HM Treasury published an update on the third meeting of the UK-U.S. Financial Regulatory Working Group. The meeting was focused on five key themes: the potential financial stability impact of the COVID-19 crisis, international cooperation and 2021 priorities, cross-border rules and overseas recognition/equivalence/substituted compliance regimes, sustainable finance, and financial innovation. The next Working Group meeting is expected to take place in the first half of 2021.
This Working Group meeting was the first since the withdrawal of UK from EU. Participants included officials and senior staff from the U.S. Department of the Treasury, HM Treasury, and the U.S. and UK independent regulatory agencies, including CFTC, FDIC, FED, OCC, SEC, BoE, and FCA. The following are the key highlights of the meeting:
- Participants discussed the outlook for financial regulatory reforms and future priorities, including possible areas for deeper bilateral and multilateral regulatory cooperation to further facilitate safe and efficient financial services activity between U.S. and UK markets, and provided updates on certain aspects of their respective domestic frameworks.
- Participants took stock of ongoing public- and private-sector efforts in relation to benchmark transition and provided updates on their respective cross-border rules, overseas recognition, equivalence, and substituted compliance regimes. Participants also welcomed the announcement of the signing of a Memorandum of Understanding between BoE and CFTC regarding supervisory cooperation in relation to UK and U.S. central counterparties that operate on a cross-border basis.
- Participants acknowledged the success of this summer’s UK-U.S. Financial Innovation Partnership meeting and discussed further actions to deepen UK and U.S. ties in financial innovation, their respective approaches to digital payments, and cross-border data issues.
- On insurance, participants discussed implementation of the U.S.-UK Covered Agreement, next steps for the U.S.-UK Insurance Project, and the UK and U.S. insurance regulatory responses to the COVID-19 crisis.
- Sustainable finance was also a topic of discussion at the Working Group, with the UK discussing its future priorities, including its climate-related financial sector work and regulatory and supervisory approach to climate change, along with the private sector-led disclosure efforts. U.S. participants outlined private-sector efforts to mitigate climate-related risks.
- Participants also took stock of the Working Group’s achievements to date and recognized that the UK-U.S. financial regulatory relationship and Working Group discussions will be entering a new phase after Brexit transition is complete.
- Participants identified follow-up work for the Working Group on the above topics and other priority issues. Participants will continue to engage bilaterally on these topics as well as other topics of mutual interest ahead of the next Working Group meeting.
Related Link: Joint Statement
Keywords: Europe, Americas, UK, US, Banking, Insurance, Securities, COVID-19, Sustainable Finance, Cross-Border Rules, UK-US Financial Regulatory Working Group, HM Treasury
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