Featured Product

    BoE Sets Out Approach to Monitor Third Country Systems Post Brexit

    September 14, 2021

    The Bank of England (BoE) published its approach to the monitoring of third-country systems designated under the Settlement Finality Regulations. In light of the UK’s withdrawal from the EU, the UK amended its legislation to enable third-country central counterparties, central security depositories, and payment systems, which are not subject to the UK law, to receive settlement finality designation within the UK. Any system previously covered by the EU Settlement Finality Directive, which submitted an application for permanent designation by June 30, 2021, continues to benefit from the UK’s settlement finality protection under the Temporary Designation Regime, which ends on December 31, 2023.

    Once a system, not subject to the UK law, has been designated under the UK Settlement Finality Regulations, BoE will monitor that the system continues to meet the following requirements for designation:

    • A system must have at least three institutions participating in the system, unless otherwise determined by BoE in any case where there are two institutions participating in the system and BoE considers that designation is required on the grounds of systemic risk; and be a system through which transfer orders are effected.
    • A system must have adequate arrangements for the effective monitoring and enforcement of compliance with its rules
    • A system operator must have financial resources sufficient for the proper performance of its functions
    • A system operator must be able and willing to co-operate with the relevant UK supervisory and administrative authorities
    • The rules of the non-UK law system must specify the point at which a transfer order takes effect as having been entered into the system; specify the point after which a transfer order may not be revoked by a participant or any other party; and prohibit the revocation by a participant or any other party of a transfer order
    • The system must have default arrangements, which are appropriate for that system in all the circumstances

    These requirements will be applied to each designated system when its application for permanent designation is approved. BoE also published notification requirements. The Settlement Finality Regulations require an operator of a designated system, not subject to the UK law, to notify BoE when it has made certain changes, including changes to default arrangements, within seven days; any rule changes related to matters dealt with in the Settlement Finality Regulations, within 14 days; and changes to UK membership of the designated system, within seven days. Under Article 10(2) of the Settlement Finality Regulations, BoE can ask a designated system to provide such information as is reasonably required to satisfy itself that the requirements for designation continue to be met and to verify in such manner as it may specify.

     

    Related Link: Notification

     

    Keywords: Europe, UK, Banking, Settlement Finality Regulation, Temporary Designation Regime, Central Counterparties, Brexit, Systemic Risk, BoE

    Featured Experts
    Related Articles
    News

    BIS and Central Banks Experiment with GenAI to Assess Climate Risks

    A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe

    March 20, 2024 WebPage Regulatory News
    News

    Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures

    Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.

    March 18, 2024 WebPage Regulatory News
    News

    Singapore to Mandate Climate Disclosures from FY2025

    Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies

    March 18, 2024 WebPage Regulatory News
    News

    SEC Finalizes Climate-Related Disclosures Rule

    The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.

    March 07, 2024 WebPage Regulatory News
    News

    EBA Proposes Standards Related to Standardized Credit Risk Approach

    The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU

    March 05, 2024 WebPage Regulatory News
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    RESULTS 1 - 10 OF 8957