Featured Product

    HM Treasury Consults on Phase II of Future Regulatory Framework Review

    October 19, 2020

    HM Treasury launched a consultation on Phase II of the Future Regulatory Framework Review, with the comment period ending on January 19, 2021. The second phase of the Review considers how the regulatory framework for financial services needs to adapt to be fit for the future, particularly to reflect the new position of UK outside the EU. The consultation proposes an overall approach to the regulation of financial services, built on the existing Financial Services and Markets Act 2000 (FSMA) model, which the government believes should form the foundation of the future regulatory framework. However, at this stage, it does not present a full package of proposals, which will be part of the second stage of Phase II.

    The Future Regulatory Framework Review was established to determine how the overall approach to regulation of financial services needs to adapt to the new position of UK outside the EU and to ensure the regulatory framework is fit for the future. After focusing on the specific issue of coordination between the UK regulatory authorities in Phase I of the review, the government is now moving to Phase II, which will examine the broader regulatory framework for regulation of financial services in the UK. The government is conducting this phase of the review in two stages. This first consultation sets out an overall blueprint for financial services regulation, focusing on the split of responsibilities between Parliament, the government, and the financial services regulators. In doing so, it highlights the importance of ensuring appropriate and effective arrangements for accountability, scrutiny, and public engagement with the policy-making process, particularly in relation to the financial services regulators of UK. The government will carefully consider the responses received and use these to inform a second consultation in 2021, which will set out a final package of proposals and how they will be delivered.

    The consultation seeks views on proposals and options for adapting the financial services regulatory framework following Brexit. This consultation focuses on how the FSMA model of regulation can be built on to provide a regulatory framework that makes the most of opportunities provided by Brexit and which will underpin a stable, innovative, and internationally competitive UK financial services sector far into the future. The consultation proposes a blueprint for the future regulatory framework which builds on the strengths of the FSMA model. This blueprint, which is referred to in this consultation as the post-EU framework proposal, has the following key features:

    • It provides for a clear allocation of responsibilities between Parliament, HM Treasury, and the financial services regulators.
    • Government and Parliament will be responsible for setting the policy framework for financial services regulation. This will include new policy framework legislation for specific areas of regulated activity that will give the government and Parliament the opportunity to set out the key public policy issues that must be considered when designing and implementing regulatory standards.
    • PRA and FCA will be responsible for designing and implementing the regulatory standards that apply to financial services firms and markets using their existing rule-making powers in FSMA.
    • PRA and FCA will be subject to enhanced transparency requirements obliging them to explain how they have had regard to the public policy issues set out by Parliament in activity-specific policy framework legislation.
    • The cooperation and coordination arrangements that exist between HM Treasury and the financial services regulators will include more systematic consultation between these institutions at an early stage in the policymaking process. 

     

    Related Links

    Comment Due Date: January 19, 2021

    Keywords: Europe, UK, Banking, Insurance, Securities, Brexit, Future Regulatory Framework, FSMA, PRA, FCA, HM Treasury

    Related Articles
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A Updates in February 2021

    The EBA Single Rulebook question and answer (Q&A) tool updates for this month include answers to ten questions.

    February 26, 2021 WebPage Regulatory News
    News

    ESMA Releases Schema and Instructions for Securitization Reporting

    ESMA updated the set of questions and answers (Q&A), along with the reporting instructions and an XML schema for the templates set out in the technical standards on disclosure requirements, under the Securitization Regulation.

    February 26, 2021 WebPage Regulatory News
    News

    EU Rule Amends Requirement for European Single Electronic Format

    EU published Regulation 2021/337, which amends the Transparency Directive (2004/109/EC), regarding the use of the single electronic reporting format for annual financial reports.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6637