UK authorities jointly published an updated version of the Regulatory Initiatives Grid. The grid presents a consolidated plan and timeline of initiatives that the authorities consider will, or may, have significant operational impact on firms across the next 24 months. The Grid is a joint effort of BoE, FCA, Competition & Markets Authority, Payment Systems Regulator, Information Commissioner’s Office, Pensions Regulator, and HM Treasury (as observer member). The first edition of this Grid was published on May 07, 2020 and it was focused on delays and cancellations to initiatives due to the COVID-19 crisis. The key upcoming initiatives in the latest iteration include the work on LIBOR transition, transposition of key EU regulations, implementation of Basel 3.1, and ongoing work to prepare the financial services sector for the end of the EU exit transition period.
This edition of the Grid contains 111 initiatives, an increase on the 85 that were set out in the first edition published in May 2020. That increase is partly due to the inclusion of initiatives from the Information Commissioner’s Office and The Pensions Regulator and feedback from stakeholders that they would like the Grid to be as comprehensive as practicable. It also reflects the expanded horizon of the Grid, which now covers a two-year horizon. In addition, given the number of initiatives paused or delayed over the past few months, fewer initiatives have fallen out of the Grid (by virtue of completion) than might typically be expected. This Grid is published at least twice a year to help manage the operational impact, on firms, of implementing such initiatives.
In the near-term, the end of the transition period associated with the exit of UK from EU drives a number of initiatives. Before the end of the year, the UK will transpose CRD5 and BRRD2, in addition to concluding a number of related initiatives, such as the completion of "onshoring." The UK will then implement changes to the prudential regime for credit institutions, which will give effect to a number of Basel III standards. A review of Solvency II will also be conducted. The Grid also includes several long-running, and critically important, initiatives. These include the phase-out of LIBOR, increased margining of OTC derivative contracts, achieving resolvability, and strengthening operational resilience across a number of sectors. In addition, consultations will be undertaken on the UK implementation of Basel 3.1 during 2021. HM Treasury intends to consult on the UK’s future regulatory framework for financial services and on the payments landscape. This is in addition to commissioning the reviews of the UK Fintech Strategy and the operation of the ring-fencing regime. BoE is considering how to follow up its discussion paper on the merits of central bank digital currencies while the Payment Systems Regulator is conducting a broad review into its three to five year strategy.
Keywords: Europe, EU, UK, Banking, Insurance, Securities, Brexit, Basel, LIBOR, Regulatory Initiatives Grid, Solvency II, HM Treasury, FCA, PRA, BoE
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