Featured Product

    FCA Issues Statement for Firms Preparing for BRRD2 Transposition

    December 09, 2020

    FCA published a statement that is relevant for firms preparing for transposition of the revised Bank Recovery and Resolution Directive (BRRD2). HM Treasury laid a statutory instrument before the UK Parliament on October 15, 2020 to transpose BRRD2, which the UK is required to do by December 28, 2020. Certain provisions of this directive will come into effect on December 28, 2020, but then will cease to be effective in the UK on December 31, 2020. Unlike PRA, that has consulted on short-lived rule changes to come into effect on December 28, 2020, FCA has not identified any conflicts between its current requirements and those in the statutory instrument that will implement BRRD2. The statement highlights that FCA will not be addressing those new requirements in BRRD2 that do not apply to FCA solo-regulated firms. Firms should consult the website of HM Treasury and PRA for further information on these changes.

    FCA also highlighted the following relevant areas that apply to FCA-regulated firms:

    • Article 48(7) on the priority of debts in insolvency—As transposed by HM Treasury, certain changes are made to the priority of debts in insolvency in the case of insolvency proceedings commenced during the four-day period.
    • Article 55 on the Contractual Recognition of Bail-in—FCA has requirements in place for firms to include terms in their contracts recognizing that a liability may be “bailed in” (for example the debt may be written-down or converted into equity) by the resolution authority. BRRD2 adds to these with a mechanism for firms to notify the resolution authority in situations where it is “legally or otherwise impracticable” to include the required terms in contractual provisions. These additional requirements do not conflict with existing rules of FCA. Any notifications submitted that have not already been acted upon will automatically lapse on January 01, 2021.
    • Other potentially relevant article—Article 44a addresses the sale of subordinated eligible liabilities to retail clients and will be introduced via Handbook rules. FCA is consulting on the introduction of the requirements in this area in its quarterly consultation paper (No. 30), which was published on December 04, 2020.

     

    Related Link: FCA Statement

     

    Keywords: Europe, UK, Banking, Securities, BRRD2, BRRD2 Transition, Resolution Framework, Basel, Bail-In, Brexit Transition, HM Treasury, FCA

    Featured Experts
    Related Articles
    News

    EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    MAS Amends Notice on Related Party Transactions of Banks

    MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.

    April 08, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Euro Short-Term Rate

    ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.

    April 07, 2021 WebPage Regulatory News
    News

    EBA Consults on Standards Related to FRTB-SA

    EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).

    April 07, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules Related to IRB Approach for Credit Risk

    PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.

    April 07, 2021 WebPage Regulatory News
    News

    BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK

    The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks

    FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks

    OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.

    April 06, 2021 WebPage Regulatory News
    News

    EU Amends CRR and Securitization Regulation in Response to Pandemic

    To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).

    April 06, 2021 WebPage Regulatory News
    News

    HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26

    HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.

    April 06, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6821