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Topic: Regulation and compliance

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FCA updates statement on MoUs with European authorities

On 14 January 2021, the FCA updated its statement on memoranda of understanding (MoUs) with European authorities in the areas of securities, investment services and asset management, insurance and pensions, and banking by adding links to the following: MoU between the European Banking Authority, the Bank of England and the FCA. MoU between the European … Continue Reading

Responsible openness: The PRA’s approach to supervising banks – speech by David Bailey

Following our recent blog on the PRA’s new consultation on international banks, the regulator has issued a speech by David Bailey (PRA Executive Director, Financial Market Infrastructure) on the same topic. In his speech Mr Bailey describes in more detail the concept of responsible openness which Sam Woods first described in his 2019 Mansion House … Continue Reading

Consultation Paper 2/21 ‘International banks: The PRA’s approach to branch and subsidiary supervision’

Introduction On 11 January 2021, the PRA published Consultation Paper 2/21 ‘International banks: The PRA’s approach to branch and subsidiary supervision’ (CP2/21). The proposals in CP2/21 are relevant to existing or prospective PRA authorised banks and designated investment firms that are headquartered outside of the UK or are part of a group based outside of … Continue Reading

Publication of financial instruments reference data after the end of the Brexit transition period

On 6 January 2021, the European Securities and Markets Authority (ESMA) published its first set of Financial Instruments Reference Data System (FIRDS) files following the end of the Brexit transition period. ESMA states that the FIRDS delta files contain information about: Termination of all UK financial instruments: (ISIN, MIC) records for MICs in the UK … Continue Reading

ESMA promotes transparency for TLTRO III transactions

On 6 January 2021, the European Securities and Markets Authority (ESMA) issued a public statement promoting transparency in the IFRS financial statements of banks regarding accounting for the third series of the European Central Bank’s targeted longer-term refinancing operations (TLTRO III). The main recommendations for affected banks are to: Provide entity-specific disclosures of the significant … Continue Reading

The Short Selling (Notification Thresholds) Regulations 2021

On 6 January 2021, there was published on the legislation.gov.uk website The Short Selling (Notification Thresholds) Regulations 2021 together with an explanatory memorandum. The statutory instrument amends the onshored Short Selling Regulation by lowering the initial notification threshold for the reporting of net short positions to the FCA, in relation to the issued share capital … Continue Reading

Direction exempting market participants from the obligation to register with Ofgem under REMIT

On 4 January 2021, Ofgem issued a direction stating that under Article 9(1A) of the onshored Regulation on wholesale energy market integrity and transparency (REMIT), as amended, until further notice, the obligation to register with it does not apply to wholesale energy market participants that are already registered with the Northern Ireland Authority or with … Continue Reading

FCA updates indicative list of financial instruments subject to notification requirements

On 1 January 2021, the FCA published an updated indicative list of financial instruments that are subject to notification requirements by virtue of section 89F(1)(b)(iii) of the Financial Services and Markets Act 2000 and according to DTR 5.3.1R. The FCA reviews this list on an ad-hoc basis after taking into account developments on financial markets.… Continue Reading

What you may have missed last week

Happy New Year to all of our Regulation Tomorrow subscribers. Here is a list of the regulatory developments that occurred last week (week beginning 28 December 2020). HMT Open access regime for exchange traded derivatives Government Financial Reporting Manual: 2021-22 Guidance on annual reports and accounts FCA Statement on use of the Temporary Transitional Power … Continue Reading

Merry Christmas and a Happy New Year to our readers

To all of our global readers we would like to take this opportunity to wish you all a Merry Christmas and a Happy New Year. We will resume posting material on the UK page following the festive period on 4 January 2021 although if there are any significant developments we will endeavour to provide an … Continue Reading

ESMA publishes cloud outsourcing guidelines

On 18 December 2020, the European Securities and Markets Authority (ESMA) published a final report on guidelines on outsourcing to cloud service providers (CSPs). The purpose of the guidelines is to help firms identify, address and monitor the risks that may arise from their cloud outsourcing arrangements and to support convergent approach to the supervision … Continue Reading

Commission Delegated Regulation (EU) establishing RTS amending Delegated Regulation (EU) 2017/583 as regards adjustment of liquidity thresholds and trade percentiles used to determine the size specific to the instrument applicable to certain non-equity instruments

On 18 December 2020, the European Commission adopted a Delegated Regulation establishing regulatory technical standards (RTS) amending Delegated Regulation (EU) 2017/583 as regards adjustment of liquidity thresholds and trade percentiles used to determine the size specific to the instrument applicable to certain non-equity instruments. Commission Delegated Regulation (EU) 2017/583 sets out the transparency requirements applicable … Continue Reading

ESMA consults on the impact of algorithmic trading

On 18 December 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper on algorithmic trading. MiFID II / MiFIR require the European Commission to present reports to the European Parliament and the Council, after consulting ESMA, on a number of provisions. Article 90(1)(c) of MiFID II provides in particular for the submission … Continue Reading

Insolvency changes for payment and electronic money institutions: consultation (supplementary annex)

On 18 December 2020, HM Treasury issued a supplementary annex to its earlier consultation document on insolvency changes for payment and electronic money institutions. The supplementary annex consists of one chapter detailing the draft rules that will accompany the regulations that will introduce the Special Administration Regime for payments and electronic money firms.… Continue Reading

FCA updates webpage on notification and disclosure of net short positions

On 18 December 2020, the FCA updated its webpage on notification and disclosure of net short positions by adding a short section concerning short selling bans and reporting. The section explains that on 17 December 2020, the European Securities and Markets Authority (ESMA) issued a decision renewing its original decision on 16 March 2020 to … Continue Reading

ESMA renews its decision requiring net short position holders to report positions of 0.1% and above

On 17 December 2020, the European Securities and Markets Authority (ESMA) has renewed its decision to temporarily require the holders of net short positions in shares traded on a European Union (EU) regulated market, to notify the relevant Member State competent authority (NCA) if the position reaches, exceeds or falls below 0.1% of the issued … Continue Reading

Text of proposed Regulation on recovery and resolution of CCPs

On 17 December 2020, the Council of the EU published the text of the proposed Regulation on the recovery and resolution of central counterparties. The European Parliament adopted the Regulation at second reading on 14 December 2020 in accordance with the Council of the EU’s first reading position. The Regulation will enter into force twenty … Continue Reading

FSB global report on non-bank financial intermediation

On 16 December 2020, the Financial Stability Board published its latest global monitoring report on non-bank financial intermediation. The report presents the results of the annual FSB monitoring exercise to assess global trends and risks in non-bank financial intermediation (NBFI), covering 29 jurisdictions that account for 80% of global GDP. The annual monitoring exercise focuses … Continue Reading

FCA statement on the operation of the MiFID markets regime

On 16 December 2020, the FCA published a supervisory statement setting out how it will operate the pre- and post-trade transparency regime for the secondary trading of financial instruments after the end of the transition period. The statement replaces similar statements issued in March and October 2019. The statement covers a broad range of issues: … Continue Reading

FCA updates webpage on notification and disclosure of net short positions

On 15 December 2020, the FCA updated its webpage regarding the notification and disclosure of net short positions. As previously blogged HM Treasury intends to lay a statutory instrument to amend the notification threshold under Article 5(2) of the Short Selling Regulation from 0.2% to 0.1% of the issued share capital of an issuer.  This … Continue Reading

PRA publishes ‘Dear CEO’ letter on ‘Insurance Supervision: 2021 Priorities’

The Prudential Regulation Authority (PRA) has published a letter send by Anna Sweeney and Charlotte Gerken, joint executive directors of insurance, on its supervisory priorities for the insurance sector in 2021. The priorities identified are financial resilience, LIBOR transition, operational resilience, financial risks arising from climate change and changes in PRA responsibilities after the end … Continue Reading

Letter from Sarah Breeden and Melanie Beaman ‘UK Deposit Takers Supervision: 2021 Priorities’

On 15 December 2020, the PRA published a Dear CEO letter to PRA-regulated UK deposit takers setting out its supervisory priorities for 2021. Key points in the letter include: The economic consequences of COVID-19 are expected to continue and will cause additional impacts on banks and building societies, particularly once the cushion of temporary government … Continue Reading

Guidance: Notification thresholds under the Short Selling Regulation

On 15 December 2020, HM Treasury issued a guidance notice stating that following the end of the transition period it intends to lay a statutory instrument under the onshored Short Selling Regulation, amending the initial notification threshold under Article 5(2) for the reporting of net short positions to the FCA, in relation to the issued … Continue Reading
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