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Financial Regulatory Developments Focus
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The following posts provide a snapshot of the principal U.S., European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.

  • Basel Committee on Banking Supervision Publishes Consultation on Credit Valuation Adjustment Risk
    11/28/2019

    The Basel Committee on Banking Supervision has published a consultation paper seeking feedback on its final amendments to the credit valuation adjustment risk framework set out under the Basel III standards. The paper provides a detailed description of the amendments and sets out the proposed revised standards. Responses to the consultation should be submitted by February 25, 2020.

    Read more.
  • European Central Bank Publishes Paper on Stablecoins
    11/28/2019

    The European Central Bank has published a paper providing an overview of the stablecoins market and looking ahead to its future development. The paper contains no binding rules or guidance and is designed for information purposes only. It outlines how stablecoins have emerged as an alternative to highly volatile cryptoassets, such as Bitcoin, by incorporating "stabilization" mechanisms that back the value of the stablecoins by tying them to underlying assets such as fiat currencies or commodities. Facebook's unveiling of its Libra stablecoin has attracted much attention from regulators, demonstrating the ongoing challenges faced by the cryptoassets. It goes on to describe the different types of stablecoins, the current status of stablecoin initiatives and considers potential use cases for stablecoins, such as transferring money without using financial institutions or cash. The ECB determines that it remains to be seen how the more innovative types of stablecoin will develop given their greater volatility and foresees that improvements in stablecoin governance may need to be made.

    Read more.
  • UK Conduct Regulator Consults on Guidance on Managing Inside Information
    11/27/2019

    The U.K. Financial Conduct Authority has published a newsletter for primary market participants seeking feedback on draft best practice guidance for government departments, industry regulators and public bodies on the identification, control and disclosure of inside information. Comments on the best practice note should be submitted by January 15, 2020.

    The FCA determined that new, up-to-date guidance on inside information was required to reflect recent legal and regulatory developments, including the introduction of the Market Abuse Regulation in July 2016. Certain of these developments are directly applicable to the actions of government departments, industry regulators and public bodies. The guidance is targeted at these entities and feedback on the guidance is therefore sought particularly from them. The note sets out certain relevant aspects of the Market Abuse Regulation and provides suggestions for how these entities can identify inside information that they become privy to, including questioning whether the information has been made public, whether it is precise and whether a reasonable investor might use it as part of the basis of an investment decision. It also provides suggestions on controlling and handling inside information once it has been identified and on the systems and controls that should be adopted around disclosing the information.

    View the FCA's guidance.
  • Basel Committee on Banking Supervision Publishes Guidance on Sector-Specific Capital Buffers
    11/27/2019

    The Basel Committee on Banking Supervision has today published its guiding principles for the operationalization of a sectoral countercyclical capital buffer (or "SCCyB"). The SCCyB complements the Basel Committee's countercyclical buffer by establishing capital requirements that could be imposed on a particular sector, in addition to the countercyclical buffer that is based on banks' total risk weighted assets. The SCCyB will only apply to jurisdictions that choose to implement it on a voluntary basis and will not form part of the Basel standards.

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  • New EU Directive on Protection of Persons Reporting Breaches of Union Law
    11/26/2019

    A new EU Directive, known as the "EU Whistleblowing Directive", that aims to enhance the enforcement of EU law and policies by providing protection for individuals that report breaches has been published in the Official Journal of the European Union. The Directive will apply to whistleblowers working in the private or public sector, whether they are classed as workers, self-employed, shareholders or working under the supervision and direction of contractors, subcontractors and suppliers, as well as those who acquired information in previous employment or through the recruitment process for a job they are yet to begin.

    The Directive will come into force on December 16, 2019. Member States must implement the majority of the provisions into their national laws by December 17, 2021.

    View the Directive.
  • UK Conduct Regulator Announces 2020 Mini-Bond Product Intervention Measures
    11/26/2019

    The U.K. Financial Conduct Authority has announced that it will introduce temporary product intervention measures for 12 months from January 1, 2020 to December 31, 2020 to combat risks to consumers of the promotion of speculative mini-bonds. The measures follow the high profile failure of mini-bond issuer London Capital & Finance plc, which has prompted an investigation by the FCA into the circumstances surrounding LC&F's collapse and the FCA's supervision of the firm. HM Treasury is also conducting an ongoing investigation into the wider policy questions raised by LC&F's failure, focusing on a review of the regulatory regime governing non-transferable debt securities and an assessment of Innovative Finance ISA rules.

    Read more.
  • Basel Committee on Banking Supervision Publishes Statement on Proportionate Implementation of Basel Framework
    11/26/2019

    The Basel Committee on Banking Supervision has published a joint statement with the Basel Consultative Group on the proportionality of the implementation of the Basel Framework by the banks and jurisdictions to which it applies. The Basel Consultative Group is the Basel Committee's sub-group responsible for enhancing the Basel Committee's engagement with global supervisors, including those from non-member countries. The Basel Framework is the set of bank prudential standards established by the Basel Committee that Basel members have agreed to implement. The joint statement confirms the role of proportionality that is established in the Basel Committee's "Core principles for effective banking supervision".

    The statement follows the Basel Committee's survey on proportionality in bank regulation and supervision, in which it found that a majority of Basel Committee and BCG jurisdictions apply proportionality measures in supervision of banks.

    View the Basel Committee's statement on proportionality.

    View the Basel Committee's Core principles for effective banking supervision.

    View the Basel Committee's survey on proportionality in bank regulation and supervision.
  • UK Conduct Regulator Publishes Feedback and Final Rules on Proxy Advisors Regulations
    11/25/2019

    The U.K. Financial Conduct Authority has published a Policy Statement incorporating its response to the feedback it received on its proposals for the implementation of the Proxy Advisors (Shareholders' Rights) Regulations 2019, together with the final rules. The final rules make amendments to the FCA's Decision Procedure and Penalties Manual and Enforcement Guide, reflecting the new Regulations that came into force on June 10, 2019.

    The Regulations implemented new obligations imposed upon proxy advisors by the revised EU Shareholder Rights Directive into the U.K. statutory regime. The FCA has the power to discipline and investigate proxy advisors under the Proxy Advisors Regulations and changes were therefore required to the FCA's rules to take account of these powers. The following new provisions have been included in the Decision Procedures and Penalties Manual:
    • the FCA will publish a statement about a proxy advisor who has breached a relevant requirement; it will impose a public censure in contested cases and allow decision makers to use executive powers to decide on settled cases;
    • the FCA will decide when to impose a financial penalty on a proxy advisor; and
    • the FCA will decide when to impose a restitution requirement.

    The FCA has also included a new section in its Enforcement Guide explaining how it will use its powers under the Regulations. The intended approach will broadly mirror that taken by the FCA in conducting investigations, sanctioning and using its regulatory powers under FSMA.

    View the FCA's Feedback and final rules.
  • European Banking Authority Publishes Consultation on Draft MREL and TLAC Disclosure and Reporting Standards
    11/22/2019

    The European Banking Authority has published a consultation paper on its draft Implementing Technical Standards for supervisory reporting and public disclosure of minimum requirements for own funds and eligible liabilities (or “MREL”) and total loss-absorbing capacity (or “TLAC”). Responses to the consultation should be submitted by February 22, 2020. The EBA expects to submit the final draft ITS to the European Commission in June 2020.

    Read more.
  • Eurozone Single Resolution Board Publishes Opinions on Internal Rules for its use of Personal Data
    11/22/2019

    The Eurozone Single Resolution Board has published a series of three opinions setting out its own internal rules for the circumstances in which it may restrict the rights of data subjects under Regulation (EU) 2018/1725, data protection legislation that is commonly understood as the public sector equivalent of the General Data Protection Regulation. The Regulation governs the use of personal data by EU institutions and agencies. 

    Read more.
  • Financial Stability Board Publishes 2019 List of Global Systemically Important Banks
    11/22/2019

    The Financial Stability Board has published the 2019 list of global systemically important banks. Alongside the 2019 G-SIB list, the Basel Committee on Banking Supervision has published further information relating to its 2019 assessment of G-SIBs, including:
     
    • The denominators of each of the 12 high-level indicators used to calculate the banks’ scores under the G-SIB methodology;
    • The 12 high-level indicators used to calculate these denominators; and
    • The cutoff score used to identify the G-SIBs in the updated list and the thresholds used to allocate G-SIBs to buckets for the purpose of calculating the specific higher loss absorbency requirements.

    The Basel Committee assessment was based on its 2013 methodology for identifying G-SIBs. A revised assessment methodology was published by the Basel Committee in July 2018, which is expected to be implemented by member jurisdictions by 2021.

    View the 2019 G-SIB list.

    View the Basel Committee's statement on its G-SIB assessment methodology.

    View details of the Basel Committee's revised assessment framework for G-SIBs.

    Read more.
     
  • European Banking Authority Launches Consultation on Specific Supervisory Reporting Requirements for Market Risk
    11/21/2019

    The European Banking Authority has launched a consultation on its proposed draft Implementing Technical Standards on specific supervisory reporting requirements for market risk. “Market risk” relates to the risk of losses that banks face to their on- and off-balance sheet positions from adverse movements in market prices. The EBA was mandated to produce the ITS under the Capital Requirements Regulation II, published in June 2019, which made extensive changes to the EU’s capital requirements regime, including through the implementation of the Basel Committee on Banking Supervision’s international standards on market risk. 

    Read more.
  • UK Conduct Regulator Sets Out Conduct Expectations of Firms For Libor Transition
    11/19/2019

    The U.K. Financial Conduct Authority has published a statement on conduct risk during the LIBOR transition, which is due to be completed by the end of 2021. The statement is in the form of questions and answers and sets out the FCA's expectations of firms relating to governance and accountability, replacing LIBOR with alternative rates in existing contracts, offering new products with alternative rates, communicating with customers about the transition from LIBOR and best practice for firms investing on behalf of clients.

    View the FCA's statement.
  • Basel Committee Publishes Report on Open Banking and Application Programming Interfaces
    11/19/2019

    The Basel Committee on Banking Supervision has published a report on “open banking” and the use of application programming interfaces. The term “open banking” refers to the sharing and leveraging of customer-permissioned data by banks with third-party developers and firms to build applications and services, including for example those that provide real-time payments, greater financial transparency options for account holders, marketing and cross-selling opportunities. Application programming interfaces are software intermediaries that enable information to be exchanged between applications. 

    Read more.
  • UK Legal Statement on CryptoAssets and Smart Contracts
    11/18/2019

    The UK Jurisdiction Taskforce has published a legal statement on cryptoassets and smart contracts under English private law. UKJT is part of the LawTech Delivery Panel, an industry-led group established in 2018, with the aim of identifying barriers and opportunities for growth. The legal statement provides the UKJT's view of the principles applicable under English and Welsh private law for determining when a cryptoasset will be considered property and when an enforceable contract is concluded through a smart contract. The intention of the statement is to help improve confidence among market participants and investors due to the perception of legal uncertainty on the legal status of cryptoassets and smart contracts.

    Read more.
  • European Commission Vice President Addresses CCP Temporary Equivalence and Sustainable Finance in London Speech
    11/15/2019

    The Vice President of the European Commission, Valdis Dombrovskis, has given a keynote speech at the Guildhall in London covering, amongst other things, the EU’s proposals for the development of the European sustainable finance framework and a proposed extension to the temporary equivalence regime for U.K. central counterparties.

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  • Financial Stability Board’s LIBOR Steering Group Encourages ISDA to Roll Out Pre-Cessation Trigger
    11/15/2019

    The co-Chairs of the Financial Stability Board’s Official Sector Steering Group, whose work focuses on interest rate benchmarks that are deemed to play a critical role in the global financial system, have written to the International Swaps and Derivatives Association requesting that it includes a “pre-cessation trigger” alongside the cessation trigger in its standard language in derivatives contracts, via either definitions for new contracts or in a single protocol (without embedded optionality) for outstanding contracts. The pre-cessation trigger would cause a LIBOR-based contract to fall back to an alternative reference rate in the event that the U.K. Financial Conduct Authority, as the regulator of LIBOR, deemed that LIBOR was no longer representative. 

    Return to main website.
    TOPIC: Derivatives
  • Basel Committee on Banking Supervision Consults on Pillar 3 Disclosure Requirements for Market Risk and Sovereign Exposures
    11/14/2019

    The Basel Committee on Banking Supervision has opened two consultations on revisions to the Basel III Pillar 3 disclosure requirements, one related to market risk disclosures and one on sovereign exposures disclosures. Responses to both consultations should be submitted by February 14, 2020. No indication is given as to when the sovereign exposure disclosure requirements might be introduced. The Basel Committee intends to publish the revisions of the market risk disclosure requirements in time for implementation of the revisions by member jurisdictions by no later than January 1, 2022.

    Read more.
  • Financial Stability Board Publishes 2019 Resolution Report
    11/14/2019

    The Financial Stability Board has published its 2019 Resolution Report, providing updates on its implementation of policy measures to enhance the resolvability of systemically important financial institutions.  

    Read more.
  • European Banking Authority Consults on Draft Technical Standards on Passport Notifications Under Capital Requirements Directive
    11/13/2019

    The European Banking Authority has published draft amended Regulatory and Implementing Technical Standards regarding the exercise of credit institutions’ rights to freedom of establishment and freedom to provide services (i.e. passporting rights) under the Capital Requirements Directive. The EBA reviewed the original Technical Standards in 2018 and found several areas for improvement that would enhance the quality and consistency of passport notifications and the ability of EU national regulators to use them. It has produced the draft amended standards with a view to updating the information requirements that must be notified by a credit institution to its home national regulator. Responses to the consultation should be submitted by February 13, 2020.

    Read more.
  • Final EMIR 2.2 Technical Advice Published
    11/11/2019

    Following its consultation earlier this year, the European Securities and Markets Authority has published final reports and the final technical advice on third-country CCP tiering, comparable compliance and fees under draft revisions to the European Market Infrastructure Regulation, known as EMIR 2.2. EMIR 2.2 will change the requirements for the supervision of both EU and third-country CCPs, and includes the controversial formal EU "location policy" for CCPs. The technical advice will assist the Commission in preparing the final delegated legislation that will supplement the EMIR 2.2.

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  • European Commission Publishes EU Delegated Regulation Aligning KID Publication Requirements under PRIIPS Regulation
    11/08/2019

    A Commission Delegated Regulation amending secondary legislation supplementing the Packaged Retail and Insurance-Based Investment Products Regulation has been published in the Official Journal of the European Union. 

    Read more.
    TOPICS: FundsSecurities
  • EU Single Resolution Board Launches Consultation on Expectations for Banks
    11/08/2019

    The Eurozone Single Resolution Board has launched a public consultation on its proposed “Expectations for Banks”, a draft document outlining best practice for banks in implementing resolution planning. The consultation is being undertaken as part of the SRB’s endeavours to work with Eurozone banks and other stakeholders and to demonstrate transparency in its approaches and decisions. 

    Read more.
  • UK Information Commissioner’s Office Consults on Application of Powers under Proceeds of Crime Act
    11/08/2019

    The U.K. Information Commissioner’s Office, the U.K.’s independent body for the upholding of information rights in the public interest, has issued a consultation paper on proposals that it be granted investigative and other powers under the Proceeds of Crime Act 2002. The proposals are in response to the increasing number of cases in which financial gains are made by criminals involved in the theft of personal data.

    Read more.
  • European Commission Publishes Commission Delegated Regulation Amending Auctioning Allowances Rules
    11/08/2019

    A Commission Delegated Regulation amending the EU Auctioning Regulation has been published in the Official Journal of the European Union. The Delegated Regulation will apply directly in all EU Member States from November 28, 2019. The EU Auctioning Regulation provides for EU emission allowances to be auctioned and specifies key aspects of the auctions, including their design, timing and eligibility requirements. 

    Read more.
  • US Securities and Exchange Commission Extends No-Action Relief for MiFID II Inducements and Research
    11/08/2019

    The U.K. Financial Conduct Authority has welcomed the U.S. Securities and Exchange Commission’s extension of no-action relief addressing a potential conflict between U.S. regulation and the inducements and research provisions of the revised Markets in Financial Instruments Directive. One of MiFID II’s objectives is to give investors transparency into the cost of both research and trading commissions by requiring payments for these elements to be unbundled. 

    Read more.
    TOPIC: MiFID II
  • European Banking Authority Reports Reduction in EU Banks’ Non-Performing Loans
    11/08/2019

    The European Banking Authority has published a report on non-performing loans in the EU banking sector, in which it finds that total NPLs have decreased from over €1.5 trillion in June 2015 to €636 billion in June 2019. The level of European NPLs was a key concern for EU supervisors and market participants following the financial crisis, triggering efforts to deal with the issue at a supervisory, political and market participant level.

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  • Basel Committee on Banking Supervision Publishes Consultation on Coordination of Prudential and AML/CFT Supervision
    11/08/2019

    The Basel Committee on Banking Supervision has published a consultation paper on the “Introduction of guidelines on interaction and cooperation between prudential and anti-money laundering/counter-terrorism financing supervision”. Under the consultation paper, the Basel Committee proposes to amend its guidelines on the “Sound management of risks related to money laundering and financing of terrorism” to include guidance on the interaction between prudential and AML/CFT supervision in a bid to enhance the effectiveness of the supervision of banks’ AML/CFT regimes. Responses to the consultation should be submitted by February 6, 2020.

    Read more.
  • Financial Stability Board Plenary Meets to Review Global Financial System Vulnerabilities, FinTech and its 2020 Work Program
    11/07/2019

    The Financial Stability Board has met in Paris to review key issues facing financial markets, including vulnerabilities in the global financial system, FinTech developments and its 2020 work program. 

    Read more.
  • European Commission Confirms Fitness of EU Supervisory Reporting Requirements for Financial Services
    11/07/2019

    The European Commission has published the results of its “fitness check” of EU supervisory reporting requirements.  The reporting requirements imposed by EU and national regulatory authorities require regulated institutions to provide information to their respective authorities regarding their financial condition and activities. The European Commission assessed the effectiveness, coherence, relevance and efficiency of existing reporting requirements in order to identify areas that may be simplified or streamlined.

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  • EU Technical Standards On Homogeneity Conditions For STS Securitizations
    11/06/2019

    Regulatory Technical Standards under the EU Securitization Regulation on the conditions for a securitization to be considered "homogenous" have been published in the Official Journal of the European Union. Homogeneity is one of the requirements for a securitization to be classed as a simple, transparent and standardized securitization or STS securitization. Exposures related to STS securitizations will attract lower risk weightings for firms subject to the Capital Requirements Regulation. The RTS will apply directly across the EU from November 26, 2019.

    Read more.
  • HM Treasury Publishes Equivalence Determinations for EU Financial Services Legislation
    11/06/2019

    HM Treasury has published the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019, providing U.K. government ministers with a temporary power to make equivalence and exemptions directions for the EU and EEA Member States under relevant financial services legislation. The temporary power will come into force on the date that the U.K. leaves the EU (currently expected to be no later than January 31, 2020) and can only be used for up to twelve months from that date.

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  • Working Group on Euro Risk-Free Rates Recommends Fallback Provisions Contracts Referencing EURIBOR
    11/06/2019

    The European Central Bank has published a report by the working group on euro risk-free rates providing high-level recommendations for fall-back provisions in contracts for cash products and derivatives transactions referencing EURIBOR. The recommendations are not legally binding and market participants can decide whether, and to the extent to which, they wish to adopt them. EURIBOR were identified as critical benchmarks for the purposes of the EU Benchmarks Regulation  and the methodology for calculating EURIBOR has been revised to be Benchmark Regulation-compliant, to be implemented by the end of 2019.

    Read more.
  • EU Consultation on Changes to Position Limits for Commodity Derivatives
    11/05/2019

    Following its Call for Evidence issued in May this year, the European Securities and Markets Authority has launched a consultation on proposed revisions to the legal framework for position limits and position management in commodity derivatives. The position limits regime was introduced by the revised Markets in Financial Instruments Directive. MiFID II requires the European Commission to report to the European Parliament and the Council on the impact of the application of position limits and position management on liquidity, market abuse and orderly pricing and settlement conditions in commodity derivatives markets. ESMA must provide the Commission with advice regarding this new regime to support the Commission's preparation of the report, including any recommendations for changing the legislative requirements. Responses to ESMA's consultation should be submitted by January 8, 2020.

    Read more.
    TOPICS: DerivativesMiFID II
  • EU Recommendations on Financial Accounting Implications of Transition to €STR
    11/05/2019

    The European Central Bank has published a report by the working group on euro risk-free rates on the financial accounting implications of the transition from EONIA to €STR and the introduction of €STR-based fallbacks for EURIBOR. 

    Read more.
  • IOSCO Confirms That Stablecoins Are Potentially Within the Securities Regulatory Perimeter
    11/04/2019

    The International Organization of Securities Commissions has issued a statement confirming that it is possible, depending on their structure, for stablecoins to fall within the scope of securities market regulation. IOSCO has undertaken an in-depth study (not published) of stablecoins and has concluded that each proposed stablecoin, the manner in which it is intended to operate and the rights and obligations conferred on participants needs to be analyzed to assess the risks and benefits of the particular stablecoin. The statement is widely considered to be in response to Facebook's announcement about its proposed stablecoin, Libra. According to IOSCO, certain stablecoins may have features that are similar to securities and accordingly will be within the regulatory perimeter of some countries. IOSCO calls on entities that wish to launch stablecoins to engage with regulators so that any risks associated with the operation of the stablecoin might be mitigated.

    View IOSCO's statement.
    TOPICS: FinTechSecurities
  • UK Conduct Regulator Requests Fund Managers to Review Liquidity Management Practices
    11/04/2019

    The U.K. Financial Conduct Regulator has published a “Dear Chairman” letter addressed to Authorized Fund Managers requesting them to review certain aspects of the liquidity management arrangements for the authorized funds that they manage. The letter follows the FCA’s recent policy statement establishing new rules for open-ended funds that invest in inherently illiquid assets and aims to address concerns that open-ended funds may not always be able to liquidate funds fast enough to comply with redemption requests. In its policy statement, the FCA acknowledged that its new rules did not capture open-ended UCITS funds such as the LF Woodford Equity Income Fund. This latest letter urges firms to recognise that effective liquidity management is a core function for all open-ended funds.

    Read more.
    TOPIC: Funds
  • Financial Action Task Force Consults on Digital Identity in Customer Due Diligence Guidance
    10/31/2019

    The Financial Action Task Force is seeking feedback from private sector stakeholders on its draft guidance on the use of digital identity systems in customer due diligence. The guidance will supplement Recommendation 10 of the FATF's Recommendations regarding customer due diligence and demonstrates how authentication of customer identities in the digital finance and digital ID context supports broader anti-money laundering/counter-terrorism financing efforts. Stakeholders should submit responses to the consultation by November 29, 2019. The FATF intends to make further amendments to its draft guidance at its February 2020 meetings.

    Read more.
  • Basel Committee on Banking Supervision Considers Key Supervisory and Policy Initiatives
    10/31/2019

    The Basel Committee on Banking Supervision met on October 30-31, 2019 to discuss key policy and supervisory issues, including: (i) a proposed consultation on adjustments to the credit valuation adjustment risk framework; (ii) a proposed consultation on revised market risk and sovereign exposure disclosure requirements; (iii) a proposed discussion paper on the prudential treatment of cryptoassets; (iv) a proposed consultation on guidelines for enhanced cooperation between prudential regulatory authorities and anti-money laundering/counter-terrorism financing authorities; and (v) its reports into the implementation of the Net Stable Funding Ratio and large exposures standards in Argentina and China. All of the proposed consultation papers, as well as the NSFR/large exposures reports, are expected to be published in November 2019.

    Other topics under discussion included benchmark rate reforms, the implementation of the Basel Committee's guidance on managing foreign exchange settlement risk and the usability of capital buffers. On the latter subject, the Basel Committee has also published a newsletter reiterating the importance of the capital buffer framework and emphasizing that the buffers are designed to be usable. The Basel Committee has announced that Canada will host the 21 International Conference of Banking Supervisors on October 21-22, 2020.

    View the Basel Committee's press release on its October 30-31 2019 meeting.

    View the Basel Committee's newsletter on capital buffers.

    View details of the 21 International Conference of Banking Supervisors.
  • UK Conduct Regulator Postpones Implementation Date for Brexit Contingency Plans
    10/30/2019

    The U.K. Financial Conduct Authority has extended the date by which firms must implement Brexit contingency plans following the extension of the Brexit deadline from October 31, 2019 to January 31, 2020. Firms and funds should now notify the FCA for entry into the temporary permissions regime by January 30, 2020 and fund managers have until January 15, 2020 to notify the FCA if they wish to change their existing notification. Firms should continue to comply with transaction and trade reporting requirements under the Markets in Financial Instruments Directive and European Market Infrastructure Directive, respectively.
     
    View the FCA's statement on contingency planning deadlines.
  • European Banking Authority Publishes Opinion on Strengthening Depositor Protection in the EU
    10/30/2019

    The European Banking Authority has published the second in a series of three opinions on the implementation of the Deposit Guarantee Scheme Directive in the EU. This opinion relates to DGS payouts. The first opinion related to the eligibility of deposits, coverage level and cooperation between deposit guarantee schemes and was published in August 2019. The third opinion will cover DGS funding and the uses of DGS funds. The opinions have been prepared to assist the European Commission in its obligation to report on the implementation of the DGSD.

    Read more.
  • UK Government Agrees Extension of Brexit Deadline With European Union
    10/30/2019

    The U.K. Government has published legislation extending the deadline for the U.K.'s withdrawal from the European Union, following an agreement reached with relevant European Union bodies on the extended Brexit deadline. The European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No. 3) Regulations 2019 amend the day of the U.K.'s exit from the European Union from October 31, 2019 to January 31, 2020, granting the U.K. government an additional three months in which to ratify its proposed Brexit deal.

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  • European Banking Authority Urges EU Legislative Update for Cross-Border Banking and Payment Services in the Digital Era
    10/29/2019

    The European Banking Authority has published a report identifying potential barriers to customer choice and the cross-border provision of banking and payment services in the EU, together with proposals for how to overcome these issues. Building on the EBA's FinTech Roadmap and the European Commissioner's Consumer Financial Services Action Plan, the report sets out the areas where the institutions, including FinTech firms, may face challenges when seeking to provide intra-EU cross-border services, focusing on authorizations and licensing, consumer protection and conduct of business requirements and anti-money laundering and countering the financing of terrorism. The EBA makes recommendations for where changes to EU primary legislation or further guidelines could address the issues to enhance the EU's single market.

    Read more.
  • UK Regulator Publishes Final Technical Standards on Strong Customer Authentication in the Event of a No-Deal Brexit
    10/25/2019

    The U.K. Financial Conduct Authority has published a Policy Statement, final Technical Standards and changes to the Handbook rules on strong customer authentication and common and secure open standards of communication to be applicable when the U.K. leaves the EU. The FCA consulted on the proposed SCA RTS in early 2019 when the U.K. was due to leave the EU on March 29, 2019, and before the EU SCA Regulatory Technical Standards application date. Since then, Brexit has been extended and the EU SCA RTS has applied directly across the EU since September 14, 2019. As a result, the EU SCA RTS would be onshored into U.K. law under the Withdrawal Act. However, in preparation for a no-deal Brexit, the U.K. Payment Services Regulations would require firms to apply the U.K. SCA RTS. As a result, the EU SCA RTS would be revoked and the FCA's SCA RTS will apply in the U.K. in the event of a no-deal Brexit.

    Read more.
  • Regulatory Oversight Committee Launches Consultation on Legal Entity Identifiers for General Government Entities
    10/25/2019

    The Legal Entity Identifier Regulatory Oversight Committee has launched a consultation on the allocation of LEIs to government entities. LEIs are reference codes allocated to legal entities for the purposes of unique identification in financial transactions and for other public sector uses. General government entities are eligible for LEIs as they are legal entities, but many (such as Ministries, Agencies and Republics) are not incorporated or do not otherwise have legal personality

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  • UK Prudential Regulator Launches Consultation on More Proportionate Capital Requirements for Credit Unions
    10/24/2019

    The U.K. Prudential Regulation Authority has launched a consultation on the capital requirements that apply to credit unions. The PRA considers that credit unions approaching the thresholds of £10 million in assets or 15,000 members may find barriers to expansion under the current capital regime. It also finds that the risks that the capital regime endeavours to tackle could be addressed in a simpler manner than the link between capital and credit union membership size and activity which is currently used. The PRA also considers that engaging with small credit unions earlier could increase chances of a non-failure solution.

    Read more.
  • UK Conduct Regulator Publishes Feedback on Regulatory Framework for Stewardship Discussion Paper
    10/24/2019

    The U.K. Financial Conduct Authority has published a feedback statement on the discussion paper, “Building a regulatory framework for effective stewardship” that it published in January 2019 together with the Financial Reporting Council. The discussion paper called for input on how best to encourage the capital markets community to engage more actively in “stewardship” of the assets in which they invest. 

    Read more.
  • Financial Action Task Force Publishes Best Practices for Beneficial Ownership Transparency
    10/24/2019

    The Financial Action Task Force has published best practices on beneficial ownership for legal persons. Global standards require authorities to be able to ascertain the ultimate owner of a company or foundation to provide transparency and mitigate against the use of legal persons for financial crime purposes. The FATF's Best Practices document identifies the issues faced in achieving transparency of beneficial ownership and provides recommendations for an effective system that ensures accurate and up-to-date information to authorities in a timely manner. The FATF highlights that using a multi-pronged approach with numerous information sources is considered more effective and the document sets out the key features of an effective multi-pronged system.

    View the FATF best practices on beneficial ownership for legal persons.
  • European Supervisory Authorities Issue Guidance on Scope of Application to Bonds of the PRIIPs Regulation
    10/24/2019

    The Joint Committee of the European Supervisory Authorities has published a Supervisory Statement on the scope of application to bonds of the EU Packaged Retail and Insurance-based Investment Products Regulation. The ESAs have issued the Supervisory Statement in an attempt to avoid the adoption of diverse approaches by national regulators across the EU as to when a Key Information Document is required for different types of bonds under the PRIIPs Regulation. The PRIIPs Regulation, directly applicable across the EU since January 1, 2018, imposes a requirement upon issuers of packaged retail and insurance-based investment products to issue KIDs to retail investors describing key features of their products, in order to enhance transparency and improve investor protection in the PRIIPs market.

    Read more.
  • European Banking Authority Publishes Opinion on Regulatory Treatment of Non-Performing Exposure Securitizations
    10/23/2019

    The European Banking Authority has published an opinion recommending amendments to the regulatory treatment of the securitization of non-performing exposures. The opinion examines how securitizations may be used to fund the reduction of NPEs and outlines regulatory constraints imposed on the use of securitizations in this way, alongside its proposals for amendments to the regulatory framework.

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