United Kingdom (and EU regulation)

IOSCO consults on outsourcing principles to ensure operational resilience

On 28 May 2020, the International Organization of Securities Commissions (IOSCO) issued a consultation report concerning its ‘Principles for Outsourcing’. IOSCO prepared this consultation report before the COVID-19 outbreak. On 8 April 2020, the IOSCO board agreed to delay the publication of its reports to allow firms and financial institutions to redirect their resources to … Continue Reading

ESMA updates Q&As on the Securitisation Regulation

 On 28 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the Securitisation Regulation. Most of the new Q&As provide clarification on the different aspects of the templates contained in the draft technical standards on disclosure which are published on the European Commission’s website. In particular, ESMA clarifies how several specific … Continue Reading

ESMA updates EMIR Q&As

On 29 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the European Market Infrastructure Regulation (EMIR). ESMA has added a new Trade Repository (TR) Q&A 54 providing clarifications on reporting of over-the-counter derivatives by a financial counterparty (FC) on behalf of a non-financial counterparty (NFC) below the clearing threshold (NFC-) … Continue Reading

ESMA updates MiFID II / MiFIR Q&As on transparency and market structures topics

On 29 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on market structures and transparency issues under MiFID II / MiFIR. The updated Q&As provide clarification on the following topics: the default liquidity status, SSTI and LIS thresholds of non-equity instruments; the publication of transactions in an aggregated form; the conversion … Continue Reading

ESMA updates MiFID II Q&As on investor protection and intermediaries

On 28 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the implementation of investor protection topics under MiFID II / MiFIR. ESMA has added a new Q&A (see section 12, question 7) that provides clarification on the application of the MiFID definition of “acceptable minor non-monetary benefits”.… Continue Reading

Commission adopts Delegated Regulation on revisions to RTS on prudent valuation under CRR

On 28 May 2020, the European Commission adopted a Delegated Regulation (plus Annex) amending Delegated Regulation (EU) 2016/101 of 26 October 2015 supplementing the Capital Requirements Regulation (CRR) with regard to regulatory technical standards (RTS) for prudent valuation under Article 105(14) of the CRR. The Delegated Act introduces a temporary adjustment aimed at mitigating increases … Continue Reading

European Commission 2020 adjusted work programme: financial services aspects

On 27 May 2020, the European Commission adjusted its 2020 work programme in light of the COVID-19 pandemic. The adjustments include a non-legislative proposal relating to a renewed sustainable finance strategy being issued in Q4 2020 rather than Q3 2020. A due date for a report on the application of the Electronic Identification and Signature … Continue Reading

Allowing individuals to carry over CPD because of coronavirus

On 27 May 2020, the FCA issued a statement on its website providing guidance on when individuals may carry over continuing professional development (CPD). During the current situation the FCA will temporarily allow firms to let individuals in exceptional circumstances to carry over any uncompleted CPD hours to the next CPD year, i.e. the next … Continue Reading

Market Watch 63

On 27 May 2020, the FCA published Market Watch 63 setting out its expectations of market conduct in the context of increased capital raising events and alternative working arrangements due to the COVID-19 pandemic. Alongside the Market Watch, the FCA has also published Primary Market Bulletin 28 which provides an update for listed companies on … Continue Reading

FCA Handbook Notice 77

On 22 May 2020, the FCA published Handbook Notice 77. This Handbook Notice describes the changes to the Handbook and other material made by the FCA Board under its legislative and other statutory powers on 13 May and 21 May 2020. Where relevant, it also refers to the development stages of that material, enabling readers … Continue Reading

Operational resilience, banks and financial institutions: What does this mean for service contracts?

Our outsourcing and financial services teams have just published a client briefing exploring how the UK’s proposed operational resilience regulatory framework will impact contractual relationships between regulated firms operating in the financial services sector and their service providers. The online briefing is here.… Continue Reading

COVID-19 is placing unprecedented challenges on EU banks

On 25 May 2020, the European Banking Authority (EBA) published a preliminary assessment of the impact of COVID-19 on the EU banking sector. The EBA reports that the COVID-19 pandemic is expected to affect asset quality and therefore the profitability of banks going forward. However, it also notes that the capital accumulated by banks during … Continue Reading

Coronavirus and safeguarding customers’ funds: proposed guidance for payment firms

On 22 May 2020, the FCA published a short consultation proposing additional temporary guidance intended to strengthen payment firms’ prudential risk management and arrangements for safeguarding customers’ funds in light of the exceptional circumstances of the COVID-19 pandemic. In terms of prudential risk management the proposed temporary guidance covers: governance and controls, capital adequacy, liquidity … Continue Reading

PRA statement on guidance on application of CRR and IFRS 9 requirements to payment holidays

On 22 May 2020, the PRA issued a statement providing further information on the application of regulatory capital and IFRS 9 requirements to payment holidays granted or extended to address the challenges of the COVID-19 pandemic. In summary, the PRA’s view is that eligibility for, and use of, COVID-19 related payment deferrals or extensions to … Continue Reading

Cannabis: a UK Overview

Introduction: Cannabis and the majority of its derivative substances are controlled drugs in the UK, and their use remains illegal subject to some exceptions. Since November 2018 doctors in the UK have been able to prescribe certain cannabis-based products for medicinal use, but access is still limited because the key UK healthcare provider and regulator … Continue Reading

FCA announces support for customers who are struggling to pay their mortgage due to coronavirus

On 21 May 2020, the FCA issued proposals to update its guidance of 20 March 2020 to mortgage lenders, mortgage administrators, home purchase providers and home purchase administrators where home owners are struggling to pay their mortgage due to the exceptional circumstances arising out of the COVID-19 pandemic. If the proposals are confirmed, the FCA … Continue Reading

SRB publishes MREL policy under the Banking Package

In our April 2020 Banking Reform updater we considered the amendments that the Bank Recovery and Resolution Directive II make focussing in particular on total loss-absorbing capacity, the minimum requirements for own funds and eligible liabilities (MREL) and the changes to contractual recognition of bail-in. We also covered the changes to the single resolution mechanism … Continue Reading

EBA report on interlinkages between recovery and resolution planning

On 20 May 2020, the European Banking Authority (EBA) published a report, which assesses interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD), with the aim of enhancing synergies between the two phases and ensuring consistency in their potential implementation. The report: outlines the EBA’s observations deriving from its first … Continue Reading

ESMA calls for transparency on COVID-19 effects in half-yearly financial reports

On 20 May 2020, the European Securities and Markets Authority (ESMA) issued a public statement that addresses the preparation of interim financial statements according to IFRS and the interim management reports for the 2020 half-yearly reporting periods. The statement highlights the need for issuers to provide updated information that is useful to investors to adequately … Continue Reading

Regulators’ approach to reporting obligations during the COVID-19 outbreak

Regulatory authorities in the EU and the UK have delayed certain regulatory reporting requirements so that firms can concentrate on supporting their customers during this difficult period. The announcements regarding reporting requirements have come at different times and the purpose of this new briefing note is to consolidate the PRA, FCA and EU announcements in … Continue Reading

ECB public consultation on its guide on climate-related and environmental risks

On 20 May 2020, the European Central Bank (ECB) published a draft guide for consultation that explains how it expects banks to safely and prudently manage climate-related and environmental risks and disclose such risks transparently under the current prudential framework. Whilst the ECB’s immediate attention is on the COVID-19 pandemic, it remains committed to further … Continue Reading

Government publishes draft UK-EU Comprehensive Free Trade Agreement

On 19 May 2020, the Government published the following draft legal texts to accompany its February 2020 policy paper, The future relationship with the EU. The draft legal texts comprise: UK-EU Comprehensive Free Trade Agreement (chapter 17 deals with financial services). UK-EU CFTA Annexes. Fisheries Framework Agreement. Air Transport Agreement. Civil Aviation Safety Agreement. Annexes … Continue Reading

Loan Market Association (LMA) publishes list of loans referencing risk-free rates

On 20 May 2020, the LMA published on its website a list of loans in the market which reference risk-free rates (RFRs).  The LMA states that over the last year, bilateral and syndicated loans have been announced which reference the sterling (SONIA), US dollar (SOFR) and Swiss franc (SARON) RFRs, demonstrating an appetite among some … Continue Reading
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