HM Treasury Updates Policy Statement on Prudential Standards for Investment Firms in UK Financial Services Bill06/23/2020HM Treasury has published an updated policy statement on its proposals for the prudential standards in the U.K.'s upcoming Financial Services Bill. The Financial Services Bill will set out a proposed regulatory framework for the financial services industry following the U.K.'s exit from the EU. HM Treasury published its original policy statement on the proposed prudential regime in March 2020, setting out its plans to: (i) complete the U.K.'s implementation of the remaining Basel III standards; and (ii) establish a new prudential regime for U.K. investment firms.
In its updated statement, HM Treasury makes clear that it intends to delegate responsibility for the implementation of the prudential requirements to the U.K. Financial Conduct Authority and the Prudential Regulation Authority, allowing them to establish the prudential regimes via FCA and PRA rules. The regulators will be subject to an enhanced accountability framework to enable greater scrutiny of their implementation of the prudential rules by Parliament, industry and the public. This framework will require the regulators to take account of the wider objectives of government such as U.K. competitiveness and relationships with other jurisdictions.
HM Treasury proposes that the U.K. will introduce the new investment firms prudential regime and aspects of Basel III that have been implemented in the EU CRR II by Summer 2021, although this will be dependent on the passage of the Financial Services Bill. The Basel Committee on Banking Supervision has delayed the deadline for implementation of Basel 3.1 until January 1, 2023. HM Treasury intends to work towards an implementation of Basel 3.1 which is consistent with that deadline.
View HM Treasury's Updated Policy Statement.
View details of HM Treasury's March 2020 Policy Statement.
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