UK authorities (BoE, FCA, and PRA) issued statements about their intended use of the temporary transitional power at the end of the transition period. On March 25, 2020, HM Treasury issued a written ministerial statement outlining its intention to retain the regulators’ temporary transitional power and to shift the application of this power so that it is available for use by the UK financial services regulators for a period of two years from the end of the transition period. Temporary transitional power was introduced through the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019. UK authorities intend to grant general transitional relief on a broad basis, with key exceptions as previously identified, from the end of the transition period until March 31, 2022.
In all but a few areas, PRA-regulated firms and BoE-regulated financial market infrastructures do not need to have completed preparations, to implement changes in UK law arising from the end of the transition period, by December 2020. Specific uses of the temporary transitional power, in particular those relating to some of the new requirements on firms entering the temporary permission regime, are expected to remain as previously published. Application of the temporary transitional power to changes to new EU material due to become applicable during the transition period will be considered as part of the ongoing legislative process in relation to those provisions. The draft transitional directions and guidance, the most recent of which were published in July 2019 as part of consultation paper (CP18/19) on UK withdrawal from EU, will be updated in light of the transition period and more details will be published in due course.
FCA also highlighted that UK regulated firms will not need to complete preparations to implement changes in UK law arising from the end of the transition period by December 2020. However, there are specific areas where FCA will not grant transitional relief. In these areas, FCA expects firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by the end of the transition period. FCA will publish updated draft directions and annexes in due course, which will include details on the application of the temporary transitional power in relation to new EU legislative requirements that become applicable during the transition period. Incoming European Economic Area firms should note that the temporary transitional power does not apply to the temporary permissions regime.
Keywords: Europe, UK, Banking, Insurance, Securities, Brexit, Transition Period, Transitional Direction, HM Treasury, BoE, PRA, FCA
Previous ArticleSNB on Reporting Data for COVID-19 Credit and Refinancing Facility
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)