UK Authorities on Temporary Transitional Powers Post Brexit Transition
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.
Related Links
Keywords: Europe, UK, Banking, Insurance, Securities, Brexit, Transition Period, Transitional Direction, HM Treasury, BoE, PRA, FCA
Previous Article
SNB on Reporting Data for COVID-19 Credit and Refinancing FacilityRelated Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.