FCA published a policy statement (PS19/5) that sets out its responses to the feedback received on proposed changes to the FCA Handbook and Binding Technical Standards (CP18/28 and CP18/36), temporary permissions regime for inbound firms and funds (CP18/29), Brexit and contractual continuity (CP19/2), and regulatory fees and levies (CP18/34). Additionally, FCA has issued transitional directions and prudential transitional direction with respect to its approach to use the temporary transitional power.
FCA had received 92 responses to the consultation papers—CP18/28, CP18/29, CP18/36, and CP19/2. Annex 1 to PS19/5 contains the list of respondents who did not ask for their responses to be kept confidential. FCA has published the handbook and Binding Technical Standards in the near-final form so that stakeholders are clear on the changes expected to be made to the regulatory framework. These Binding Technical Standards impact the stakeholders under the varied EU legislation, including the Credit Rating Agency Regulation, Capital Requirements Directive and Regulation, Packaged Retail and Insurance-based Investment Products Regulation, Markets in Financial Instruments Directive and Regulation, and Insurance Distribution Directive, among others. Based on the timetable of the Parliament, FCA expects its Board to make the instruments final on March 28, 2019 if a withdrawal agreement has not been ratified by UK and EU.
HM Treasury has laid draft regulations in the Parliament (Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019), which grant FCA the powers to make transitional directions to mitigate any disruption caused by EU exit-related changes to firms’ obligations. These directions give regulated persons time to adapt to the Brexit-related changes to the UK financial services regulation. Continuity is generally achieved by applying a standstill; therefore, firms may continue to comply with the pre-exit version of an obligation. In addition, the temporary permission firms are allowed substituted compliance for home-state obligations. This power would only be used if UK leaves EU without an implementation period. The directions have been prepared on the assumption that the EU exit statutory instruments referred to in them will be in force by the exit day.
Keywords: Europe, EU, UK, Banking, Insurance, Securities, Brexit, FCA Handbook, Transitional Direction, PS19/5, CRA, FCA
Previous ArticleIMF Publishes Reports on 2018 Article IV Consultation with Malaysia
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.