BoE is consulting on an updated approach to authorizing and supervising international banks and insurers. BoE also issued guidance on its approach to international central counterparties (CCPs). BoE is also publishing letters to the relevant firms, which set out the its approach to the authorization of those firms, so that this process can proceed in an orderly manner. The proposed policy will be out for public comment until the end of February 2018 and PRA will be open for applications from the beginning of 2018.
The approach being consulted is specified in the consultation papers CP29/17 and 30/17. Sam Woods, the CEO of PRA, also issued a letter containing planning assumptions for firms’ preparations for the UK’s withdrawal from EU. This letter is relevant to banks, insurers, and designated investment firms that undertake cross-border activities between the UK and the rest of the EU.
The foundation of the BoE’s approach is the presumption that there will continue to be a high degree of supervisory cooperation between the UK and the EU. On this basis, banks and insurers in the European Economic Area (EEA) may (if they are not conducting material retail business) apply for authorization to operate as a branch in the UK. There are expected to be no implications of the proposed policy for the current operations of banks and insurers from non-EEA countries such as the U.S., Switzerland, and Japan. This approach is rooted in the substantial evidence that openness supports economic dynamism through a range of channels, raising growth, and boosting living standards.
Comment Due Date: February 27, 2018
Keywords: Europe, UK, Banking, Insurance, Securities, Brexit, CCPs, Guidance, BoE
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