Featured Product

    PRA and FCA Issue Letter on Preparations for End of Brexit Transition

    October 12, 2020

    PRA sent a letter to specific firms to request information about their operational readiness to implement a negative or zero bank rate. Firms are requested to complete the data template (Appendix) by November 12, 2020. In addition, PRA and FCA jointly issued a letter to help ensure that firms and their clients are ready for a range of scenarios at the end of the transition period of the withdrawal of UK from EU. The letter highlights that the final steps by individual firms are required to ensure preparedness for the end of the transition period. These actions will vary among firms and may differ between UK-incorporated subsidiaries and branches of overseas firms. With respect to the final preparations for the end of the transition period, the letter sets out key focus areas for firms, including wholesale banking business and contracts, data, trading venues, payments, provision of retail banking services, and others.

    The following are the key highlights of the joint letter from PRA and FCA on preparations for the end of the transition period:

    • Where necessary, firms should continue to take steps to facilitate the continuity of business and contracts. Firms should proactively engage with affected clients to complete repapering/on-boarding and novate existing trades where necessary to ensure clients can manage risks related to lifecycle events. Firms should also ensure that they have fully considered the impact on each client and whether the proposed changes, including any transfer of business if applicable, are in the best interests of each client.
    • In the absence of a decision by EC on UK data protection adequacy, the use of standard contractual clauses in relevant contracts is one of the available ways that the European Economic Area firms can comply with the cross-border personal data transfer laws of EU, after the expiry of the transition period. Firms may need to consider whether contracts involving the transfer of personal data to their firms from the European Economic Area need to be updated to comply with EU requirements or to consider other appropriate measures. This could include reviewing the position for EU vendors or third parties on which services of firms rely. 
    • Firms should consider how they will continue to meet their trading obligations in both EU and UK under a range of scenarios at the end of the transition period, along with the implications of this for their clients. Firms should also discuss their plans and assumptions with FCA, particularly if a firm plans to make any changes to its current systems and processes.
    • UK will retain access to the Single European Payment Area (SEPA) schemes after the end of the transition period, subject to its continued compliance with the established participation criteria. Firms should continue to take all reasonable steps to avoid disruption to payments. This includes ensuring that the required information is included on SEPA payments, where necessary, and that customers are aware of the need to provide the information.
    • Continued actions of UK banks to prepare their EU subsidiaries will enable their provision of services to many EU customers after the end of the transition period. However, the ability of UK banks to continue providing some services to customers resident in EU will be determined by national regimes. Depending on the national regime in place, the ability of UK banks to provide certain services to EU-based customers may be impaired. If firms have customers in the European Economic Area, they should have plans in place on the approach to servicing existing contracts with them. Firms should also continue to take the necessary steps to manage any remaining operational risks.

     

    Related Links

    Keywords: Europe, UK, Banking, Securities, Insurance, Brexit, Temporary Transitional Power, Operational Risk, Brexit Transition, PRA, FCA

    Related Articles
    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
    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
    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
    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
    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
    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
    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
    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
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697