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The European Banking Authority (EBA) published a statement on the end of the Brexit transition period for the benefit of consumers across the EU. It sets out information on UK firms ceasing or continuing to provide services in the EU; changes in cross-border
payments; EU customers’ access to their UK bank accounts; and the information customers should expect to receive from affected firms.
Source: EBA informs customers of UK financial institutions about the end of the Brexit transition period.
The Joint Committee of the European Supervisory Authorities (ESAs) issued a press release highlighting the impact of the change of status of ‘simple, transparent and standardised’ (STS) securitisation transactions after the end of the
Brexit transition period on 31 December 2020. The ESAs advise investors to assess the impact of this change of status on their balance sheet and investments ahead of 31 December 2020.
Sources: ESAs highlight the change in the status of simple, transparent and standardised (STS) securitisation transactions at the end of the UK transition period and
ESMA press release.
The Financial Conduct Authority (FCA) published a webpage explaining its proposed process for adding a new sub-fund to an umbrella scheme that will be in the temporary marketing permissions regime (TMPR) established by the Collective Investment Schemes
(Amendment etc.) (EU Exit) Regulations 2019, SI 2019/325 (CIS Regulations).
Source: Adding a new sub-fund to an umbrella scheme in the TMPR.
For further information, see: Brexit and financial services—the temporary permissions regime (TPR).
The FCA published the 32nd edition of its Primary Market Bulletin, which contains a reminder for issuers, investors and other market participants of the changes that will take effect when post-Brexit onshored legislation enters into force. The issue
also contains an update on the FCA’s work to implement some aspects of the onshored legislation.
Source: Primary Market Bulletin 32.
The International Swaps and Derivatives Association (ISDA) published an issue of its ‘IQ In brief’, following a 2 December 2020 European public policy virtual conference exploring the implications of the forthcoming end of the Brexit transition
period, central counterparty equivalence and the review of the EU Benchmarks Regulation (EU) 2016/1011.
Source: IQ in Brief: European Regulation.
Regulation (EU) 2020/2004 of the European Central Bank (ECB) of 26 November 2020, which amends Regulation (EU) 1333/2014 concerning statistics on the money markets (the Money Market Statistical Reporting (MMSR) Regulation), has been published
in the Official Journal of the EU (OJ). The amending regulation seeks to ensure that the European System of Central Banks will continue to receive daily statistical information relating to money market instruments for UK-located branches of reporting
agents after the Brexit implementation period ends on 31 December 2020.
Source: Regulation (EU) 2020/2004 of the European Central Bank of 26 November 2020 amending Regulation (EU) No 1333/2014 concerning statistics on the money markets (ECB/2020/58)
SI 2020/1416: Certain provisions of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019, which have been made under section 1 of the Sanctions and Anti-Money Laundering Act 2018, come into force on 7 December 2020.
Read the official version of this legislation.
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For further information on the effects of COVID-19 on financial services, see: Coronavirus (COVID-19)—key developments for financial services lawyers and
Coronavirus (COVID-19)—key financial services issues.
The FCA is consulting on proposed guidance for firms that will be providing Pay as You Grow (PAYG) options under the government’s Bounce Back Loan Scheme (BBLS). The FCA says it wants firms that provide such options to understand its
expectations in advance of starting to collect debts from their customers, and to understand how they can use and offer PAYG options in a manner compliant with Chapter 7 of the Consumer Credit Sourcebook (CONC). Responses are sought by
18 December 2020.
Sources: Bounce Back Loan Scheme: guidance for firms on use of Pay as You Grow options and
Bounce Back Loan Scheme—Pay as You Grow options and CONC 7 compliance.
For further information, see: Coronavirus (COVID-19)—UK and EU government support for businesses.
The Financial Stability Board (FSB) is to hold a virtual workshop on its recent holistic review of the March 2020 market turmoil, at 15.00 (CET) on 16 December 2020.
Source: Virtual workshop on the FSB holistic review of the March market turmoil.
The European Parliament’s Economic and Monetary Affairs Committee (ECON) announced that its negotiators have reached an agreement with the Council of the EU on targeted adjustments to the Markets in Financial Instruments Directive
(MIFID II) that were proposed by the European Commission as part of its Capital Markets Recovery Package in response to the coronavirus (COVID-19) pandemic.
Source: COVID-19 recovery deal: balance investor protection and firms’ compliance costs.
For further information, see: Coronavirus (COVID-19)—EU capital markets recovery package.
The FCA published new webpages giving information on MiFID reporting after the Brexit transition period and the cutover plan for firms migrating to FCA FIRDS and FITRS.
Sources: MiFID reporting after the Brexit transition period and
Cutover plan for firms migrating to FCA FIRDS and FITRS after the Brexit transition period.
For further information, see: The impact of Brexit on the MiFID II regime.
The European Securities and Markets Authority (ESMA) published its 2020 European Single Electronic Format (ESEF) XBRL taxonomy files, along with an update to the ESEF Conformance Suite, to facilitate implementation of Commission
Delegated Regulation (EU) 2019/815 (the ESEF Regulation).
Source: ESMA publishes 2020 ESEF XBRL taxonomy files and ESEF conformance suite.
The FCA published CP20/23: Quarterly Consultation Paper No. 30. CP20/23 includes a joint FCA/PRA consultation on their expectations for temporary, long-term absences.
Sources: CP20/23: Quarterly Consultation Paper No. 30 and
Joint PRA and FCA Chapter ‘Clarifying our expectations for temporary, long-term absences’ within the FCA Quarterly Consultation Paper.
The FCA published its latest policy development update, which provides information on its recent and upcoming publications.
Source: Policy development update.
The chief executive of the FCA, Nikhil Rathi, has written to the Treasury Committee providing further information on a number of topics following a session with the Committee on 4 November 2020. Rathi discussed a number of
issues including increasing the Financial Services Compensation Scheme levies, improvements that could be made to the scheme, the coronavirus (COVID-19) Bounce Back Loan Scheme, and a number of issues surrounding pensions
Source: Letter from chief executive of the FCA following the recent hearing on the work of the FCA, dated 26 November 2020.
The Bank of England (BoE) published its financial market infrastructure firms (FMIs) annual report for 2020, which sets out how the BoE has exercised its responsibilities in respect of supervising FMIs since the last
report. The report also sets out the BoE’s domestic and international policy work to strengthen the regulatory and supervisory frameworks for FMIs.
Source: The Bank of England's supervision of financial market infrastructures—annual report 2020.
The FCA launched guidance consultation GC20/5, ‘Guidance for insolvency practitioners on how to approach regulated firms’, which includes draft guidance in annex 1. Responses are due by 18 January 2021.
Source: Guidance for insolvency practitioners on how to approach regulated firms GC20/5.
The Prudential Regulation Authority (PRA) published consultation paper CP22/20, Designation of firms within certain consolidation groups, which sets out its proposed approach to designating entities within certain
banking UK consolidation groups as responsible for ensuring that consolidated prudential requirements are met during a transitional period. Responses are sought by 5pm on 16 December 2020.
Source: Designation of firms within certain consolidation groups.
The PRA published a policy statement (PS26/20) providing feedback to responses on its consultation papers, CP12/20 and CP17/20, on the implementation of the Capital Requirements Directive V (Directive (EU) 2019/878) (CRD
V). PS26/20 also sets out near-final rule instruments, statements of policy (SoP), supervisory statements (SS) and templates. The PRA says it does not plan to change the policy set out in the statement or
to make significant alterations to the text of the instruments before the final policy material is published.
Source: Capital Requirements Directive V (CRD V): Further implementation.
For further information, see: CRD IV—essentials.
The EBA published final draft regulatory technical standards (RTS) under the CRR on how institutions are to calculate the own funds requirements for foreign-exchange and commodity risk stemming from banking
book positions under the fundamental review of the trading book (FRTB) standardised and internal model approaches.
Source: EBA publishes final draft technical standards on the treatment of non-trading book positions subject to foreign-exchange risk or commodity risk under the FRTB framework.
The PRA issued a statement announcing its decision to maintain firms’ systemic risk buffer (SRB) rates at the rate set in December 2019 for a further year until December 2022, with no rate changes taking
effect until January 2024.
Source: PRA decision on systemic risk buffer rates.
The Single Resolution Board (SRB) published a dashboard designed to give a comprehensive overview of the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) across the banks under the SRB’s
remit. Based on bank data reported to the SRB, it illustrates the results concerning MREL targets, eligible liabilities and shortfalls in 2018 and 2019 under the Bank Recovery and Resolution Directive (BRRD
I) framework, and estimates of the MREL requirements under the new BRRD II framework with reference to end-2019 data. It also sets out the quarterly monitoring dashboard and highlights recent developments
on the cost of funding.
Source: Single Resolution Board publishes MREL dashboard.
The European Systemic Risk Board (ESRB) published a recommendation (ESRB/2020/14), dated 4 December 2020, in which it supports the proposed introduction by Finansdepartementet (the Norwegian Ministry of Finance)
of a systemic risk buffer (SyRB) rate in accordance with Article 133 of Directive 2013/36/EU (CRD IV).
Source: Recommendation of the European Systemic Risk Board regarding Norwegian notification of its intention to set a systemic risk buffer rate in accordance with Article 133 of Directive (EU) 2013/36/EU (ESRB/2020/14).
ISDA announced that eight technology vendors have licensed the ISDA Standardised Approach (SA) Benchmarking unit tests to promote consistent implementation of the standardised approach for calculating capital
requirements. The eight vendors are ActiveViam, Avera AI (Area 120 at Google), AxiomSL, Calypso, Finastra, FIS, MSCI and Murex.
Source: Eight technology vendors license ISDA SA Benchmarking unit test.
The FSB Regional Consultative Group (RCG) for the Americas has met to discuss global and regional macroeconomic and financial market developments, with members exchanging views on spillovers from the
policy responses to the March 2020 market turmoil and coronavirus (COVID-19) pandemic. Participants reiterated the importance of international co-operation to evaluate and co-ordinate policy responses,
including considerations for their future unwinding, once appropriate.
Source: FSB Americas group discusses financial market developments and enhancing cross-border payments.
The PRA published a statement on operational resilience, noting that the ability of a bank to recover from operational disruption has become even more important with the growing trend toward
technology-led business transformation. The PRA says it recognises the global and interconnected nature of banks and the importance of supervisory co-ordination, and is committed to working
closely with the European Central Bank and the Federal Reserve to ensure that supervisory approaches on operational resilience are well co-ordinated.
Source: Statement regarding supervisory co-operation on operational resilience.
The International Monetary Fund (IMF) published a research paper, ‘Cyber risk and financial stability: It’s a small world after all’, which sets out ‘six major strategies
that would considerably strengthen cybersecurity and improve financial stability worldwide’. The IMF says addressing all the gaps identified would require a collaborative effort from
standard-setting bodies, national regulators, supervisors, industry associations, the private sector, law enforcement, international organisations, and other capacity-development providers
Source: IMF blog: Cyber risk is the new threat to financial stability.
The European Commission adopted a delegated regulation that would remove Mongolia from the list of high-risk third countries in point I of the Annex to Delegated Regulation (EU)
2016/1675, which supplements the Fourth Money Laundering Directive (EU) 2015/849 (MLD4) by identifying high-risk third countries with strategic deficiencies.
Source: Commission Delegated Regulation (EU) …/... on amending Delegated Regulation (EU) 2016/1675 supplementing Directive (EU) 2015/849 of the European Parliament and of the Council, as regards deleting Mongolia from the table in point I of the Annex.
SI 2020/1289: This enactment is made in exercise of legislative powers under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018) in preparation for IP completion day.
This enactment amends three pieces of UK secondary legislation in relation to international sanctions. It comes into force in accordance with regulations made by the Secretary of
State under SAMLA 2018.
The FCA published an evaluation of the impact of the Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR). On the whole, the FCA found that the financial
advice market is improving, ‘albeit slowly’. However, it also found that many consumers are holding their money in cash rather than investing it, so are ‘missing
out on the potential opportunity to make their money work better for them in the longer term’.
Source: Evaluation of the impact of the Retail Distribution Review and the Financial Advice Market Review.
The FCA updated its webpage on consultation paper CP20/11: Complaints against the regulators. In light of concerns raised by some respondents regarding the timing of the
proposed amendments to the Complaints Scheme, a policy statement on the consultation will now not be published until towards the end of Q2 2021.
Source: CP20/11: Complaints against the Regulators (The Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England) (updated 8 December 2020).
The chair of the FCA, Charles Randell, has written to the Treasury Committee responding to additional questions that the Committee did not have time to raise during its
4 November 2020 evidence session. The questions concern the FCA’s complaints scheme consultation, including the extent to which it reached the general public,
and compensation issues.
Source: Letter from chair of FCA relating to complaints scheme consultation, dated 27 November 2020.
Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of
consumers and repealing Directive 2009/22/EC has been published in the Official Journal.
Source: Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC
The Competition and Markets Authority (CMA) Digital Markets Taskforce delivered advice to the government on the design and implementation of the new pro-competition regime
for digital markets. The advice published covers the potential design and implementation of pro-competitive measures for unlocking competition in digital markets.
The proposed new regime will govern the ‘most powerful’ tech firms and will establish a Digital Markets Unit (DMU) to ensure the ‘rules of the game’
are clear and complied with. The CMA has also published responses to the call for information issued in July 2020.
Sources: CMA advises government on new regulatory regime for tech giants ,
Digital Markets Taskforce and
Competition and Markets Authority advises government on new regulatory regime for tech giants .
The International Organization of Securities Commissions (IOSCO) launched a consultation on access to market data in secondary equity markets. Comments are requested
by 26 February 2021.
Source: IOSCO consults on issues and concerns regarding market data.
The European Commission published a draft implementing regulation determining revised benchmark values for free allocation of emission allowances for the
period from 2021 to 2025, under the EU Emissions Trading Scheme (ETS) Directive 2003/87/EC. The draft implementing regulation is open for feedback
until 4 January 2021.
Source: Commission Decision determining the benchmarks values for free allocation in the period 2021-2025.
EU ambassadors confirmed on behalf of the Council of the EU an agreement reached between the German presidency and the European Parliament’s negotiators
on the proposed regulation amending the Benchmarks Regulation (EU) 2016/1011 as regards the exemption of certain third-country foreign exchange
benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation. The amendments are intended to avoid any systemic risks
that might result from the phasing out of LIBOR by the end of 2021.
Source: Council endorses new rules addressing cessation of financial benchmarks.
For further information, see: Benchmarks Regulation—essentials.
The executive director for markets at the BoE, Andrew Hauser, gave a speech on the transition away from LIBOR, in which he highlighted three key actions
for market participants in the months ahead: moving all new business off LIBOR, adopting the ISDA fallbacks for existing derivatives, and reducing
the legacy of post-2021 LIBOR-linked contracts.
Source: Speech by Andrew Hauser—Bowing out gracefully: LIBOR’s retirement draws near.
For further information, see: LIBOR transition.
ICE Benchmark Administration Limited (IBA), the FCA-authorised and regulated administrator of LIBOR, launched a consultation on its intention to cease
publication of EUR LIBOR, CHF LIBOR, JPY LIBOR, GBP LIBOR and USD LIBOR after 31 December 2021 (or, in the case of USD LIBOR overnight and 1, 3, 6
and 12 months tenors, 30 June 2023). Feedback is sought by 5pm London time on 25 January 2021.
Source: ICE LIBOR consultation on potential cessation.
ISDA published a webinar in which ISDA CEO Scott O’Malia, David Bowman of the Federal Reserve Board, Edwin Schooling Latter of the Financial Conduct
Authority, Deepak Sitlani of Linklaters and Tom Wipf of Morgan Stanley discuss the path forward for LIBOR.
Source: ISDA webinar: The path forward for LIBOR.
Intercontinental Exchange Inc launched options and mid-curve options based on three-month SONIA index futures. ICE’s global head of financial derivatives,
Steve Hamilton, said SONIA options provide ‘another tool to help the market transition from LIBOR and manage nonlinear risk’.
Source: Intercontinental Exchange becomes first venue to launch SONIA options.
The BoE published the minutes of the SONIA Stakeholder Advisory Group for 2 November 2020, which was the inaugural meeting for new chair Scott McMunn.
The meeting included a review of market conditions including Brexit uncertainties, the ongoing impact of the coronavirus (COVID-19), and the potential
for negative rates.
Source: Minutes: SONIA Stakeholder Advisory Group 2 November 2020.
The European Commission launched a targeted consultation on the review of the regulation of central securities depositories (CSDs), and on improving
securities settlement in the EU. The consultation seeks feedback on a range of specific areas where targeted action may be necessary to ensure
the fulfilment of the objectives of Regulation (EU) 909/2014 (the CSDR) in a more proportionate, efficient and effective manner.
Responses are sought by 2 February 2021.
Source: Targeted consultation on the review of regulation on improving securities settlement in the European Union and on central securities depositories.
For further information, see: Central Securities Depositories Regulation—essentials.
The Council of the EU approved a set of conclusions on the European Commission's new action plan on the capital markets union (CMU), which was
published on 24 September 2020. The conclusions set out the Council's priorities among the outlined measures, to provide the Commission with
political steering and guidance when preparing future legislation and non-legislative initiatives. The Council says the highest priority should
be given to those actions that are important for improving the funding of the economy—particularly of SMEs—and that have the potential
to support a swift economic recovery in the context of the coronavirus (COVID-19) pandemic.
Sources: Capital markets union: Council approves conclusions on the Commission's new action plan and
Council conclusions on the Commission’s CMU Action Plan.
For further information, see: The Capital Markets Union.
The FCA published guidelines for the preparation of European Single Electronic Format (ESEF) annual financial reports (AFRs) for submission to
Source: Guidelines for the preparation of ESEF annual financial reports for submission to the FCA.
The FCA updated its securitisation repositories webpage to add the application form for registering as a UK securitisation repository.
Source: FCA updates securitisation repositories webpage.
The Commodity Futures Trading Commission (CFTC) adopted Electronic Trading Risk Principles and significant bankruptcy reforms for commodity
brokers in an open meeting on 8 December 2020. In advance of the meeting the CFTC also approved five final rules and withdrew the unadopted
portions of the 2018 Swap Execution Facilities and Trade Execution Requirement Proposed Rule.
Sources: CFTC unanimously approves final rules related to margin requirements for uncleared swaps for swap dealers and major swap participants,
CFTC unanimously approves technical amendments to reflect organizational changes,
CFTC unanimously approves final rules related to SEFs and withdraws unadopted proposals,
CFTC approves two final rules at December 8 open meeting and
FIA praises CFTC for adopting electronic trading and bankruptcy rules.
The European Commission published two draft delegated regulations, relating to the procedures for penalties imposed on trade repositories
(TRs) and on third-country central counterparties (CCPs) by ESMA under the European Market Infrastructure
Regulation (EU) 648/2012 (EMIR).
Feedback on both draft delegated acts is invited by 4 January 2021.
Sources: European Securities & Markets Authority (ESMA)—procedures for penalties imposed on trade repositories (updated rules) and
Rules of procedures for penalties imposed on third-country CCPs by ESMA.
For further information, see: EMIR—essentials.
The Committee on Economic and Monetary Affairs (ECON) of the European Parliament has recommended the proposed CCP recovery and resolution
regulation for second reading.
Source: Recommendation for Second Reading: On the Council position at first reading with a view to the adoption of a regulation of the European Parliament and of the Council on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 (09644/1/2020—C9 0376/2020—2016/0365(COD)).
The FCA published updated position limits for certain commodity derivative contracts traded on ICE Futures Europe. The limits have been
established under the Markets in Financial Instruments Regulations 2017, and are being revised in accordance with regulatory technical
standard 21, which states that position limits should be reviewed when there is a significant change in Open Interest, deliverable
supply, or any other significant change in the market.
Source: Update of position limits for certain commodity derivative contracts.
The FSB published its 2020 note on implementation progress of OTC derivatives market reforms. The FSB finds that overall progress in implementation
of the agreed G20 reforms to over-the-counter (OTC) derivatives markets is well advanced, but there has been limited additional implementation
of the reforms since October 2019.
Source: OTC derivatives market reforms: 2020 note on implementation progress.
The Derivatives Service Bureau (DSB) has announced its forthcoming industry consultation on the principles underlying the fee model for
the new unique product identifier (UPI). The first consultation will begin on 11 January and end on 5 March 2021. All market participants
that report to trade repositories—and that will be required to incorporate the UPI into their workflows—are encouraged
to respond to the consultation, in order to ensure that a broad range of views will be reflected in the service that will be introduced
Source: The Derivatives Service Bureau announces UPI 2021 industry consultation.
The market-led Working Group on Sterling Risk-Free Reference Rates has published a report, Transition in sterling non-linear derivatives,
intended for all non-linear derivatives market participants and end-users.
Source: Transition in sterling non-linear derivatives: The Working Group on Sterling Risk-Free Reference Rates.
ESMA has updated its validation rules for reporting under the Money Market Funds Regulation (EU) 2017/1131 (MMF Regulation). The proposed changes are not related to the published
XML schemas, but provide clarifications on existing validation rules in order to fix inconsistencies or ease the understanding
of the rules. They also extend the Classification of Financial Instruments (CFI) codes for eligible assets.
Source: ESMA updates reporting under the Money Market Funds Regulation.
The PRA published policy statement PS25/20, which sets out feedback to consultation paper CP10/20, ‘Simplified obligations
for recovery planning’. It also contains the PRA’s updated supervisory statement SS9/17, ‘Recovery
planning’ (appendix 1), which will simplify and reduce certain firms’ obligations under the Bank Recovery
and Resolution Directive 2014/59/EU (BRRD) (Simplified obligations).
Sources: Recovery planning and Simplified obligations for recovery planning.
The Basel Committee on Banking Supervision (BCBS) published a supplemental note to its 2014 guidelines on external audits
of banks. The supplemental note is issued following the implementation of the expected credit loss (ECL) accounting
Source: Supplemental note to external audits of banks—audit of expected credit loss.
The ECB published a speech by a member of its supervisory board, Elizabeth McCaul, on bank boards and supervisory expectations,
in which she discussed internal control frameworks and overall resilience. McCaul said the ECB had noted that, in some
banks, control functions have been insufficiently proactive in adapting to the coronavirus (COVID-19) environment,
in revising their risk appetite frameworks to align them with strategic goals, and in making their decision-making
processes more agile.
Source: Bank boards and supervisory expectations.
The SRB published a paper setting out its expectations for how banks engaging in mergers and acquisitions (M&As) can
ensure resolvability. The report provides more detail to banks on the information the SRB may need. It also gives insights
into the potential effects on resolvability in selected areas, including loss-absorption and recapitalisation capacity,
information systems, operational continuity, and access to financial market infrastructure (FMI) services and legal
Source: SRB publishes guidance on bank mergers and acquisitions.
The Association of Mortgage Intermediaries (AMI) published a report on the mortgage protection market, which draws
on research asking 5,000 consumers and 500 mortgage brokers about the protection market in September 2020.
The report highlights a lack of trust around claims statistics; poor customer understanding around Income Protection;
and the fact that the vast majority of consumers think life insurance is important but only the minority have
Source: The Association of Mortgage Intermediaries (AMI) launches new report based on extensive consumer and adviser research.
The European Insurance and Occupational Pensions Authority (EIOPA) launched a pilot dashboard showing the
insurance protection gap for natural catastrophes. It aims to represent the drivers of a climate-related
insurance protection gap in order to identify measures that will help in decreasing society’s
losses in the event of natural catastrophes.
Source: EIOPA’s pilot dashboard addresses the natural catastrophe protection gap.
EIOPA submitted to the European Parliament, the Council of the European Union and the European Commission,
its fifth and final annual report on long-term guarantees (LTG) measures and measures on equity risk.
Source: EIOPA publishes its fifth annual analysis on the use and impact of long-term guarantees measures and measures on equity risk.
EIOPA published the results of its peer review of co-operation between EU supervisory authorities on the
supervision of cross-border activities of insurance undertakings. The peer review focuses on how national
supervisory authorities (NSAs) approach insurance cross-border activities, how they exchange supervisory
information and collaborate, how data is stored, and practices regarding portfolio transfers.
Source: EIOPA recommends actions and best practices to national supervisory authorities to improve supervisory practices regarding cross-border activities.
The BoE published a speech by its executive director for insurance supervision, Charlotte Gerken, given
at the Insurance Risk and Capital EMEA 2020 Virtual conference. Gerken outlines the current stress
test for UK insurance firms under the Solvency II regime and sets out the PRA’s plans for stress
tests for the insurance industry in 2021 and 2022, including a climate stress test.
Source: The fox and the hedgehog: preparing in a world of high risk and high uncertainty—speech by Charlotte Gerken.
The International Association of Insurance Supervisors (IAIS) issued a press release summarising its 27th
annual conference, which was preceded by its annual general meeting (AGM) and several weeks of committee
meetings. During the conference and meetings, which were held virtually, the IAIS says it finalised
numerous projects, discussed the impact of the coronavirus (COVID-19) on the global insurance sector
as well as the associated supervisory responses, and set the direction for future activities in 2021.
Source: IAIS AGM and 27th annual conference reflect on response to COVID-19 and set direction for future activities.
Insurance Europe (IE) published its response to a questionnaire conducted by the IAIS on infrastructure
and strategic equity investments. While IE welcomes the IAIS proposal for a differentiated and more
appropriate capital treatment of infrastructure and strategic equity investments, it says further improvements
should be made to the criteria to better reflect the actual risks the assets pose to insurers and the
different approaches insurers take in making long-term investments.
Source: ICS treatment of infrastructure and strategic equity investments should better reflect risk posed to insurers.
HM Treasury launched a consultation on potential amendments to insolvency rules for payment and
electronic money institutions (the institutions). Proposed changes include helping protect
customers where the institutions have gone into insolvency thereby improving the outlook for
the payment and e-money industries. The consultation closes at 11.59 pm on 14 January 2021.
Source: Insolvency changes for payment and electronic money institutions: consultation.
The European Payments Council (EPC) announced that, following the publication of the ‘Mobile
Initiated Single European Payment Area (SEPA) (Instant) Credit Transfer Interoperability Guidance’
(MSCT IG) document in November 2019, the ad-hoc multi-stakeholder group on MSCTs (MSG MSCT)
has conducted a more detailed analysis on the technical interoperability of MSCTs based on
Source: Technical interoperability of MSCTs based on payer-presented data.
For further information, see: SEPA Regulation and cross-border payments—essentials.
The EPC published its annual Payment Threat and Fraud Trends report, providing an overview of the
most important threats and other ‘fraud enablers’ in the payments landscape, including
social engineering and phishing, malware, advanced persistent threats, (distributed) denial
of service, botnets and monetisation channels. For each threat, an analysis is made of the
impact and context, and suggested controls and mitigations.
Source: 2020 Payment Threats and Fraud Trends report.
The signatories to the voluntary Authorised Push Payment (APP) Contingent Reimbursement Code have
agreed to extend until 30 June 2021 the interim funding to compensate eligible victims provided
the customer, sending and recipient banks have met the standards expected of them under the
Code. The extension of interim funding is intended to provide further time for legislation
to be agreed and implemented, placing the voluntary Code on a statutory footing.
Source: Interim funding for APP scam victim compensation to continue to 30 June 2021.
The Payment Systems Regulator (PSR) published terms of reference and minutes for its various Access
to Cash working groups, which are run jointly with the FCA. The terms of reference documents
set out objectives, work programmes and membership of the groups.
Sources: FCA/PSR Access to Cash—Working Group 1: Consumer and SME Needs (Terms of Reference),
FCA/PSR Access to Cash—Working Group 2: Access to Branch Services (Terms of Reference),
FCA/PSR Access to Cash—Working Group 3: Access to Cash Withdrawals (Terms of Reference),
FCA/PSR Access to Cash—Working Group 4: Digital Transition (Terms of Reference),
FCA/PSR Access to Cash—Steering Group (meeting minutes—9 November 2020),
FCA/PSR Access to Cash—Working Group 1: Consumer and SME Needs (meeting minutes—5
November 2020), FCA/PSR Access to Cash—Working Group 1: Consumer and SME Needs (meeting minutes—12 November 2020),
FCA/PSR Access to Cash—Working Group 2: Access to Branch Services (meeting
minutes—5 November 2020), FCA/PSR Access to Cash—Working Group 2: Access to Branch Services (meeting minutes—12 November 2020),
FCA/PSR Access to Cash—Working Group 3: Access to Cash Withdrawals (meeting
minutes—2 November 2020), FCA/PSR Access to Cash—Working Group 4: Digital Transition (meeting minutes—2 November 2020) and
FCA/PSR Access to Cash—Working Group 4: Digital Transition (meeting
minutes—9 November 2020).
The European Commission’s executive vice president and commissioner in charge of competition
policy, Margrethe Vestager, has given a speech entitled ‘The Interchange Fee Regulation
in a rapidly evolving payment landscape: Impact and way forward’.
Source: Speech by EVP Margrethe Vestager on ‘The Interchange Fee Regulation in a rapidly evolving payment landscape: Impact and way forward’.
For further information, see: Interchange Fee Regulation—essentials.
The head of the Bank for International Settlements (BIS) Innovation Hub, Benoît Cœuré,
gave a speech at the World FinTech Festival on, amongst other things, central bank
digital currency (CBDC), the Innovation Hub’s strategic themes and plans for
new centres in Toronto, London, Stockholm Paris and Frankfurt, and a strategic partnership
with the Federal Reserve Bank of New York by December 2021.
Source: Moving fast and not breaking things—central banks and innovation.
The BoE published a statement regarding the fifth meeting of the Climate Financial
Risk Forum (CFRF), which was hosted jointly by the PRA and the FCA in November
2020. Among other topics, the CFRF noted the importance of progress in developing
and understanding climate data and metrics, and decided that this should be
a thematic topic that is addressed by all CFRF working groups in the next phase
Source: Fifth meeting of the PRA and FCA’s joint Climate Financial Risk Forum.
The chair of ESMA, Steven Maijoor, delivered a speech on ‘The three (apparent)
paradoxes of sustainability reporting and how to address them’. Maijoor
discussed proportionality and standardisation of disclosure requirements, and
the dangers of greenwashing.
Source: ESMA: Steven Maijoor delivers keynote about paradoxes of sustainability reporting.
The International Capital Market Association (ICMA) published new guidelines on
the disclosures that should be made by issuers on their climate change strategy
when raising funds in debt capital markets. The guidelines are intended to
support the growth of climate transition finance.
Source: Green & Social Bond Principles launch new guidelines on climate transition finance.
ISDA responded to ESMA consultation on reporting of non-financial information by
entities in scope of the Non-Financial Reporting Directive (NFRD).
Source: ISDA responds to ESMA consultation on reporting by NFRD entities.
The FSB is to hold a virtual workshop on its recent publication on the implications
of climate change for financial stability, at 13.00 (CET) on 15 December 2020.
Source: FSB: Virtual workshop on the implications of climate change for financial stability.
The United Nations Environment Programme Finance Initiative (UNEP FI) has published
draft guidance on reporting under the Principles for Responsible Banking (PRB)
for comment. Banking members can provide feedback on the draft by 29 January
Source: Guidance document on reporting.
The International Regulatory Strategy Group (IRSG) published a report,
in collaboration with DAC Beachcroft LLP, on the impact of the trend
towards data localisation on the financial services sector. It looks
at restrictions on the extra-territorial transfer of data and suggests
ways to address the concerns of national governments and regulators.
Source: IRSG report: How the trend towards data localisation is impacting the financial services sector.
11 December 2020
Banks and mutuals
The EBA will publish the
results of its 2020 EU-wide transparency exercise,
assessing the preliminary impact of coronavirus
on the banking sector, on 11 December 2020.
14 December 2020
The FCA will begin to publish solo-regulated
firms’ Directory Persons data on the FS Register
from 14 December 2020
The Financial Services (Gibraltar) (Amendment) (EU
Exit) Regulations 2020 come into force on 14 December
Fund managers should expect to be able to submit their
updated notification regarding the temporary permissions
regime from 14 December 2020. Fund managers should
only submit their updated notification when they
are certain that all the correct funds are included.
Updated notifications must be received before the
end of 30 December 2020. Practice Note: Brexit
and financial services—the temporary permissions
Payment services and systems
Deadline for comments on the EBA’s consultation on
revisions to its guidelines on major incident reporting
15 December 2020
Investment funds and asset management
Deadline for responses to the FCA’s call for input to
help shape its work on improving the consumer investment
16 December 2020
The PRA published policy statement PS15/20: Pillar
2A: Reconciling capital requirements and macroprudential
buffers. PS15/20 provides feedback to responses
to Consultation Paper CP2/20 ‘Pillar 2A:
Reconciling capital requirements and macroprudential
buffers’. It also contains the PRA’s
final policy in Supervisory Statement 31/15 (SS31/15)
‘The Internal Capital Adequacy Assessment
Process (ICAAP) and the Supervisory Review and
Evaluation Process (SREP). The PRA will apply the
Pillar 2A reduction, where applicable, on or before
16 December 2020 and for efficiency align the assessment
to related processes.
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