February 24, 2021

Volume XI, Number 55

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Regulation Round Up: October 2020

The Financial Conduct Authority (“FCA”) updated its webpage on its responsibilities to mutual societies and its webpage on mutual societies’ annual returns and accounts.

The FCA published a press release announcing that it will be participating in the cross-border testing initiative organised by the Global Financial Innovation Network.

The European Banking Authority (“EBA”) published for consultation a revised version of its guidelines on sound remuneration policies.

The FCA published a Dear CEO letter it has sent to mortgage intermediaries, setting out the FCA’s view of the key risks mortgage intermediaries pose to their consumers and/or the markets they operate in.

28 October

The Financial Ombudsman Service (“FOS”) published issue 154 of ombudsman news.

The Prudential Regulation Authority (“PRA”) published:

  • consultation paper (CP19/20) on amendments to reporting and disclosure dates for resolution assessments;
  • consultation paper (CP20/20) on revising its operational continuity in resolution policy; and
  • published a consultation paper on implementing the Bank Recovery and Resolution Directive II ((EU) 2019/879) (“BRRD II Directive”) (CP18/20).
     

The Financial Action Task Force (“FATF”) published an updated version of its anti-money laundering (“AML”) and counter-terrorist financing (“CTF”) standards.

The FCA published a policy statement (PS20/12) on extending the implementation deadlines for solo-regulated firms under the Senior Managers and Certification Regime (“SM&CR”) relating to the certification regime and conduct rules.

The FCA published a new webpage on market making exemptions and a new webpage on net short positions reporting.

UK Finance and the Lending Standards Board published a report setting out best practice guidance on the transition from LIBOR for small- and medium-sized enterprise customers.

27 October

The FCA updated its webpage on its directory of certified and assessed persons to confirm the publication dates for directory person data submitted by firms under the SM&CR. European Securities and Markets Authority (“ESMA”) published:

  • press release announcing that it has updated the list of third-country venues, in the context of the opinions on post-trade transparency and position limits under the MiFID II Directive ((EU) 2014/65) (“MiFID II”) and the Markets in Financial Instruments Regulation ((EU) 600/2014) (“MiFIR”), to add UK venues; and
  • an update to its statement on the endorsement of credit ratings from the UK (ESMA33-5-857).

The European Central Bank (“ECB”) published:

  • consultation paper on the draft Eurosystem oversight framework for electronic payment instruments, schemes and arrangements (“PISA framework”);
  • consultation paper on the draft Eurosystem assessment methodology for electronic payment instruments, schemes and arrangements, which complements the PISA framework; and
  • consultation paper on the draft exemption policy for the PISA framework.

26 October

The FCA published a Dear CEO letter that it has sent to claims management companies.

The Financial Markets Law Committee (“FMLC”) responded to the HM Treasury consultation on expanding the financial promotion regime to include cryptoasset promotions.

ESMA published:

  • consultation paper (ESMA70-151-3076) on guidelines for consistency of supervisory reviews and evaluation processes of central counterparties (“CCPs”) under Derivatives (EMIR) - Regulation (EU) 648/2012 (“EMIR”);
  • press release announcing that it has postponed the application date of the updated EMIR validation rules; and
  • statement (ESMA70-155-7782) about the impact of the end of the Brexit transition period on 31 December 2020 on the trading obligation for shares under Article 23 of MiFIR.

The FCA published a webpage about its review into change and innovation in the unsecured credit market, which will be chaired by Christopher Woolard.

23 October

The FCA has published Handbook Notice 81, which sets out changes to the FCA Handbook.

The FCA responded to House of Commons Treasury Committee questions on the UK approach to combatting financial crime following the U.S. Treasury's Financial Crimes Enforcement Network (“FinCen”) papers leak.

The House of Commons Treasury Committee launched a new economic crime inquiry.

The FCA published an updated webpage on reporting simple, transparent and standardised securitisations.

The FMLC published a paper discussing issues of legal uncertainty arising from LIBOR transition.

The European Payments Council (“EPC”) published a document setting out criteria for participation of non-EEA countries in SEPA Schemes.

The FATF published a public statement on counter-proliferation financing.

The European Commission adopted a Delegated Regulation (C(2020) 7186 final) amending Delegated Regulation (EU) 2018/1229 supplementing the Central Securities Depositories Regulation ((EU) 909/2014) (“CSDR”) with regard to regulatory technical standards (“RTS”) on settlement discipline.

The ECB announced a new launch date for the Eurosystem Collateral Management System.

22 October

HM Treasury published a joint statement by members of the US-UK Financial Regulatory Working Group following their third meeting, which was held on 20 October 2020.

The European Commission launched a consultation relating to its review of the Alternative Investment Fund Managers Directive ((EU) 2011/61) (“AIFMD”).

21 October

 The Financial Services Bill 2019-21 (FS Bill) was introduced to Parliament. The text of the FS Bill has been published, together with explanatory notes, and the FS Bill has had its first reading in the House of Commons.

The FCA published an Insight article on improving diversity objectively.

The FCA published the new and updated webpages relating to whistleblowing.

The EBA published an opinion (EBA/Op/2020/17) on the prudential treatment of so-called "legacy instruments".

The FCA published an updated version of its money laundering regulations webpage.

The PRA published the joint Dear CEO letter that it and the FCA have sent to insurance firms regarding final preparations for the end of the Brexit transition period.

The Council of EU published a press release announcing it has agreed to its negotiating mandate on the proposed Directive amending MiFID II.

The Council of the EU published an "I" item note (11861/20 ADD 1) (dated 16 October 2020) relating to the proposed Directive amending the MiFID II Directive.

ESMA published a speech (dated 15 October 2020) by Steven Maijoor, ESMA Chair, in which he explains why retail investors and asset management are the pillars of a successful capital markets union.

HM Treasury published a policy statement on making amendments to the Benchmarks Regulation ((EU) 2016/1011) to support LIBOR transition.

ESMA published a consultation paper (ESMA70-151-3023) on draft RTS relating to CCPs under EMIR 2.2 ((EU) 2019/2099) (“EMIR 2.2”).

The UK government published a new version of the European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020. The previous version had been laid before Parliament on 8 October 2020 and has been withdrawn.

20 October

The FCA updated its statement on firms' handling of complaints during the COVID-19 pandemic.

The PRA published its second consultation paper (CP17/20) on implementing the CRD V Directive ((EU) 2019/878) (“CRD V”).

The FCA published its occasional paper 58 on understanding consumer financial wellbeing through banking data.

The FCA updated its webpage on its business interruption insurance test case.

The Regulation (EU) 2020/1503 and Directive (EU) 2020/1504 on European crowdfunding service providers were published in the Official Journal of the EU.

19 October

The European Commission published a communication (COM(2020) 690 final) outlining its work programme for 2021.

HM Treasury published a consultation paper relating to Phase II of its Financial Services Future Regulatory Framework Review.

The European Systemic Risk Board (“ESRB”) published a recommendation (dated 24 September 2020) on identifying legal entities (ESRB/2020/12).

The Financial Stability Board (“FSB”) published its final report on a toolkit of effective practices for cyber incident response and recovery.

The European Commission launched a consultation relating to its review of the Regulation on European long-term investment funds (ELTIFs) ((EU) 2015/760) (“ELTIF Regulation”).

16 October

FCA proposed further draft guidance for insurance and premium finance firms on customers in financial difficulty.

The FSB published a global transition roadmap providing a timetable of actions to be taken by financial and non-financial sector firms with exposure to LIBOR benchmarks to ensure a smooth transition away from LIBOR by the end of 2021.

15 October

The FCA published its Regulation round-up for October 2020.

The EEA Joint Committee’s Decision (92/2018) incorporating amended Omnibus I Regulation into the EEA Agreement was published in the Official Journal of the European Union.

HM Treasury published an update on its work relating to statutory instruments laid, or to be laid, under the European Union (Withdrawal) Act 2018 (“EUWA”) relating to financial services.

The following three draft versions were published on legislation.gov.uk:

HM Treasury published a summary of responses, together with its responses, to its consultation paper on updating the UK's prudential regime before the end of the Brexit transition period.

The House of Commons Treasury Committee published a press release announcing it has sent a letter to the FCA and a letter to the National Crime Agency (“NCA”) requesting a progress update on their engagement with the bank signature forgery campaign.

The UK Government laid the European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020 (Regulations) as well as the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020 (Regulations) (together with a draft explanatory memorandum) before Parliament.

14 October

The FSB published a report to the G20 finance ministers and central bank governors to update them on its ongoing work on market fragmentation.

The House of Commons Treasury Committee published a letter (dated 9 October 2020) from Nikhil Rathi, FCA Chief Executive, to Mel Stride, Committee Chair, where the FCA responds to House of Commons Treasury Committee questions about closures of EU-resident customers' UK bank accounts post-Brexit and the UK approach to EU crowdfunding service provider proposals.

The EBA published a final report (EBA/RTS/2020/07) on draft RTS specifying the prudential treatment of software assets under Article 36 of the Capital Requirements Regulation ((EU) 575/2013) (“CRR”).

The EBA published a consultation paper (EBA/CP/2020/22) setting out proposals to revise the guidelines on major incident reporting under the revised Payment Services Directive ((EU) 2015/2366) (“PSD2”).

13 October

The FSB published the final version of a report setting out ten high-level recommendations for the co-ordinated and effective regulation, supervision and oversight of global stablecoin arrangements.

The FSB published a stage 3 report in which it presents a roadmap to enhance cross-border payments.

The FCA published a speech given by Nisha Arora, FCA Director of Consumer and Retail Policy, on regulating consumer credit, during the COVID-19 pandemic and beyond.

12 October

The BoE published the opening remarks given by Dave Ramsden, Deputy Governor for Markets and Banking, at the launch of the BoE and FCA's Artificial Intelligence Public-Private Forum (“AIPPF”).

The EBA published an industry survey to gather information about the use of digital platforms by financial institutions.

The FCA updated its webpage on its directory of certified and assessed persons to clarify the data submission arrangements for solo-regulated firms.

The FCA published a speech given by Julia Hoggett, FCA Market Oversight Director, on market abuse in the time of the COVID-19 pandemic.

The European Parliament published a press release announcing that it had voted in plenary to adopt a resolution on the capital markets union (2020/2036(INI)). It has also published a provisional edition (P9_TA-PROV(2020)0266) of the resolution.

9 October

A group of central banks and the Bank for International Settlements (“BIS”) published a report on the foundational principles and core features of central bank digital currencies.

The PRA published a Dear CEO letter sent jointly by it and the FCA to PRA-regulated firms on their final preparations for the end of the Brexit transition period.

The FSB published a report on the use of supervisory technology (“SupTech”) and regulatory technology (“RegTech”) by regulatory authorities and regulated institutions.

8 October

The BoE published the financial policy summary and record (“FPSR”) of the meeting of its Financial Policy Committee (“FPC”) on 30 September 2020.

The House of Lords EU Services Sub-Committee published a letter (dated 21 September 2020) from John Glen, Economic Secretary and City Minister, responding to its letter seeking clarity on the post-Brexit future relationship in financial services.

EIOPA published a report on its approach to the supervision of product oversight and governance requirements under the Insurance Distribution Directive ((EU) 2016/97) (“IDD”).

The FCA published a speech given by Jonathan Davidson, FCA Executive Director of Supervision - Retail and Authorisations, on mortgages and the coronavirus - enabling positive consumer outcomes.

The European Parliament published a press release announcing that it had voted in plenary to adopt a resolution on digital finance (2020/2034(INL)). It has also published a provisional edition (P9_TA-PROV(2020)0265) of the resolution.

The Director of the Serious Fraud Office, Lisa Osofsky, gave a speech at the Royal United Services Institute, on future challenges in economic crime.

7 October

FSB and IMF published its 2020 progress report on phase 2 of G20 data gaps initiative.

The PRA published a letter to directors of credit unions on COVID-19 and direction modifying minimum provisioning requirements.

Commission Implementing Regulation (EU) 2020/1406 laying down implementing technical standards (“ITS”) on forms and procedures for co-operation under Articles 24 and 25 of the Market Abuse Regulation ((EU) 596/2014) (“MAR”) was published in the Official Journal of the EU.

6 October

The BoE published a speech given by Nick Strange, BoE Senior Technical Adviser for Operational Risk and Resilience, on operational resilience in a time of uncertainty.

The PRA published a consultation paper (CP15/20) on market risk, the calculation of risks not in value at risk (“RNIV”), and stressed value at risk (“sVaR”).

The FCA updated its webpage on its business interruption insurance test case and published the draft transcript of the consequentials hearing.

The FCA published a policy statement (PS20/10) prohibiting the sale to retail clients of derivatives and exchange traded notes referencing certain types of cryptoassets.

5 October

The FCA published a press release announcing that it has launched its digital sandbox pilot, in collaboration with the City of London Corporation, to support innovative firms tackling challenges caused by the COVID-19 pandemic. The FCA has also updated its webpage on the digital sandbox pilot.

EIOPA published a consultation paper (EIOPA-BoS-20/561) on a draft opinion on supervising the use of climate change risk scenarios in own risk and solvency assessment.

ESMA updated Q&As on Securitisation Regulation.

The European Commission published the text as well as the annexes of an Implementing Regulation on ITS on forms and procedures for co-operation under MAR.

The European Parliament published a press release announcing that it has adopted the Regulation and Directive on European crowdfunding service providers.

2 October

Correspondence was published about climate-related disclosure requirements for asset managers and FCA-regulated pension schemes between Christopher Woolard, FCA Interim Chief Executive (letter dated 22 September 2020) and Guy Opperman, Minister for Pensions and Financial Inclusion (response dated 30 September 2020).

The FCA updated its policy development update webpage, which sets out information on recent and future FCA publications.

The FCA published finalised guidance on cancellations and refunds aimed at credit and debit card firms and insurance providers.

The PRA published a Dear CFO letter (dated 30 September 2020) providing thematic feedback from its review of written auditor reports received in 2020 and subsequent discussions with firms.

ESMA published a press release announcing that it has published updated reporting instructions under the Regulation on money market funds ((EU) 2017/1131) (“MMF Regulation”).

ESMA published its work programme for 2021 (ESMA20-95-127).

The EBA published its final guidelines (dated 30 September 2020) (EBA/GL/2020/13) on the appropriate subsets of four sectoral exposures to which competent authorities may apply a systemic risk buffer under the CRD IV Directive ((EU)2013/36).

1 October

The PRA and the BoE published a new webpage providing firms and financial market infrastructures with information on the BoE's and PRA's approach to the temporary transitional power.

The FCA updated its Brexit temporary transitional directions and explained how it will use the temporary transitional power.

The FCA has published Handbook Notice 80, which sets out changes to the FCA Handbook made by the FCA board on 17 and 30 September 2020.

EIOPA published a press release announcing that it has launched a study on diversification in internal models under the Solvency II Directive (2009/138/EC).

EIOPA published its single programming document 2021-23(EIOPA-20-590) (dated 29 September 2020), which includes its annual work programme 2021.

The FCA published a statement on trade reporting and position limit obligations under MiFIR.

ESMA published updated statements setting out its approach, in light of Brexit, to applying key provisions of the following regulations:

  • Statement (ESMA80-187-610) on the consequences under the BMR; and
  • Statement (ESMA70-155-10962) on its approach under MiFID II/MiFIR and the CRR.

The European Commission published a set of FAQs on the setting-up and work of the platform on sustainable finance.

ESMA published its final report (ESMA35-43-2424) containing final draft technical standards on MiFID II third-country firm regime.

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John Verwey is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, change in control, market abuse, Electronic Money Regulations, Payment Services Regulations and client money rules. He represents a variety of clients that range from private equity firms and insurance intermediaries to global investment banks and sovereign wealth funds. 

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