Featured Product

    HMT Publishes Policy Statement on Critical Third-Party Regime

    June 10, 2022

    Her Majesty's Treasury (HMT) published a policy statement proposing the approach to mitigate risks from critical third parties, such as cloud-based service providers, to the UK finance sector. Additionally, HMT and the Japanese Financial Services Agency established a UK-Japan Financial Regulatory Forum.

    Policy statement on "Critical" Third-Party Regime

    The statement provides details on HM Treasury’s proposal for reducing the risks of systemic disruption to the financial regulators’ objectives, including financial stability and market confidence. Under this proposal, HM Treasury, in consultation with the financial regulators and other bodies, will designate certain third parties that provide services to firms as "critical." The financial regulators will then be able to make rules, gather information, and take enforcement action, in respect of certain services that critical third parties provide to firms of particular relevance to the regulators’ objectives (which the regulators refer to as "material" services). The proposed regime will allow financial regulator to directly oversee services that critical third parties provide to firms. This will enable the regulators to ensure that services critical third parties provide to firms in the finance sector are resilient, thus reducing the risk of systemic disruption. The proposed regime will provide financial regulators with powers to:

    • request information directly from critical third parties on the resilience of their material services to firms, or their compliance with applicable requirements.
    • commission an independent "skilled person" to report on certain aspects of a critical third party’s services.
    • appoint an investigator to look into potential breaches of requirements under the legislation.
    • interview a representative of a critical third party and require the production of documents.
    • enter a critical third party’s premises under warrant as part of an investigation.

    As a next step, the UK government intends to legislate the aforementioned critical third-party regime, to publish a joint discussion paper that details how these powers granted to financial regulators might be exercised, and to seek views from industry on the most effective and proportionate way to do so. The discussion paper will also explore potential specific ways for the financial regulators to coordinate the exercise of their powers with overseas financial regulators, and UK authorities and regulators from outside the financial services sector.

    UK-Japan Financial Regulatory Forum. HM Treasury, in collaboration with the Japanese Financial Services Agency, established a UK-Japan Financial Regulatory Forum, setting out provisions for the exchange of information, consultation, deference, technical mediation, and cooperation on diversity in finance, sustainable finance, and other emerging issues. The Forum will support closer cooperation on areas of mutual interest, including public-private partnerships in insurance, sustainable finance, and financial innovation. The UK and Japan also discussed their approaches for supporting international firms to access their markets, cross-border data flows, diversity in financial services, and opportunities in the insurance, asset management and fintech sectors.

     

    Related Links


    Keywords: Europe, UK, Banking, Third-Party Risk, Cloud Service Providers, Systemic Risk, Sustainable Finance, Insurance, Regtech, UK-Japan Financial Regulatory Forum, Operational Resilience, JFSA, HM Treasury

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521