Featured Product

    FCA Announces Multiple Regulatory Updates for Financial Sector

    November 25, 2022

    The Financial Conduct Authority (FCA) published an interim report on credit information market study, consultations on greenwashing rules for sustainable investment products and synthetic USD London Inter-Bank Offered Rate (LIBOR), discussion paper on the potential competition impact of bigtech firms, and an announcement on the formation of a group to develop the code of conduct for ESG data and ratings providers.

    Below are key highlights of these recent updates:

    • Credit Information Market Study Interim Report. The report sets out interim findings from the credit information market study as well as proposals to improve the credit information sector to deliver higher quality and more comprehensive information for consumers and firms. Credit reference agencies build financial profiles of consumers which they sell to credit information users to inform lending and other decisions. In order to ensure that credit is offered only where appropriate and at a fair price, FCA proposed potential measures to reform industry governance arrangements and agree a set of priorities for the industry over the next three years, improve the quality and coverage of credit information, enable greater competition and innovation through potential changes to data access arrangements and more timely reporting of key metrics, and support consumers to access and dispute credit information. FCA seeks comments, until February 24, 2023, on the findings and potential measures outlined in this interim report. The report will be applicable to new and existing credit reference agencies, credit information service providers, users of credit information such as lenders, and consumer organizations.
    • Code of Conduct. FCA announced the formation of a group to develop a code of conduct for environmental social and governance (ESG) data and ratings providers. FCA also welcomed the appointment of the International Capital Market Association (ICMA) and the International Regulatory Strategy Group (IRSG) as the Secretariat leading this work. The Code will seek to be internationally consistent, by taking into account International Organization of Securities Commissions’ (IOSCO) recommendations as well as developments in jurisdictions such as Japan and the European Union. This will help encourage the development of consistent global standards. The group will be co-chaired by M&G, Moody’s, London Stock Exchange Group (LSEG) and Slaughter and May, and will be composed of stakeholders including investors, ESG data and ratings providers, and rated entities. The group will hold its first meeting in late of 2022.
    • CP22/20. In this consultation, FCA proposed new rules to protect consumers or retail investors from greenwashing and rebuild trust in sustainable investment products. The proposals include introduction of sustainable investment product labels, restrictions on how certain sustainability-related terms—such as ESG, green, or sustainable—can be used in product names and marketing for products that do not qualify for the sustainable investment labels, consumer-facing disclosures to help consumers understand the key sustainability-related features of an investment product, more detailed disclosures suitable for institutional investors or retail investors, requirements for distributors of products, such as investment platforms, to ensure that the labels and consumer-facing disclosures are accessible and clear to consumers, and a general anti‑greenwashing rule covering all regulated firms to avoid misleading marketing of products. FCA intends to set out final rules in a policy statement by the end of the first half of 2023. The consultation applies to all FCA-regulated firms and will be open for comments until January 25, 2023.
    • DP22/5. The purpose of this discussion paper is to stimulate a discussion on the potential competition impact identified using existing research to inform the approach to bigtech firms. FCA has published analysis focusing on the potential competition impact of bigtech’s entry into four vital retail sectors: payments, deposit-taking, consumer credit, and insurance. The paper suggests that bigtech firms can bring benefits to consumers by offering new innovative products with competitive pricing driven by increased efficiency, delivering healthy competition with incumbent financial services providers; however, in the long run, could pose competition risks by rapidly gaining market share and exploiting market power. The paper accompanies wider joint work on online safety, consumer protection and financial stability in digital markets, including work on operational resilience and the role of critical third parties with the Prudential Regulation Authority (PRA) and Bank of England, and work with Ofcom through the Digital Regulation Cooperation Forum (DRCF) on online safety and financial fraud to protect consumers from scams. The consultation period for this discussion paper will end on January 15, 2023. Going forward, FCA will publish a feedback statement in the first half of 2023, that sets out regulatory approach in response to the feedback received.
    • Consultation on synthetic USD LIBOR (CP22/21). FCA is seeking comments, until January 06, 2023 on proposal to require publication of the one-, three- and six-month USD LIBOR settings on a synthetic basis until end of September 2024, as well as on the appropriate methodology for constructing such synthetic US dollar LIBOR settings, and permitting use of these synthetic USD LIBOR settings in all contracts except cleared derivatives. FCA also seek views on winding down synthetic sterling LIBOR. FCA intends to compel LIBOR’s administrator ICE Benchmark Administration Limited to continue publishing three‑month sterling LIBOR until end of March 2024, after which it will cease permanently. With regard to synthetic yen LIBOR, FCA reminded market participants to be prepared for publication to cease permanently at the end of 2022.


    Related Links


    Keywords: Europe, UK, Banking, ESG, Climate Change Risk, Sustainable Finance, Libor, Credit Risk, Greenwashing, Disclosures, Bigtech, Regtech, ESG Data Product Providers, FCA

    Featured Experts
    Related Articles

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8793