Featured Product

    UK Government Issues Statutory Instrument on IFPR Changes

    July 18, 2022

    The UK government published the statutory instrument titled "Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2022.” This instrument makes consequential changes as a result of the Financial Services Act 2021 (FS Act), which introduced the framework for the Investment Firms Prudential Regime (IFPR), a bespoke prudential regime for non-systemic investment firms. The instrument shall enter into force on August 17, 2022.

    The FS Act also provided for the transfer of certain prudential regulation set out in UK legislation to rules made by the Prudential Regulation Authority (PRA). This enabled the PRA to implement the remaining aspects of the Third Basel Accord (Basel 3 standards) through regulator rules and will enable the future implementation of the Basel 3.1 standards. This instrument includes further consequential amendments following the introduction of the IFPR and Basel 3 standards on January 01, 2022. It repeals the Banking Act 2009 (Exclusion of Investment Firms of a Specified Description) Order 2014 as it is redundant following the removal of Financial Conduct Authority (FCA)-regulated investment firms from the UK resolution regime. This instrument makes transitional provision in respect of risk retention requirements for certain securitizations following the implementation of the IFPR. These requirements relate to the retention of a material net economic interest in a securitization by the originator, sponsor, or original lender to better align their interests with those of investors.

    Additionally, this instrument makes amendments to ensure that short-term liabilities owed to both PRA-regulated and FCA-regulated investment firms with permission to underwrite or deal on own account will continue to be exempt from bail-in. Bail-in involves shareholders of a failing institution being divested of their shares and creditors of the institution having their claims cancelled or reduced to the extent necessary to restore the institution to financial viability. Finally, this instrument addresses further deficiencies arising from the withdrawal of the United Kingdom from the European Union. This instrument also corrects a typographical error in the Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021. There are no plans to consolidate the relevant legislation and HM Treasury does not propose to issue further guidance. The legislation applies to activities that are undertaken by small businesses, if they fall within the scope of the CRR or will fall in the scope of the IFPR. However, the number of small businesses (banks and investment firms) that fall within scope are minimal and HM Treasury does not consider there is a further need to minimize the impact of the requirements on small businesses. 


    Related Links


    Keywords: Europe, UK, Banking, Investment Firms, CRR, IFPR, Basel, Regulatory Capital, Statutory Instrument, Reporting, Securitization, HM Treasury, UK Government

    Featured Experts
    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    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.

    January 04, 2023 WebPage Regulatory News

    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.

    January 01, 2023 WebPage Regulatory News

    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.

    December 30, 2022 WebPage Regulatory News

    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.

    December 29, 2022 WebPage Regulatory News

    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.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    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.

    December 22, 2022 WebPage Regulatory News

    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.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699