kevin Hollinrake, Minister for Enterprise, Markets, and Small Business, emphasised the government’s commitment to ensuring effective regulation of the insolvency profession. He underscored the need for these reforms to modernise the regulatory framework, boost public confidence, and maintain the sector’s global reputation.

The government is poised to enact the necessary legislation when parliamentary scheduling permits. These reforms mark a crucial step forward in ensuring that the insolvency sector remains robust, transparent and capable of instilling confidence among its stakeholders.


Vesttoo Scandal Sparks Call for Enhanced Due Diligence Among MGAs

The Vesttoo insurtech scandal has sent shockwaves through the insurance industry, prompting calls for managing general agents (MGAs) and carriers to enhance their due diligence processes, reports Insurance Age. 

Vesttoo, an Israeli-based insurtech, had provided a platform connecting capacity with fronting insurers. However, the scandal came to light when it was discovered that some of the letters of credit, which were used as evidence of collateral, were fraudulent. 

The impact of this scandal has not been limited to a single region, as some US insurers, including Clear Blue Insurance Group, found themselves entangled in the aftermath. Clear Blue Insurance Group disclosed that it had paid £23 million in commissions to Vesttoo entities and subsequently replaced Vesttoo on all its in-force policies. 

While the fraudulent activities primarily occurred in the US, regulatory consultants are urging MGAs, including those in the UK, to exercise caution and conduct thorough due diligence on all their capacity arrangements. 

Claire King, Risk Director at regulatory consultancy ICSR, emphasised the importance of vigilance in a regulatory update for September. She stressed that “fraud is difficult to mitigate” but called for “appropriate oversight of all business arrangements” as a priority.”

King further emphasised the need for comprehensive interrogation when entering commercial partnerships, especially in the “disruptor” space. She underscored that robust due diligence processes should be non-negotiable for carriers, brokers, and MGAs to mitigate the impact of such events effectively. 

In the UK, regulators have been pushing fronting providers to retain more risk, a move aimed at enhancing the stability of the market. In July, the PRA approved Bridgehaven to begin operations in the UK, targeting the commercial specialty sector. 

The Vesttoo insurtech scandal serves as a stark reminder of the importance of robust due diligence in the insurance industry, where trust and transparency are paramount. 

Both MGAs and carriers are urged to exercise vigilance and thoroughly assess their partnerships to safeguard against fraudulent activities and mitigate potential risks effectively. 


Carrying out due diligence on trading partners needs to go beyond your first party, and the MGA market is a great example of this. We have seen before legitimate companies issuing policies that ultimately fail because companies in their supply chain crash.


Regulators Unveil Bold Measures to Promote D&I in Financial Services

In a move to foster healthier work environments, combat groupthink, and tap into untapped talent, the FCA and PRA have introduced a comprehensive set of proposals designed to champion diversity and inclusion within the financial services sector, with these measures set out in a consultation paper released on 25th September. 

The overarching goal of these proposals is to fortify the safety and stability of financial firms while also deepening their understanding of the diverse needs of consumers. 

By encouraging increased diversity and inclusion within regulated financial services firms, these measures are anticipated to yield more effective internal governance, enhanced decision-making, and superior risk management. 

Central to the proposals are the introduction of novel rules and guidance. These are specifically aimed at categorising misconduct such as bullying and sexual harassment as factors that can jeopardise a healthy firm culture. 

The FCA has emerged as a frontrunner among regulators by characterising non-financial misconduct, including sexual harassment, as regulatory misconduct. This move offers a reinforcement of expectations regarding how regulated firms address such misconduct when evaluating an individual’s fitness for the industry, empowering firms to take swift and appropriate actions against employees found culpable of such behaviour. 

Under the envisioned rules, firms would also be mandated to craft a diversity and inclusion strategy that outlines their methodology for achieving predetermined objectives and goals. Moreover, firms would be required to compile, disclose, and report data pertaining to specific characteristics, along with setting targets to rectify under-representation.  

Sam Woods, Chief Executive Officer of the PRA, emphasised the pivotal role of diversity and inclusion in mitigating groupthink within firms. Woods contended that firms that embrace a wide array of perspectives are better equipped to manage risks effectively, thereby aligning with the PRA’s overarching objective of ensuring safety and soundness within the industry. 

Woods further underlined that bolstered diversity and inclusiveness would render firms more competitive by broadening their talent pool. The proposals chart a path to establish flexible, proportionate minimum standards, with greater onus placed on larger firms.  

Nikhil Rathi, Chief Executive Officer of the FCA, accentuated the global competitiveness of the sector, asserting; “UK financial services have traditionally been a magnet for top-tier talent on a global scale. Fostering increased diversity within firms can serve as a catalyst for attracting and unleashing talent, thereby fortifying the sector’s international competitiveness.” 

Expressing concern over the current diversity landscape in the industry, Rathi agreed that the proposed measures are geared toward prodding major firms to formulate and report on comprehensive improvement plans.

The ultimate aspiration of these proposed rules is to witness augmented diversity and inclusion translating into fortified internal governance, superior decision-making, and heightened risk management within firms. 

These measures are anticipated to contribute significantly to the promotion of safety and soundness within firms, safeguarding policyholders, and delivering improved outcomes for both markets and consumers. 

Stakeholders are encouraged to participate in the consultation period for these proposals, which remains open until December 18, 2023. Regulators eagerly await feedback on the proposed approach, with the insights garnered destined to shape the final rules stated for release in 2024. 


FSB and IMF Issue Recommendations for Cryptoasset Regulation

The Financial Stability Board (FSB) and the International Monetary Fund (IMF) have jointly released a report outlining their recommendations for policy and regulatory responses to cryptoasset activities. The report emphasises the need for a comprehensive approach to address the macroeconomic risks associated with cryptoassets. 

According to the FSB and IMF, jurisdictions should take measures to safeguard monetary sovereignty and strengthen monetary policy frameworks. This would help mitigate excessive capital flow volatility and ensure clear tax treatment of cryptoassets. By doing so, they aim to create a more secure environment for dealing with cryptoassets. 

The report also highlights the importance of implementing the Financial Action Task Force’s (FATF) anti-money laundering and counter-terrorist financing standards to protect financial integrity. 

By adhering to these standards, the risks of criminal and terrorist misuse of the crypto-assets sector can be minimised. 

While the global regulatory baseline is crucial, the FSB and IMF acknowledge that certain jurisdictions, especially emerging markets and developing economies, may need to adopt additional targeted measures to address specific risks in their regions. 

To facilitate the implementation of their recommendations and standards, the report presents a roadmap. This roadmap is a collaborative effort involving international organisations and standard-setting bodies. 

It encompasses initiatives to build institutional capacity beyond G20 jurisdictions and aims to enhance global coordination, cooperation, and information sharing. Addressing data gaps in the rapidly evolving crypto-asset ecosystem is also a priority. 

The FSB, with Klaas Knot, the president of De Nederlandsche Bank, as its chair, was tasked by the G20 to promote cooperation among jurisdictional financial authorities. Their goal is to ensure that cryptoasset activities are subject to robust regulation and supervision commensurate with the financial stability risks they pose while encouraging responsible innovation. 

The FSB operates from its secretariat in Basel, Switzerland, which is hosted by the Bank for International Settlements. This collaborative effort between the FSB and IMF signifies a concerted response to the challenges posed by the growing cryptoasset sector, aiming to strike a balance between innovation and financial stability. 


FOS Criticises Payout Delays Amidst Surge in Complaints

Amid a surge in complaints regarding building, car, and motorcycle insurance, the Financial Ombudsman Service (FOS) has voiced its disapproval of insurance companies prolonging claims payouts.  

CEO, Abby Thomas, delivered a stern rebuke to insurers for what she described as “unacceptable” behaviour. She emphasised the service’s firm stance that insurance providers should treat their customers fairly and process claims promptly. 

During the period from April to June, the FOS recorded a significant uptick in complaints, receiving 3,869 cases related to car and motorcycle insurance and 1,776 cases linked to buildings insurance.  

This marked a notable increase compared to the same timeframe in 2019 when the FOS registered 2,626 complaints about car and motorcycle insurance and 1,275 complaints about buildings insurance.

 The FOS recognised that multiple factors contributed to these rising complaint numbers, beyond just delays in claims payouts. These factors encompassed issues such as the availability of contractors affecting repair timelines and difficulties in sourcing necessary materials. 

The FOS operates on a financial year that spans from April to March. In this current fiscal year, there has been a notable surge in insurance-related complaints during the first quarter, following a substantial 19.9% increase in the previous year, 2022/23.  

Particularly striking is the doubling of travel insurance complaints in the latest data. The figures have escalated from 504 complaints in the first quarter of 2022/23 to a noteworthy 1,101 during the same period this year.

The FOS reported that this marks the highest number of Q1 travel insurance complaints in over a decade. 

Abby Thomas stated; “Whether it’s your car, your holiday or your home, having the right insurance is fundamental and should offer people the peace of mind that, when things go wrong, they’re protected. Where these complaints are driven by insurers delaying paying out on claims that’s unacceptable. We expect insurers – as well as other businesses – to treat their customers fairly and in a timely manner.” 

The FOS has compiled a list of the top five most complained-about financial products. In the third position is car and motorcycle insurance, followed by buildings insurance in fifth place. 

The remaining spots on the list include current accounts at the top, credit cards in second place, and hire purchase (motor) in fourth place. 

During the first quarter of this year, the FOS received a total of 43,953 complaints, marking an increase from the 35,029 complaints during the same period in 2022.  

Of the complaints resolved, the FOS upheld 37%, compared to 34% in the first quarter of the previous financial year.  

The uphold rate for car and motorcycle insurance increased from 29% to 36% between the two periods, while for buildings insurance, it rose even higher to 40% from 31%, surpassing the overall FOS average. 


Artificial Intelligence Implemented to Revolutionise Air Traffic Control

UK researchers have created a computer model of air traffic control, known as a ‘digital twin’, where AI directs all flight movements instead of human air traffic controllers.

This project, named Project Bluebird, is a collaboration between National Air Traffic Services (NATS), the Alan Turing Institute, and Exeter University. It’s funded by the UK Research and Innovation agency.

The ‘digital twin’ represents the airspace over England and is part of a £15 million effort to explore AI’s potential role in advising and potentially replacing human controllers in the future. The initial findings of this research were presented at the British Science Festival in Exeter.

Introducing AI into air traffic control offers several advantages, including the potential to guide aircraft along more fuel-efficient routes to reduce the environmental impact of aviation.

It can also help in reducing delays and congestion, especially at busy airports like London’s Heathrow. Additionally, there’s a shortage of air traffic controllers, and their training typically takes three years.

The researchers are leveraging NATS’ comprehensive database of past flight records to train their AI system, making use of valuable real-world data to improve its performance which includes 10mn flight paths.

Nats research leader on Bluebird, Richard Cannon stated; “We have been preparing for this over the past decade by recording air traffic movements over the UK.”

Human air traffic controllers and AI agents are now collaborating to manage aircraft within the digital twin of UK airspace created for Project Bluebird. This partnership involves utilising precise simulations of real-world air traffic to test and refine the capabilities of AI in air traffic control.

Cannon added; “By the end of the project in 2026, we aim to run live ‘shadow trials’ in which the AI agents will be tested on air traffic data in real time, allowing a direct comparison with the decision making of human air traffic controllers.”

The AI system will not have the authority to make final decisions about aircraft routing.

Instead, it will serve as a tool to assist human air traffic controllers in their decision-making processes. If the research proves successful, it is likely that AI will be involved in more extensive operational trials over several years before any consideration of implementing a fully computer-controlled system.

Currently, Nats operates a powerful computer system for processing data in one of the world’s busiest airspaces, but it does not yet employ AI to predict future flight trajectories.

Last month, the existing air traffic control system experienced a failure over the bank holiday weekend due to its inability to recognise a flight plan with contradictory data, resulting in travel disruptions.

The Civil Aviation Authority is conducting an investigation into the incident, and airlines are seeking compensation from Nats for the more than 1,500 canceled flights.

Regarding whether AI could have prevented this system failure, Cannon and Everson refrained from commenting.

However, they emphasised that AI has the potential to enhance the resilience of air traffic control systems and reduce the risk of failures when confronted with unexpected events.

The ‘digital twin’ created by Project Bluebird encompasses the London flight information region, which includes the airspace over a significant portion of England and Wales.

The AI system developed for this project is responsible for directing aircraft while maintaining a required vertical separation of 1,000 feet and horizontal separation of 5 nautical miles. It also ensures the safety of each flight path, guaranteeing there is no risk of collision for at least 15 minutes, even if radio communication with the pilot is lost for any reason.


'Green Hushing' Concerns Emerge in Asset Management for Sustainable Funds

In the first half of 2023, asset managers have been removing the term “sustainable” from the names of their funds, a response to growing regulatory and reputational concerns.

Data from consultancy firm Broadridge reveals that 44 sustainable funds have dropped the label from their brand names, marking a contrast to 2022 when 99 funds added “sustainable” to their names.

This shift is attributed to several factors, including the absence of a specific methodology for calculating sustainable investments under the Sustainable Finance Disclosure Regulation (SFDR) and the publication of an EU consultation regarding sustainable fund names.

According to data from Broadridge focusing on sustainable funds domiciled in Europe, ABN Amro’s asset management division removed the term “sustainable” from the names of 14 funds in January of this year.

The decision was attributed to a desire for more clarity from the European Securities and Markets Authority (ESMA) regarding the use of “sustainable” in fund names.

ESMA initiated a consultation in November of the previous year as part of its efforts to establish guidelines for the use of sustainability-related and environmental, social, and governance (ESG)-related terms in fund names.

Under these proposed guidelines, a fund would only be allowed to incorporate ESG-related terms into its name if 80 percent of its investments align with environmental or social characteristics or sustainable investment objectives.

The proposed guidelines from ESMA suggest that funds with “sustainable” or related terms in their name would need to meet an additional 50 percent threshold related to sustainable investments. However, these guidelines have not yet been finalised or published.

Regarding ABN Amro, the spokesperson mentioned that their “light green” Article 8 funds use the ESG label, while their Article 9 funds incorporate “sustainable” in their brand name, in accordance with applicable laws and regulations.

Société Générale also removed “sustainable” from the brand names of eight of its sustainable funds in March 2023. The decision was described as a cautious move, with “sustainable” temporarily removed from both Article 8 and Article 9 funds.

Several asset management firms have removed the term “sustainable” from the names of their funds in response to regulatory and reputational concerns.

A spokesperson for UBP Asset Management mentioned that they proactively changed the names of seven funds to “responsible” in December 2022 to avoid potential misunderstandings and ensure that fund names accurately represent their investment strategies. Regulatory concerns regarding compliance with sustainability-related regulations have motivated these changes.

Detlef Glow, Head of Europe, Middle East, and Africa Research at Refinitiv Lipper, noted that ESMA’s stricter stance on sustainable products under the Sustainable Finance Disclosure Regulation (SFDR) has prompted firms to alter fund names.

Raza Naeem, a Partner at Linklaters, also highlighted that ESMA’s proposed fund naming guidelines set high eligibility standards for funds using “sustainable” in their name.

He stated; “Firms need to be careful that their funds and their underlying investments are not inadvertently perceived as sustainable investments such that they trigger these additional SFDR obligations.”

Sam Duncan, the creator and CEO of Net Purpose, a platform dedicated to sustainable and impact investors, highlighted that the ambiguity surrounding the definition of sustainable investment has amplified concerns about potential regulatory and reputation risks associated with greenwashing.

Adrian Whelan, who serves as the Global Head of Market Intelligence at Brown Brothers Harriman, emphasised that the regulatory and reputational risks related to making ambitious claims and fulfilling ESG commitments have reached unprecedented levels. This is particularly due to ongoing developments in regulatory definitions within SFDR.

The practice of managers intentionally diminishing their ESG credentials, commonly referred to as “green hushing” and “green bleaching,” has emerged as a substantial concern, on par with the issue of greenwashing.

Glow anticipates a surge in name changes once the new naming guidelines come into effect in the third quarter of this year.

During the period from January to June 2023, there were a total of 612 instances of fund renaming.


BIS Sounds Alarm on Leveraged Bets in US Treasuries Market

Leveraged bets in the colossal $25 trillion US Treasuries market are raising concerns of potential market dislocation, according to a warning issued by the Bank for International Settlements (BIS). This caution comes as the latest in a series of high-profile alarms regarding crowded hedge fund strategies that could lead to instability. 

In its quarterly report, the BIS spotlighted the growth of the so-called basis trade, wherein hedge funds aim to exploit minute differences between the prices of Treasury bonds and their corresponding futures in the market. 

The BIS articulated its concerns, stating; “The current build-up of leveraged short positions in US Treasury futures is a financial vulnerability worth monitoring because of the margin spirals it could potentially trigger.” 

The report emphasises the leverage employed in the futures market to post margin and the potential for “margin deleveraging” to disrupt core fixed-income markets.  

The US Treasuries market is globally significant as it dictates borrowing costs for US government debt, with $750 billion traded daily in August alone.

Instances of leveraged Treasury positions being unwound during periods of stress, such as September 2019 and March 2020, caused dramatic fluctuations in the Treasury and repo markets, prompting the Federal Reserve’s intervention. 

Supporting its claims of a growing trade build-up, the BIS cited data from the US Commodity Futures Trading Commission revealing record levels of short positions in Treasury futures contracts in recent weeks, with short positions valued at approximately $600 billion. 

This warning from the BIS follows similar alerts from other regulatory bodies. In August, the Federal Reserve noted an uptick in basis trades and the accompanying financial stability risks. 

More recently, the Financial Stability Board, which consists of top finance ministers, central bankers, and regulators worldwide, cautioned against hedge funds using high levels of synthetic leverage (debt generated through derivatives), citing potential market instability. 

The basis trade is primarily employed by hedge funds using relative value strategies, involving long positions in the cash market and short positions in the futures market, funded through repurchase agreements. 

While the precise size of the basis trade remains unclear, weekly data from the CFTC on short positions in Treasury futures serves as a proxy indicator. Leverage is a key component, allowing hedge funds to amplify their profits despite the small differences between cash and futures bonds. 

The BIS also noted elevated leverage in futures positions, emphasising the potential consequences if highly leveraged futures investors are forced to liquidate their positions during adverse market movements, potentially triggering further market turmoil. 


FCA's 'Big Bombshell' Shakes Up Insurance Commissions

The insurance industry is bracing itself for a seismic shift in the wake of the Financial Conduct Authority’s (FCA) investigation into property buildings insurance earlier this year.

Michael Sicsic, a regulatory consultant and former Head of General Insurance and Supervision at the FCA, spoke at Insurance Age’s Broker Breakfast event in Manchester on September 13th, where he discussed the implications of the FCA’s findings. 

In April, the FCA released a startling report that exposed incompetence and unjustifiable remuneration within the buildings insurance market. The report not only sent shockwaves through the industry but also prompted the FCA to take action.

Their proposed measures include a near ban on paying commissions to third parties and a requirement for full disclosure regarding the commissions received from carriers for buildings insurance. 

However, Mr. Sicsic asserted that the FCA’s scrutiny isn’t confined solely to the buildings insurance sector; it extends to the entire commission-based model within the insurance industry.

He emphasised the FCA’s concerns about brokers receiving higher commissions without offering additional services, merely because premiums have increased.

He pointed out that the key question is whether such remuneration can be justified in relation to the level of service provided. 

“The big bombshell in this sector,” he warned, “is if the FCA decides that increased remuneration due to commission hikes, driven by premium increases, is unjustifiable.”  

The FCA’s investigation into the buildings insurance market was prompted by complaints from leaseholders in high-rise flats who faced exorbitant insurance premiums following the Grenfell Tower disaster in 2017. This disaster exposed issues related to flammable cladding and its role in the fire’s spread, leading insurers to shy away from covering buildings with similar materials. 

Mr. Sicsic urged all insurance firms to review the FCA’s report on multi-occupancy buildings insurance, emphasising that the key takeaway is how firms justify their remuneration structures, regardless of their specific sector involvement. 

In addition to the commission-related concerns, Mr. Sicsic highlighted the FCA’s focus on helping customers facing financial difficulties.

The FCA has issued guidance to insurance companies, urging them to identify customers in financial distress and enable them to maintain insurance coverage they may otherwise struggle to afford. 

Furthermore, the FCA is closely scrutinising premium finance, appointed representatives, and the value of insurance products. Firms are now required to demonstrate the value of their products, and principals overseeing appointed representatives must exercise additional oversight, treating ARs as if they were their own employees. 

In short, the FCA’s investigation into property buildings insurance has triggered a broader review of commission structures across the insurance industry.

This development underscores the regulator’s commitment to protecting consumer interests and maintaining transparency within the sector, making it essential for all insurance companies to closely examine their practices and adapt accordingly. 


Reviving Coral Reefs: Robot Innovation Offers Hope

Coral restoration initiatives have traditionally relied on the transplantation of small corals nurtured in nurseries onto ailing reefs. Unfortunately, this process is both time-consuming and expensive, leaving numerous at-risk reefs without the necessary intervention. 

Dr. Foster, operating in the shallow waters of the Abrolhos Islands, is pioneering an innovative method designed to expedite reef revival. Her approach involves grafting coral fragments into small plugs, which are then inserted into specially crafted bases.

These bases, resembling flat discs with grooves and handles, are fashioned from a limestone-type concrete to ensure affordability and ease of deployment, whether by divers or remotely-operated vehicles. 

Initial results have been promising. Dr. Foster’s team has deployed multiple prototypes of these coral skeletons across four different species, all of which are displaying robust growth. This technique effectively bypasses several years of calcification growth required to reach the desired base size. 

In her pursuit to enhance this groundbreaking process, Dr. Foster has founded a start-up company called Coral Maker. The company is now collaborating with Autodesk, an engineering software firm based in San Francisco, to integrate artificial intelligence into their efforts.

Collaborative robots, or ‘cobots’, equipped with robotic arms, are being trained to graft or adhere coral fragments to seed plugs and place them within the specially designed bases, guided by vision systems that recognise and handle the unique shapes of coral fragments. 

While the progress in the lab has been promising, the transition to real-world applications presents challenges, including the delicate handling of living coral in potentially harsh environments. Additionally, the costs associated with such technology remain a concern.

Coral Maker is banking on potential demand from the tourism industry and plans to issue biodiversity credits, similar to carbon credits, to offset these costs.  

Dr. Cathie Page, a scientist at the Australian Institute of Marine Science (AIMS), underscores the importance of substantial investments in time, finances, and human resources to safeguard coral reefs in the face of climate change. AIMS and other organisations are exploring alternative approaches, such as coral seeding, to scale up restoration efforts. 

One novel strategy involves sound, as marine life on reefs produces various noises that provide insights into reef health. Researchers have trained computer algorithms to analyse underwater audio recordings, detecting patterns that indicate the state of a reef.

In Australia, AIMS is experimenting with underwater loudspeakers on damaged reefs, playing healthy sounds to attract fish and enhance reef recovery. 

While the challenges facing coral restoration efforts are immense, researchers and innovators like Dr. Foster remain committed to finding creative solutions to ensure the survival of these critical ecosystems.

It’s important to recognise that there is no single solution to this complex ecological problem, but ongoing efforts offer hope for the future of coral reefs. 


UK Regulator Finds No 'Debanking' Proof for Politicians' Views

A review conducted by the Financial Conduct Authority (FCA) in the UK has reportedly found no evidence to support claims that politicians are being denied bank accounts due to their political views.  

The FCA initiated this review in August following concerns raised by former UK Independence Party leader Nigel Farage, who alleged that his accounts with Coutts, a private bank, were at risk of closure because his views didn’t align with the lender’s stance.  

This controversy led to additional complaints from politicians about their interactions with financial institutions, prompting the government to request the FCA’s investigation. 

The FCA is preparing to release its findings in the coming days, which will reportedly show that political views were not the primary reason for personal account closures across the 34 banks and payment companies included in the review. The data examined by the FCA spans from June 2022 to June 2023. 

Nigel Farage stated to the Financial Times; “This is farcical. There are plenty of examples of prominent Brexiteers being ‘debanked’. The FCA are part of the problem.” 

Nigel Farage made headlines when he revealed that his bank accounts were on the verge of closure by an unnamed “prestigious” financial institution in late June, later confirming it was Coutts.  

However, his accounts with Coutts remained active by the end of July, and he mentioned that the bank had offered to let him continue using their services. 

The FCA is aware that the data used in its review was compiled rapidly, and not all banks have robust systems for monitoring and recording the reasons behind account closures or refusals.

Additionally, the FCA plans to conduct further investigations to ensure that banks and payment companies do not unfairly deny access to their services.  

There was some concern within Whitehall that the FCA did not uncover data indicating that ‘debanking’ individuals for their political views was a widespread issue. 

In July, Farage made public excerpts from a dossier created by Coutts while it was considering closing his accounts. The bank’s dossier stated that serving him would not be “compatible with Coutts” due to his views being “at odds with our position as an inclusive organisation.”  

This controversy ultimately resulted in the resignation of Alison Rose, the CEO of NatWest, which is Coutts’ parent company. Rose acknowledged sharing information about Farage’s accounts with a journalist. 

This situation prompted politicians from various parties, with Prime Minister Rishi Sunak leading the charge, to denounce the reported practice of banks closing accounts based on individuals’ political views. 

Sunak stated last month; “People need to be able to have lawfully held views that we might not agree with, but they shouldn’t be denied financial services because of them.” 

The FCA is conducting a distinct review of how financial services firms treat politically exposed persons (PEPs), a category that encompasses politicians and government officials. This review is expected to be finalised in the upcoming year. 

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