FCA published a consultation paper (CP19/2) that sets out details of the financial services contracts regime (FSCR). CP19/2, which should be read in conjunction with the FSCR Regulations, contains the FCA proposals for rules that will apply to firms in the FSCR. The last date for comments was January 29, 2019. The FSCR allows the European Economic Area firms to conduct an orderly exit from the UK, in case the UK leaves EU without an implementation period. FCA recently updated its information on FSCR and plans to publish the final text of the proposed rules,, along with the feedback to CP19/2, before the exit day.
The FSCR Regulations will allow European Economic Area firms—that have pre-existing contracts in the UK and that would require a permission to service these contracts—to continue to carry on the relevant regulated activities in the UK for a limited period. FCA needs to amend its Handbook to apply the appropriate rules to firms under the FSCR for this UK business and is, therefore, consulting on the application of these rules in CP19/2. The FSCR will work alongside the temporary permissions regime, which enables inbound European Economic Area firms to access the UK market while seeking full authorization in the UK. The FSCR will provide two discrete mechanisms:
- Supervised run-off—for the European Economic Area firms with UK branches or top-up permissions in the UK and firms who entered the temporary permissions regime but did not secure a UK authorization at the end
- Contractual run-off—for the remaining incoming services firms
The consultation paper is relevant for European Economic Area firms that are passporting into the UK under the Financial Services and Markets Act 2000 (FSMA) and Treaty firms. It is also relevant for European Economic Area electronic money and payment institutions and registered account information service providers passporting into the UK.
Comment Due Date: January 29, 2019
Keywords: Europe, UK, Banking, Insurance, Securities, FSCR, Brexit, CP19/2, FSCR Regulations, FCA
Previous ArticleFED Extends Form FR 4199 on Basel II Pillar 2 Guidance
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).