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
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.