BoE, FCA, HM Treasury, and PRA published a Memorandum of Understanding (MoU) that sets out how they expect to coordinate their respective functions in relation to equivalence and exemption determinations post Brexit. These are new functions that will be transferred to UK authorities in the context of Brexit and will come into effect from the exit day. The MoU has been established in accordance with Regulation 6 of the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 (the Equivalence Regulations).
The Treasury is responsible for determining the equivalence and the application of exemptions to any country or territory outside the UK (third country), where such a function is provided for in legislation. The Treasury may make determinations that are partial, time-limited, or subject to other conditions. BoE, FCA, and PRA are responsible for providing support to the Treasury for matters related to their regulatory functions. This includes the provision of information or advice to the Treasury in connection with any consideration of a new equivalence or exemption determination. The regulators are also responsible for recognizing third-country firms that operate in UK under an equivalence determination, where this is provided for in legislation. The regulators will provide advice in relation to their regulatory functions; however, when advice is requested on areas of joint competence (for example, capital requirements), the lead regulator should provide the advice after consulting the other regulator. In some cases, the regulators may provide advice on different aspects of a determination, according to their functions.
Keywords: Europe, UK, EU, Banking, Insurance, Securities, MoU, Equivalence and Exemption, Brexit, HM Treasury, Equivalence Regime, Third Country, FCA, PRA, BoE
Previous ArticlePRA Consults on Approach to Supervising Liquidity and Funding Risks
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.