Featured Product

    EBA Issues Further Clarifications as End of Brexit Transition Nears

    December 08, 2020

    EBA issued a statement clarifying the previous EBA statements regarding Brexit for the benefit of consumers across EU. UK had left EU on January 31, 2020 and the Brexit transition period ends on December 31, 2020, which means that EU law will cease to apply in UK as of January 01, 2021; thus, from this date, UK financial institutions not holding a valid authorization from the supervisory authorities in EU will lose the right to provide financial services in the EU. The statement provides clarifications about preparations needed by financial institutions, changes in cross-border payments between EU and UK, and access to bank accounts in UK. EBA has been calling on all financial institutions affected by Brexit to adequately and timely inform consumers regarding the availability and continuity of the services they currently provide, including whether institutions plan to cease offering services to consumers in EU.

    In the statement, EBA clarifies that, to continue to provide financial services in EU, UK financial institutions will need to ensure that they offer these services through entities that are duly authorized in EU. Based on the assessment of the supervisory authorities in EU, most of the UK financial institutions that are actively planning to continue to offer services in EU have obtained adequate authorizations for their EU-based activities and are in the process of “ramping up” their EU operations. This includes ensuring that those entities have adequate staff, management, and risk management capabilities and that they move EU customers and their contracts into their EU entities, where relevant. In situations where the authorization process would not be finalized before the end of the transition period, supervisory authorities in EU have requested institutions to implement contingency plans setting out alternative actions until they receive authorizations. Where the UK financial institutions have chosen to cease their activities in EU, they are required to finish off-boarding of the affected customers by the end of the transition period without causing detriment to consumers.

    Under the EU law, after the end of the transition period, consumers in EU may maintain their existing bank accounts held with the  financial institutions in UK, subject to the relevant UK legal requirements. However, consumers need to consider the following:

    • If a bank account is held with a UK financial institution authorized in UK, the deposit protection rules applicable in the UK will apply and these may be different to those applicable to bank accounts held in the EU.
    • If a bank account is held with an EU-based branch of a UK financial institution, it will no longer be covered by the UK deposit guarantee scheme. Consumers are advised to check with their financial institution (branch) or national supervisory authorities in their member state whether such deposits will be protected by the deposit protection scheme in the relevant member state.
    • If a bank account is held with a UK-based branch of an EU-authorized institution, it will be covered by the UK deposit scheme; however, this could change after the end of transition period and such deposits may or may not be protected by the UK or a national deposit protection scheme in EU.

     

    Related Link: Statement

     

    Keywords: Europe, EU, UK, Banking, Insurance, Securities, Brexit, Brexit Transition, Deposit Guarantee Scheme, Cross-Border Cooperation, EBA

    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News
    News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News
    News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News
    News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267