November 30, 2020

Volume X, Number 335


Regulatory Capital – UK Authorities Jointly Publish Statement on New UK Prudential Rules

On November 16, the UK’s HM Treasury, Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) jointly published a statement on the introduction of the new Investment Firms Prudential Regime (IFPR) and the UK implementation of Basel standards reflecting the CRR II Regulation (the Statement).

The European Union’s own reforms of regulatory capital/ prudential rules (the Investment Firms Directive and Regulation (collectively IFR)) are scheduled to go into effect on June 26, 2021; however, the UK Government has not committed to implementing the IFR in the UK in light of the Brexit transition period ending at 23:00 UK time on December 31. This is, in part, because of what the Statement refers to as “the general volume of regulatory reform in 2021”. However, HM Treasury, the FCA and the PRA have set a target to implement UK-specific and similar reforms by January 1, 2022. This does not affect the target implementation date for the final Basel III reforms (known as Basel 3.1) of January 1, 2023.

In the Statement, HM Treasury indicates that it will ensure the relevant legislation will be introduced in good time, and the FCA and the PRA collectively aim to provide the industry with as much insight on the final rules as possible ahead of January 1, 2022.

The legislative framework for these reforms will be introduced through the Financial Services Bill 2019-21.

The Statement is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 325



About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...