FCA published further proposals (CP18/36) on how it will amend its Handbook and EU-derived binding technical standards (BTS) if the UK leaves EU without an implementation period in place. FCA is also consulting on the proposed approach to non-Handbook guidance and to forms that appear in the FCA Handbook. The comment period on CP18/36 closes on December 21, 2018.
In October 2018, FCA had published its first consultation on the amendments needed, should the UK leave EU without an implementation period. This consultation paper proposes further changes that may need to be made to the FCA Handbook and BTS. These include amendments to reflect the temporary permissions regime, new credit rating agency (CRA) regime, and trade repository regime. CRAs in EU are regulated under the CRA Regulation and are supervised by ESMA. The Treasury intends to amend the legislation to make FCA the supervisor responsible for CRAs registered under the UK regime. FCA is also consulting on guidance on how non-Handbook guidance should be interpreted after Exit day and on the approach to forms that appear in the Handbook. In particular, CP18/36 covers the following topics:
- Chapter 2 discusses a range of cross-cutting issues which span our Handbook and BTS and the proposed FCA approach to these. This includes further issues identified since publication of the first CP.
- Chapter 3 explains the Handbook proposals covered in this consultation (except those related to the introduction of the temporary permissions regime and the new credit rating and trade repository regimes). This includes an explanation of the more significant changes FCA is proposing, including those related to the prudential standards addressing proposals related to contractual recognition of bail-in.
- Chapter 4 sets out certain proposals about the temporary permissions regime, which were previously described but not consulted on in CP18/29.
- Chapter 5 outlines the changes FCA proposes to make to BTS. An explanation of the FCA approach to BTS was included in the first consultation.
- Chapter 6 summarizes the FCA approach to forms and the guidance FCA proposes to issue on this.
- Chapter 7 outlines changes because FCA will take on regulating credit rating agencies and trade repositories.
- Chapter 8 summarizes the proposed approach to non-Handbook guidance issued by FCA and the guidance FCA proposes to issue on this. FCA expects proposals in this chapter to be of interest to CRAs and trade repositories.
Comment Due Date: December 21, 2018
Keywords: Europe, UK, Banking, Insurance, Securities, CP18/36, Brexit, CRA Regulation, Temporary Permissions Regime, FCA Handbook, FCA
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.