HM Treasury Extends Consultation Dates for FRF and Solvency II Reviews
HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021. Additionally, the comment period for the review of Solvency II regime in UK was extended from January 19, 2021 to February 19, 2021.
The Future Regulatory Framework Review was established to determine how the overall approach to regulation of financial services needs to adapt to the new position of UK outside the EU and to ensure the regulatory framework is fit for the future. After focusing on the specific issue of coordination between the UK regulatory authorities in Phase I of the review, the government has now moved to Phase II, which will examine the broader regulatory framework for regulation of financial services in the UK. The consultation proposes an overall approach to the regulation of financial services, built on the existing Financial Services and Markets Act 2000 (FSMA) model, which the government believes should form the foundation of the future regulatory framework. However, at this stage, it does not present a full package of proposals, which will be part of the second stage of Phase II. Under these proposals, PRA and FCA will be responsible for designing and implementing the regulatory standards that apply to financial services firms and markets using their existing rule-making powers in FSMA.
The review of Solvency II regime addresses potential areas for reform that could not only improve the efficiency and effectiveness of the application of the UK prudential regulatory regime, but also allow it to better recognize the unique features of the UK insurance sector. The review of Solvency II will consider how the current prudential regulatory framework can be improved to ensure that it provides for an appropriate amount of capital for the insurance sector, for a high degree of policyholder protection, and for suitable standards of governance, risk management, and transparency. Views are also sought on how this regime can contribute to the climate change objectives of UK government. The October 2020 consultation is the first stage of the review of Solvency II, which will also be informed by the recent international prudential regulatory developments.
Related Links
Comment Due Date: February 19, 2021
Keywords: Europe, UK, Banking, Insurance, Securities, PMI, Brexit, Solvency II, Future Regulatory Framework, FSMA, Solvency II Review, HM Treasury
Featured Experts
Paul McCarney
Insurance product strategist; insurance domain expert; extensive experience developing risk assessment frameworks for insurers
Brian Robinson
Actuary; risk management specialist; corporate and capital modelling expert
Previous Article
IASB to Publish Phase 2 Benchmark Reform Taxonomy Update in DecemberRelated Articles
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.
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.
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.
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.
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.
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.
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
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.
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
ISSB Standards May Become Effective from January 2024
The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards.
