On 9 November 2020, the European Banking Authority (EBA) issued a statement reminding financial institutions (FIs) affected by the end of the transition period to finalise the full execution of their contingency plans in accordance with the conditions agreed with relevant Member State competent authorities before the end of the transition period on 31 December 2020. The EBA also reminds FIs to ensure adequate communication regarding their preparations and possible changes to any affected EU customers.
Among other things FIs are reminded to ensure that associated management capacity, including appropriate risk management capabilities, is effectively in place in the EU, and is commensurate to the magnitude, scope and complexity of their activities and the risks they generate in their EU operations. The EBA also reminds FIs of the need to have clearly articulated and appropriate booking arrangements, to meet the outsourcing requirements as provided in the EBA guidelines on outsourcing arrangements, and not to outsource activities to such an extent that they operate as ‘empty shell’ companies as also provided in the EBA opinion on preparations for the withdrawal of the UK from the EU.
The EBA also draws to the attention of market participants that any eIDAS certificate issued to UK-based third party providers under the revised Payment Services Directive (PSD2) – in particular to account information service providers and payment initiation service providers, or third party providers (TPPs) – for the purpose of identification towards EU-based account servicing payment service providers (ASPSPs) will, as of the end of the transition period on 31 December 2020, no longer meet the legal requirements of Article 34 of Commission Delegated Regulation (EU) 2018/389, since these providers will no longer have an EU authorisation number and no longer be authorised/registered by a competent authority of an EU Member State. The EBA also calls upon qualified trust service providers in the EU that have issued eIDAS certificates to UK-based TPPs for the purpose of identification under the Delegated Regulation to revoke such certificates at the end of the transition period in order to prevent unauthorised access to customer payment accounts held at EU-based ASPSPs. The EBA further highlights to EU-based payment service providers (PSPs) their obligations under the Wire Transfer Regulation (WTR) and reminds them that, as of the end of the transition period, transfers of funds to/from the UK will be subject to the WTR requirements concerning payments from/to outside the EU.