FS weekly highlights—16 April 2020

FS weekly highlights—16 April 2020

In this issue

 

 

Coronavirus (COVID-19)
MiFID II
UK, EU and international regulators and bodies
Authorisation, approval and supervision
Prudential requirements
Financial stability
Financial crime
Complaints, compensation and claims management
Investigations, enforcement and discipline
Competition in financial services
Regulation of benchmarks and IBOR reform
Regulation of capital markets
Regulation of derivatives
Investment funds and asset management
Banks and mutuals
Consumer credit, mortgage and home finance
Regulation of insurance
Regulation of personal pension and stakeholder products
Payment services and systems
Fintech and cryptoassets
Sustainable finance
Dates for your diary

 

Coronavirus (COVID-19)

Coronavirus (COVID-19)–PRA maintains systemic risk buffers and issues CRR II modification by consent

The Prudential Regulation Authority (PRA) decided to maintain firms’ systemic risk buffer (SRB) rates at the rates set in December 2019, in response to the economic shock caused by the coronavirus (COVID-19) pandemic. The rates will be reassessed in December 2021. The PRA also published a modification by consent of the calculation on the total exposure measure of the leverage ratio, to address the impact of COVID-19.

Sources: PRA decision on Systemic Risk Buffer rates and Modification by consent of the calculation of the total exposure measure of the Leverage Ratio.

For further information on systemic risk buffers and leverage ratio, see:  CRD IV—essentials.

Coronavirus(COVID-19)—FPC to prepare additional financial stability report

The Financial Policy Committee (FPC) issued a statement following its meeting on 9 April 2020 in which it reviewed developments in the financial system related to the outbreak and spread of the coronavirus (COVID-19). The FPC usually assesses risks to UK financial stability and the resilience of the UK financial system and publishes that assessment in biannual Financial Stability Reports. Given the material developments in recent weeks due to COVID-19, however, the FPC plans to publish an additional interim Financial Stability Report on 7 May 2020.

Source: Financial Policy Committee statement.

Coronavirus (COVID-19)—FCA confirms package to help users of consumer credit products

Following a short consultation, the Financial Conduct Authority (FCA) confirmed the package of targeted temporary measures to help people with some of the most commonly used consumer credit products who are affected by the coronavirus (COVID-19) pandemic. The rule changes were in force from 9 April 2020 and the full range of measures applied by 14 April 2020. This is to allow firms time to ensure they have the appropriate level of resources available to handle customer requests. All firms will be ready to receive customer requests by 14 April, although some firms, including the major banks and building societies, will be adopting the changes immediately.

Source: FCA confirms temporary financial relief for customers impacted by coronavirus.

Coronavirus (COVID-19)—FCA Dear CEO Letter: BI Insurance for SMEs

Christopher Woolard, Interim Chief Executive of the FCA, wrote to insurance firms on conduct in relation to business interruption (BI) insurance. Woolard states for those BI policies that do not cover pandemics, insurers are not under an obligation to pay out in relation to the coronavirus (COVID-19) pandemic. The FCA does not consider there to be reasonable grounds to intervene in such circumstances. Woolard emphasises that where a firm does have an obligation to pay out on a policy, it must assess claims and settle them quickly. Woolard also considered the role of the Financial Ombudsman Service (FOS) and BI insurance.

Source: FCA Dear CEO letter on insuring SMEs: business interruption.

For further information on the SM&CR, see:  Application of the SM&CR to insurers.

Coronavirus (COVID-19)—FCA Dear CEO Letter: Lending to SMEs

Christopher Woolard, Interim Chief Executive of the FCA, wrote to banks lending to small businesses during the coronavirus (COVID-19) pandemic, in an effort to avoid a repeat of the historic issues in banks’ treatment of SMEs. Woolard sets out the responsibilities of Senior Managers in lending to SMEs under the Senior Managers and Certification Regime (SM&CR), in addition to the role of boards in overseeing Senior Managers discharging their responsibilities suitably and collecting information on their firm’s treatment of SMEs. Woolard has also announced that the FCA has established a small business unit to coordinate FCA activities across small business issues.

Source: FCA Dear CEO letter: lending to small businesses.

For further information on the SM&CR, see:  Senior Managers and Certification Regime—essentials for SM&CR banking firms.

Coronavirus (COVID-19)—FCA updates regulatory guidance for funds

The FCA updated its webpage setting out its expectations regarding funds in light of the coronavirus (COVID-19) pandemic. It aims to provide guidance on the challenges firms are facing both operationally and as a result of significantly increased volatility in global markets.

Source: Update - FCA expectations regarding funds in light of coronavirus (Covid-19).

Coronavirus (COVID-19)—FCA to launch daily email round-up

The FCA said it will launch a daily email round-up of FCA coronavirus (COVID-19) news and publications on its website.

Source: Sign up to receive FCA coronavirus updates.

Coronavirus (COVID-19)—FSCS measures taken in response to the pandemic

The Financial Service Compensation Scheme (FSCS) published a statement from its chief executive, Caroline Rainbird, outlining how the FSCS has adapted its service in response to the coronavirus (COVID-19) pandemic. The chief executive confirms that the FSCS continues to act and process claims within its usual timescales, and says FSCS measures are constantly being reviewed in light of the pandemic.

Source: What’s changed at FSCS since COVID-19?

Coronavirus (COVID-19)—FSCS operating normal service, and warning of scams

The FSCS announced that it is operating a normal service during the coronavirus (COVID-19) situation. Claims can be submitted in the usual way and the service is reporting no delays in processing claims. It has also issued a warning that scams are circulating involving use of the FSCS logo.

Source: FSCS open and fully operational.

Coronavirus (COVID-19)—ECB sets out macroprudential measures taken by national authorities

The European Central Bank (ECB) published a webpage setting out the macroprudential measures taken by euro area national authorities since the outbreak of the coronavirus (COVID-19) pandemic.

Sources: Macroprudential measures taken by national authorities since the outbreak of the coronavirus pandemic and  Overview of measures notified to the ECB under Article 5 of the SSM Regulation.

Coronavirus (COVID-19)—FSB report on financial stability implications and policy measures

The Financial Stability Board (FSB) published a report on the financial stability implications of the coronavirus (COVID-19) pandemic and the policy measures undertaken in response. The report was delivered to G20 Finance Ministers and Central Bank Governors in preparation for their virtual meeting on 15 April 2020.

Sources: COVID-19 pandemic: Financial stability implications and policy measures taken and  Financial stability implications and policy measures taken.

Coronavirus (COVID-19)—FSB chair’s letter considers the challenges faced by the global financial system following the pandemic

The chair of FSB, Randal K. Quarles, published a letter sent to G20 finance ministers and central bank governors in preparation for their virtual meeting on 15 April 2020. The letter highlights the ‘twin challenge’ the global financial system must respond to in light of the coronavirus (COVID-19) pandemic. This includes firstly, an increased need for credit throughout the global economy to bridge this period of restricted activity and secondly, uncertainty surrounding the value of a wide range of assets, which complicates the functioning of markets and the intermediation of the increased need for credit.

Source: FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: April 2020.

Coronavirus (COVID-19)—ECB statement on supervisory reporting measures

The ECB has issued a statement on supervisory reporting measures in the context of the coronavirus (COVID-19) pandemic setting out flexibility in reporting deadlines. The ECB aims to reduce the operational burden on banks in the coming weeks and months and enable them to report with an adequate level of data quality.

Source: Supervisory reporting measures in the context of the coronavirus (COVID-19) pandemic.

Coronavirus (COVID-19)—ECB sets out measures taken in response to pandemic in letter to MEP

The ECB published a letter from the chair of its supervisory board, Andrea Enria, to MEP Georgios Kyrtsos, in response to Kyrtsos’ letter of 13 March 2020. Enria sets out the measures undertaken by the ECB in light of the economic impact of the coronavirus (COVID-19), including measures taken on the treatment of non-performing loans (NPLs).

Source: Letter from Andrea Enria, Chair of the Supervisory Board, to Mr Kyrtsos, MEP, on COVID-19 related measures for the banking system.

Coronavirus (COVID-19)—ESMA decision on net short position holders to report positions of 0.1% and above published in Official Journal

European Securities and Markets Authority (ESMA) Decision (EU) 2020/525 of 16 March 2020 was published in the Official Journal. It temporarily requires the holders of net short positions in shares traded on an EU regulated market to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1% of the issued share capital.

Source: European Securities and Markets Authority Decision (EU) 2020/525 of 16 March 2020 to require natural or legal persons who have net short positions to temporarily lower the notification thresholds of net short positions in relation to the issued shares capital of companies whose shares are admitted to trading on a regulated market above a certain threshold to notify the competent authorties in accordance with point (a) of Article 28(1) of Regulation (EU) No 236/2012 of the European Parliament and of the Council.

Coronavirus (COVID-19)—ESMA postpones publication dates for non-equity transparency calculations and quarterly SI data

ESMA issued a statement postponing the application of the annual non-equity transparency calculations and the calculations for the systematic internaliser (SI) test for derivatives, exchange-traded commodities (ETCs), exchange-traded notes (ETNs), emission allowances and structured finance products (SFPs) under the Markets in Financial Instruments Directive II (Directive 2014/65/EU) (MiFID II).

Source: ESMA postpones publication dates for annual non-equity transparency calculations and quarterly SI data.

For further information on MiFID II, see:  MiFID I, MiFID II and MiFIR—essentials.

Coronavirus (COVID-19)—ESMA promotes coordinated NCA approach to supervising BMR compliance

ESMA issued a public statement to promote coordinated action between national competent authorities (NCAs) regarding the timeliness of fulfilling external audit requirements for interest rate benchmark administrators and contributors to interest rate benchmarks. Due to the impact of the coronavirus (COVID-19) pandemic, ESMA says it expects NCAs not to prioritise supervisory actions against administrators and supervised contributors in fulfilling these requirements where the audits are carried out by 30 September 2020.

Source: ESMA promotes coordinated action regarding benchmarks external audit requirements.

For further information on the Benchmarks Regulation, see: Benchmarks Regulation—essentials.

Coronavirus (COVID-19)—ESMA statement on fund manager reporting

ESMA issued a public statement concerning fund manager reporting. In light of the coronavirus (COVID-19) outbreak, and associated burdens on fund managers, ESMA expects NCAs to take a risk-based approach and not prioritise supervisory actions against fund managers in connection with upcoming reporting obligations. In particular, the statement relates to obligations for fund managers to publish annual and half yearly reports in respect of funds they manage, in relation to reporting periods from 31 December 2019 to 30 April 2020 inclusive..

Source: ESMA sets out supervisory expectations on publication of investment funds periodic reports.

Coronavirus (COVID-19)—MIFID II transparency review report

In light of the effect of the coronavirus (COVID-19) pandemic on stakeholders and market participants, ESMA extended the response deadline for the consultation on MiFID II/MIFIR review report on the transparency regime for non-equity instruments and the trading obligation for derivatives. It was extended from 17 May to 14 June 2020.

Source: ESMA extends MiFID II/MiFIR transparency review report consultation to 14 June 2020.

Coronavirus (COVID-19)–ESRB details impact on the EU’s economy and the responses of Member States

The General Board of the European Systemic Risk Board (ESRB) held its 37th regular meeting on 2 April 2020. The meeting focused on the consequences of the coronavirus (COVID-19) pandemic for the EU’s economy and financial system, and a summary of the key points discussed has been published on the ESRB’s website. The ESRB also published a spreadsheet which provides an overview of the policy measures taken by Member States, EU institutions and national authorities in response to the pandemic, and which will be updated regularly.

Sources: Policy measures in response to the COVID-19 pandemic and The General Board of the European Systemic Risk Board held its 37th regular meeting on 2 April 2020.

Coronavirus (COVID-19)—ISDA-IIF letter sets out recommendations in light of USD shortage for EMs

The International Swaps and Derivatives Association (ISDA) and the Institute of International Finance (IFF) wrote a letter to G20 Finance Ministers and central bank governors offering recommendations to ease the acute shortage of US dollars (USD) for emerging market countries (EMs). The letter applauds the efforts of the Federal Reserve Board (FRB) to provide temporary dollar liquidity to markets through the FX swap lines mechanism, in addition to the corresponding repo facility, and says the measures have had a positive impact during the coronavirus (COVID-19) pandemic by helping local banking systems access USD in order to continue to finance USD positions.

Sources: ISDA-IIF Letter to G-20 on Dollar Funding and ISDA IIF dollar liquidity letter to G20.

Coronavirus(COVID-19)—APPG on Fair Business Banking urges measures to protect firms that don’t qualify for CBILS

The All-Party Parliamentary Group (APPG) on Fair Business Banking issued a statement on financial support measures for businesses unable to access the Coronavirus Business Interruption Loan Scheme (CBILS) via the existing providers, and on ensuring that the processes and eligibility criteria are straightforward and speedy. The APPG sets out a series of proposed interventions and measures to ‘quickly and effectively distribute much-needed capital to struggling SMEs, charities and social enterprises’.

Source: Statement on the APPG recommendation to the governments in relation to the COVID-19 financial support measures.

Coronavirus (COVID-19)—EIB President gives statement on Eurogroup’s cooperation in response to pandemic

President of the European Investment Bank (EIB), Werner Hoyer, gave a statement on the Eurogroup’s agreement for a joint response to the coronavirus (COVID-19) pandemic. Hoyer says the decision ‘shows true European solidarity as Europe stands united and ready to act’. He insists that the approved measures will make a ‘real difference’ and that the EIB Group appreciates that European Ministers of Finance have endorsed the establishment of the European Guarantee Fund of €25bn, which will support up to €200bn of finance for companies, with a focus on small and medium-sized enterprises (SMEs).

Source: Statement by President Hoyer on Eurogroup's agreement for a joint response to COVID-19.

Coronavirus (COVID-19)—European Association of Corporate Treasurers launches resource centre

The European Association of Corporate Treasurers (EACT) launched a coronavirus (COVID–19) resource centre which summarises, and contains links to, coronavirus information portals of national associations of corporate treasurers (in the UK, Germany, France and Italy), European institutions (European Commission, Council of the EU, European Parliament, the ECB, ESMA and the European Banking Authority (EBA)) and international institutions (the Basel Committee for Banking Supervision (BCBS), OECD and the Financial Action Task Force (FATF)). Information included in the resource centre includes recent EU and national measures to support the economy, including through temporary state aid, credit facilities and guarantee funds. It also details the ECB asset purchase programme as well as ESMA’s delayed reporting and other deadlines, and reduced transparency threshold for net short positions in shares.

Source: Covid–19 Resource Centre.

Coronavirus (COVID-19)—FIA highlights adjusted plans for airline ticket derivatives venture

The Futures Industry Association (FIA) announced that Skytra, an Airbus subsidiary that is developing a derivatives trading venue to help airlines directly hedge passenger ticket prices, is adjusting its plans due to the impact of the coronavirus (COVID-19) pandemic on the air travel industry. Skytra has announced a data partnership with the International Air Transport Association (IATA) and a weekly COVID-19 update on pricing trends.

Source: Airline ticket derivatives venture starts weekly COVID-19 update.

Coronavirus (COVID-19)—UK Finance issues guidance on making payments safely in lockdown

UK Finance ha published guidance for customers who are self-isolating due to the coronavirus (COVID-19) pandemic and seeking to pay for essential goods. The guidance outlines the ways in which customers can pay safely, with specific guidance for those self-isolating or helping people at increased risk from the coronavirus, and includes industry standard processes as well as new developments to help customers to access cash.

Source: Advice for self-isolating customers seeking access to cash and wanting to pay for essential items.

Coronavirus (COVID-19)—UK Finance says over 1.2m mortgage payment holidays offered by lenders

UK Finance published figures which reveal that over 1.2m mortgage payment holidays have been offered by lenders to customers impacted by the coronavirus (COVID-19) pandemic. The figures relate to the total first charge mortgage market, including residential and buy-to-let mortgages, and indicate that the mortgage payment holidays in place account for 11.2 per cent of total mortgages.

Source: 1.2 million mortgage customers given payment holidays by lenders.

Coronavirus (COVID-19)—Over £1.1 billion lent to SMEs through CBILS

UK Finance figures indicate that the banking and finance sector has lent over £1.1bn to small and medium-sized enterprises (SMEs) so far through the Coronavirus (COVID-19) Business Interruption Loan Scheme (CBILS). Total lending under the scheme has increased by £700m in the last week, an increase of 150%.

Source: Banking and finance sector provides over £1.1 billion to SMEs through Covid-19 lending scheme.

Coronavirus (COVID-19)—Pay.UK delays publication of request to pay framework

As a result of the coronavirus (COVID-19) pandemic, Pay.UK announced a temporary delay in the publication of its request to pay framework, the message standards, rules and terms and conditions for request to pay, originally planned for 30 April 2020.

Sources: Statement regarding request to pay framework and Request to pay.

Financial Ombudsman News issue 151 published

The FOS published issue 151 of Ombudsman News, which includes articles on the coronavirus (COVID-19), avoiding fraud and scams, FOS complaints data from July 2019–December 2019, FOS plans and budget for 2020–2021 and the FOS’s new award limit.

Source: Ombudsman News issue 151.

ISLA’s Council for Sustainable Finance paper considers the positive mechanisms of securities lending and short selling

The International Securities Lending Association (ISLA)’s Council for Sustainable Finance (ICSF) published its first position paper, Making Sense of Sustainable Securities Lending & Short Selling During the COVID-19 Crisis. ICSF argues that a collective commitment to the sustainability agenda can stimulate the market and increase investor confidence.

Source: ICSF publishes first position paper.

Coronavirus (COVID-19)—Associations call for one-year delay to SRD II implementation deadline

ISLA, working in collaboration with a group of trade associations, submitted a joint letter to the European Commission on 9 April 2020 regarding the implementation of the Shareholders Rights Directive II (Directive (EU) 2017/828) (SRD II). In the joint letter, the associations say the coronavirus (COVID-19) pandemic will ‘further strain’ the industry’s capacity to implement SRD II and its Implementing Regulation 2018/1212 (IR) by the September 2020 deadline, and call for a 12-month delay.

Source: Joint Associations’ Letter to EC on the Impact of COVID-19 to SRD II Implementation.

Pension schemes should put companies on watch over coronavirus (COVID-19) response

The Pensions and Lifetime Savings Association (PLSA) is reminding pension schemes to be watchful of how the companies in which they invest respond to the coronavirus (COVID-19) pandemic and be prepared to hold directors to account as decisions now may impact their long-term investment prospects.

Source: Pension schemes urged to put companies on watch over Covid-19 response.

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MiFID II

Coronavirus (COVID-19)—ESMA postpones publication dates for non-equity transparency calculations and quarterly SI data

ESMA issued a statement postponing the application of the annual non-equity transparency calculations and the calculations for the systematic internaliser (SI) test for derivatives, exchange-traded commodities (ETCs), exchange-traded notes (ETNs), emission allowances and structured finance products (SFPs) under MiFID II.

Source: ESMA postpones publication dates for annual non-equity transparency calculations and quarterly SI data.

For further information on MiFID II, see:  MiFID I, MiFID II and MiFIR—essentials.

Coronavirus (COVID-19)—MIFID II transparency review report

In light of the effect of the coronavirus (COVID-19) pandemic on stakeholders and market participants, ESMA extended the response deadline for the consultation on MiFID II/MIFIR review report on the transparency regime for non-equity

Source: ESMA extends MiFID II/MiFIR transparency review report consultation to 14 June 2020.

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UK, EU and international regulators and bodies

PRA consults on 2020/21 budget and sets out its Business Plan

The PRA published consultation paper CP4/20, Regulated fees and levies: Rates proposals 2020/21, alongside its Business Plan for the same period, which sets out its strategy, workplan, and budget. The plan also details some of the PRA’s highest-level actions to mitigate the impact of the coronavirus (COVID-19) pandemic on the firms it regulates, and on the UK economy, including cancelling the 2020 annual cyclical scenario stress tests and delaying the publication of the 2019 biennial exploratory scenario (BES) results. Feedback on the budget consultation is sought by 15 May 2020.

Sources: Regulated fees and levies: Rates proposals 2020/21 and  Prudential Regulation Authority Business Plan 2020/21.

Financial Ombudsman News issue 151 published

The FOS published issue 151 of Ombudsman News, which includes articles on the coronavirus (COVID-19), avoiding fraud and scams, FOS complaints data from July 2019–December 2019, FOS plans and budget for 2020–2021 and the FOS’s new award limit.

Source: Ombudsman News issue 151.

Coronavirus (COVID-19)–ESRB details impact on the EU’s economy and the responses of Member States

The ESRB held its 37th regular meeting on 2 April 2020. The meeting focused on the consequences of the coronavirus (COVID-19) pandemic for the EU’s economy and financial system, and a summary of the key points discussed has been published on the ESRB’s website. The ESRB also published a spreadsheet which provides an overview of the policy measures taken by Member States, EU institutions and national authorities in response to the pandemic, and which will be updated regularly.

Sources: Policy measures in response to the COVID-19 pandemic and The General Board of the European Systemic Risk Board held its 37th regular meeting on 2 April 2020.

TheCityUK report shows latest figures for financial sector employment and tax contribution

TheCityUK has published its latest annual ‘UK Key Facts’ report, which shows that the industry remains a major national employer, with one in 14 UK-based workers (over 2.3 million people) employed in financial and related professional services—two thirds of whom are outside London. The financial services sector also remains a major source of tax receipts, accounting for £10.50 in every £100 of tax paid to the exchequer, a total of £75.5bn in 2018/19, equivalent to 42% of the total health budget.

Source: Financial and related professional services a pillar of UK economy

Coronavirus (COVID-19)—FCA to launch daily email round-up

The FCA said it will launch a daily email round-up of FCA coronavirus (COVID-19) news and publications on its website.

Source: Sign up to receive FCA coronavirus updates.

Coronavirus (COVID-19)—European Association of Corporate Treasurers launches resource centre

The European Association of Corporate Treasurers (EACT) launched a coronavirus (COVID–19) resource centre which summarises, and contains links to, coronavirus information portals of national associations of corporate treasurers (in the UK, Germany, France and Italy), European institutions (European Commission, Council of the EU, European Parliament, the ECB, ESMA and the European Banking Authority (EBA)) and international institutions (the Basel Committee for Banking Supervision (BCBS), OECD and the Financial Action Task Force (FATF)). Information included in the resource centre includes recent EU and national measures to support the economy, including through temporary state aid, credit facilities and guarantee funds. It also details the ECB asset purchase programme as well as ESMA’s delayed reporting and other deadlines, and reduced transparency threshold for net short positions in shares.

Source: Covid–19 Resource Centre.

PRA consults on 2020/21 budget and sets out its Business Plan

The PRA published consultation paper CP4/20, Regulated fees and levies: Rates proposals 2020/21, alongside its Business Plan for the same period, which sets out its strategy, workplan, and budget. The plan also details some of the PRA’s highest-level actions to mitigate the impact of the coronavirus (COVID-19) pandemic on the firms it regulates, and on the UK economy, including cancelling the 2020 annual cyclical scenario stress tests and delaying the publication of the 2019 biennial exploratory scenario (BES) results. Feedback on the budget consultation is sought by 15 May 2020.

Sources: Regulated fees and levies: Rates proposals 2020/21 and  Prudential Regulation Authority Business Plan 2020/21.

Financial Ombudsman News issue 151 published

The FOS published issue 151 of Ombudsman News, which includes articles on the coronavirus (COVID-19), avoiding fraud and scams, FOS complaints data from July 2019–December 2019, FOS plans and budget for 2020–2021 and the FOS’s new award limit.

Source: Ombudsman News issue 151.

Coronavirus (COVID-19)–ESRB details impact on the EU’s economy and the responses of Member States

The ESRB held its 37th regular meeting on 2 April 2020. The meeting focused on the consequences of the coronavirus (COVID-19) pandemic for the EU’s economy and financial system, and a summary of the key points discussed has been published on the ESRB’s website. The ESRB also published a spreadsheet which provides an overview of the policy measures taken by Member States, EU institutions and national authorities in response to the pandemic, and which will be updated regularly.

Sources: Policy measures in response to the COVID-19 pandemic and The General Board of the European Systemic Risk Board held its 37th regular meeting on 2 April 2020.

TheCityUK report shows latest figures for financial sector employment and tax contribution

TheCityUK has published its latest annual ‘UK Key Facts’ report, which shows that the industry remains a major national employer, with one in 14 UK-based workers (over 2.3 million people) employed in financial and related professional services—two thirds of whom are outside London. The financial services sector also remains a major source of tax receipts, accounting for £10.50 in every £100 of tax paid to the exchequer, a total of £75.5bn in 2018/19, equivalent to 42% of the total health budget.

Source: Financial and related professional services a pillar of UK economy.

Coronavirus (COVID-19)—FCA to launch daily email round-up

The FCA said it will launch a daily email round-up of FCA coronavirus (COVID-19) news and publications on its website.

Source: Sign up to receive FCA coronavirus updates.

Coronavirus (COVID-19)—European Association of Corporate Treasurers launches resource centre

The European Association of Corporate Treasurers (EACT) launched a coronavirus (COVID–19) resource centre which summarises, and contains links to, coronavirus information portals of national associations of corporate treasurers (in the UK, Germany, France and Italy), European institutions (European Commission, Council of the EU, European Parliament, the ECB, ESMA and the European Banking Authority (EBA)) and international institutions (the Basel Committee for Banking Supervision (BCBS), OECD and the Financial Action Task Force (FATF)). Information included in the resource centre includes recent EU and national measures to support the economy, including through temporary state aid, credit facilities and guarantee funds. It also details the ECB asset purchase programme as well as ESMA’s delayed reporting and other deadlines, and reduced transparency threshold for net short positions in shares.

Source: Covid–19 Resource Centre.

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Authorisation, approval and supervision

Coronavirus (COVID-19)—FCA Dear CEO Letter: Lending to SMEs

Christopher Woolard, Interim Chief Executive of the FCA, wrote to banks lending to small businesses during the coronavirus (COVID-19) pandemic, in an effort to avoid a repeat of the historic issues in banks’ treatment of SMEs. Woolard sets out the responsibilities of Senior Managers in lending to SMEs under the Senior Managers and Certification Regime (SM&CR), in addition to the role of boards in overseeing Senior Managers discharging their responsibilities suitably and collecting information on their firm’s treatment of SMEs. Woolard has also announced that the FCA has established a small business unit to coordinate FCA activities across small business issues.

Source: FCA Dear CEO letter: lending to small businesses.

For further information on the SM&CR, see: Senior Senior Managers and Certification Regime—essentials for SM&CR banking firms.

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Prudential requirements

Coronavirus (COVID-19)–PRA maintains systemic risk buffers and issues CRR II modification by consent

The PRA decided to maintain firms’ systemic risk buffer (SRB) rates at the rates set in December 2019, in response to the economic shock caused by the coronavirus (COVID-19) pandemic. The rates will be reassessed in December 2021. The PRA has also published a modification by consent of the calculation on the total exposure measure of the leverage ratio, to address the impact of COVID-19.

Sources: PRA decision on Systemic Risk Buffer rates and Modification by consent of the calculation of the total exposure measure of the Leverage Ratio.

For further information on systemic risk buffers and leverage ratio, see: CRD IV—essentials.

Coronavirus (COVID-19)—ECB sets out macroprudential measures taken by national authorities

The European Central Bank (ECB) published a webpage setting out the macroprudential measures taken by euro area national authorities since the outbreak of the coronavirus (COVID-19) pandemic.

Sources: Macroprudential measures taken by national authorities since the outbreak of the coronavirus pandemic and  Overview of measures notified to the ECB under Article 5 of the SSM Regulation.

ECB’s Enria sets out ECB measures to address valuation risks posed by Level 2 and Level 3 assets

The ECB published a letter from the chair of its supervisory board, Andrea Enria, to MEP Marco Zanni, in response to Zanni’s letter of 9 March 2020. The letter sets out the action the ECB has taken to address valuation risks posed by Level 2 and Level 3 assets.

Source: Letter from Andrea Enria, Chair of the Supervisory Board, to Mr Zanni, MEP, on Level 2 and Level 3 assets.

Coronavirus (COVID-19)—ECB statement on supervisory reporting measures

The ECB issued a statement on supervisory reporting measures in the context of the coronavirus (COVID-19) pandemic setting out flexibility in reporting deadlines. The ECB aims to reduce the operational burden on banks in the coming weeks and months and enable them to report with an adequate level of data quality.

Source: Supervisory reporting measures in the context of the coronavirus (COVID-19) pandemic.

Coronavirus (COVID-19)—ECB sets out measures taken in response to pandemic in letter to MEP

The ECB published a letter from the chair of its supervisory board, Andrea Enria, to MEP Georgios Kyrtsos, in response to Kyrtsos’ letter of 13 March 2020. Enria sets out the measures undertaken by the ECB in light of the economic impact of the coronavirus (COVID-19), including measures taken on the treatment of non-performing loans (NPLs).

Source: Letter from Andrea Enria, Chair of the Supervisory Board, to Mr Kyrtsos, MEP, on COVID-19 related measures for the banking system.

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Financial stability 

Coronavirus (COVID-19)—FPC to prepare additional financial stability report

The FPC issued a statement following its meeting on 9 April 2020 in which it reviewed developments in the financial system related to the outbreak and spread of the coronavirus (COVID-19). The FPC usually assesses risks to UK financial stability and the resilience of the UK financial system and publishes that assessment in biannual Financial Stability Reports. Given the material developments in recent weeks due to COVID-19, however, the FPC plans to publish an additional interim Financial Stability Report on 7 May 2020.

Source: Financial Policy Committee statement.

Coronavirus (COVID-19)—FSB report on financial stability implications and policy measures

The FSB published a report on the financial stability implications of the coronavirus (COVID-19) pandemic and the policy measures undertaken in response. The report was delivered to G20 Finance Ministers and Central Bank Governors in preparation for their virtual meeting on 15 April 2020.

Sources: COVID-19 pandemic: Financial stability implications and policy measures taken and  Financial stability implications and policy measures taken.

Coronavirus (COVID-19)—FSB chair’s letter considers the challenges faced by the global financial system following the pandemic

The chair of FSB, Randal K. Quarles, published a letter sent to G20 finance ministers and central bank governors in preparation for their virtual meeting on 15 April 2020. The letter highlights the ‘twin challenge’ the global financial system must respond to in light of the coronavirus (COVID-19) pandemic. This includes firstly, an increased need for credit throughout the global economy to bridge this period of restricted activity and secondly, uncertainty surrounding the value of a wide range of assets, which complicates the functioning of markets and the intermediation of the increased need for credit.

Source: FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: April 2020.

Coronavirus (COVID-19)–ESRB details impact on the EU’s economy and the responses of Member States

The General Board of the European Systemic Risk Board (ESRB) held its 37th regular meeting on 2 April 2020. The meeting focused on the consequences of the coronavirus (COVID-19) pandemic for the EU’s economy and financial system, and a summary of the key points discussed has been published on the ESRB’s website. The ESRB also published a spreadsheet which provides an overview of the policy measures taken by Member States, EU institutions and national authorities in response to the pandemic, and which will be updated regularly.

Sources: Policy measures in response to the COVID-19 pandemic and  The General Board of the European Systemic Risk Board held its 37th regular meeting on 2 April 2020.

Coronavirus (COVID-19)—EIB President gives statement on Eurogroup’s cooperation in response to pandemic

President of the European Investment Bank (EIB), Werner Hoyer, gave a statement on the Eurogroup’s agreement for a joint response to the coronavirus (COVID-19) pandemic. Hoyer says the decision ‘shows true European solidarity as Europe stands united and ready to act’. He insists that the approved measures will make a ‘real difference’ and that the EIB Group appreciates that European Ministers of Finance have endorsed the establishment of the European Guarantee Fund of €25bn, which will support up to €200bn of finance for companies, with a focus on small and medium-sized enterprises (SMEs).

Source: Statement by President Hoyer on Eurogroup's agreement for a joint response to COVID-19.

Coronavirus (COVID-19)—European Association of Corporate Treasurers launches resource centre

The European Association of Corporate Treasurers (EACT) launched a coronavirus (COVID–19) resource centre which summarises, and contains links to, coronavirus information portals of national associations of corporate treasurers (in the UK, Germany, France and Italy), European institutions (European Commission, Council of the EU, European Parliament, the ECB, ESMA and the European Banking Authority (EBA)) and international institutions (the Basel Committee for Banking Supervision (BCBS), OECD and the Financial Action Task Force (FATF)). Information included in the resource centre includes recent EU and national measures to support the economy, including through temporary state aid, credit facilities and guarantee funds. It also details the ECB asset purchase programme as well as ESMA’s delayed reporting and other deadlines, and reduced transparency threshold for net short positions in shares.

Source: Covid–19 Resource Centre.

ESRB publishes first risk dashboard of 2020

The ESRB published its first risk dashboard of 2020, which was produced on 19 March 2020. The dashboard, which is published on a quarterly basis, is a set of quantitative and qualitative indicators of systemic risk in the EU financial system.

Source: First ESRB risk dashboard of 2020.

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Financial crime

Serious Fraud Office announces end of DPA with Tesco Stores Ltd

The Serious Fraud Office (SFO) confirmed that Tesco Stores Ltd has fulfilled the terms of it Deferred Prosecution Agreement (DPA) with the regulator and has brought the case to an end. The DPA consisted of the payment of a £129m fine and £3m investigation costs from Tesco, and the implementation of a compliance programme. The SFO has announced that it is satisfied that Tesco has complied fully with the terms of the DPA, which ran from 10 April 2017 until 10 April 2020.

Source: SFO confirms end of Deferred Prosecution Agreement with Tesco Stores Ltd.

For further information on DPAs, see: An introduction to Deferred Prosecution Agreements for Financial Services.

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Complaints, compensation and claims management

Financial Ombudsman News issue 151 published

The FOS published issue 151 of Ombudsman News, which includes articles on the coronavirus (COVID-19), avoiding fraud and scams, FOS complaints data from July 2019–December 2019, FOS plans and budget for 2020–2021 and the FOS’s new award limit.

Source: Ombudsman News issue 151.

Coronavirus (COVID-19)—FSCS measures taken in response to the pandemic

The FSCS published a statement from its chief executive, Caroline Rainbird, outlining how the FSCS has adapted its service in response to the coronavirus (COVID-19) pandemic. The chief executive confirms that the FSCS continues to act and process claims within its usual timescales, and says FSCS measures are constantly being reviewed in light of the pandemic.

Source: What’s changed at FSCS since COVID-19?

Coronavirus (COVID-19)—FSCS operating normal service, and warning of scams

The FSCS announced that it is operating a normal service during the coronavirus (COVID-19) situation. Claims can be submitted in the usual way and the service is reporting no delays in processing claims. It has also issued a warning that scams are circulating involving use of the FSCS logo.

Source: FSCS open and fully operational.

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Investigations, enforcement and discipline

Serious Fraud Office announces end of DPA with Tesco Stores Ltd

The SFO confirmed that Tesco Stores Ltd has fulfilled the terms of it Deferred Prosecution Agreement (DPA) with the regulator and has brought the case to an end. The DPA consisted of the payment of a £129m fine and £3m investigation costs from Tesco, and the implementation of a compliance programme. The SFO has announced that it is satisfied that Tesco has complied fully with the terms of the DPA, which ran from 10 April 2017 until 10 April 2020.

Source: SFO confirms end of Deferred Prosecution Agreement with Tesco Stores Ltd.

For further information on DPAs, see: An introduction to Deferred Prosecution Agreements for Financial Services.

ASA rulings—15 April 2020

A television ad by Funding Circle Ltd prompted complaints to the Advertising Standards Authority (ASA) for being misleading.

Source: ASA Rulings—15 April 2020.

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Competition in financial services

CMA publishes sixth annual concurrency report 2020

The Competition and Markets Authority (CMA) published its 2020 annual report on the operation of the concurrency arrangements in the regulated sectors, including the financial services and payments sectors.

Source: Annual report on concurrency 2020.

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Regulation of benchmarks and IBOR reform

Feedback requested on delegated regulations on ESG and climate benchmarks

The European Commission is seeking feedback on a draft delegated regulation on how benchmark administrators can build in environmental, social & governance (ESG) criteria in financial benchmarking and minimum standards for climate benchmarks. Separately, feedback is sought on a draft delegated regulation on minimum standards to help benchmark administrators design the new climate benchmarks: the ‘EU climate transition’ and ‘EU Paris-aligned’ benchmarks. Feedback is requested by 6 May 2020.

Sources: Financial benchmarking—building in environmental, social & governance criteriaSustainable finance—environmental, social and governance criteria (benchmarks) and  Sustainable finance—minimum standards for climate benchmarks.

IASB consults on interest rate benchmark reform changes

The International Accounting Standards Board (IASB) launched a consultation on further proposed ‘phase II’ amendments to the International Financial Reporting Standards (IFRS) as a result of the interest rate benchmark reform. Further to the IASB’s work since 2018 on the effect of interest rate benchmark reform on financial statements, the consultation relates in particular to changes to reporting on contractual cash flows and hedging relationships. Feedback is requested by 25 May 2020.

Source: IASB proposes further amendments to IFRS Standards in response to interest rate benchmark reform.

Joint Associations Letter calls for delay in supervisory action relating to Low Carbon Benchmarks Regulation

ISDA, the Association for Financial Markets in Europe (AFME), the European Federation of Energy Traders (EFET), the Association of European Energy Exchanges (Europex) and the Futures Industry Association (FIA) have published a joint letter to the European Commission’s Executive Vice-President, Valdis Dombrovskis, and the European Securities and Markets Authority’s (ESMA) Chairman, Steven Maijoor. The letter expresses the concerns of the organisations regarding the requirement for benchmark administrators to comply with additional obligations in Regulation (EU) 2019/2089 (Low Carbon Benchmarks Regulation) by 30 April 2020.

Sources: Joint Associations Letter to ESMA on Climate Benchmarks and  Joint Association Letter - Low Carbon Benchmarks Regulation.

Coronavirus (COVID-19)—ESMA promotes coordinated NCA approach to supervising BMR compliance

ESMA issued a public statement to promote coordinated action between NCAs regarding the timeliness of fulfilling external audit requirements for interest rate benchmark administrators and contributors to interest rate benchmarks. Due to the impact of the coronavirus (COVID-19) pandemic, ESMA says it expects NCAs not to prioritise supervisory actions against administrators and supervised contributors in fulfilling these requirements where the audits are carried out by 30 September 2020.

Source: ESMA promotes coordinated action regarding benchmarks external audit requirements.

For further information on the Benchmarks Regulation, see: Benchmarks Regulation—essentials.

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Regulation of capital markets

ISLA’s Council for Sustainable Finance paper considers the positive mechanisms of securities lending and short selling

ISL)’s Council for Sustainable Finance (ICSF) published its first position paper, Making Sense of Sustainable Securities Lending & Short Selling During the COVID-19 Crisis. ICSF argues that a collective commitment to the sustainability agenda can stimulate the market and increase investor confidence.

Source: ICSF publishes first position paper.

Coronavirus (COVID-19)—ESMA decision on net short position holders to report positions of 0.1% and above published in Official Journal

ESMA Decision (EU) 2020/525 of 16 March 2020 was published in the Official Journal of the EU. It temporarily requires the holders of net short positions in shares traded on an EU regulated market to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1% of the issued share capital.

Source: European Securities and Markets Authority Decision (EU) 2020/525 of 16 March 2020 to require natural or legal persons who have net short positions to temporarily lower the notification thresholds of net short positions in relation to the issued shares capital of companies whose shares are admitted to trading on a regulated market above a certain threshold to notify the competent authorties in accordance with point (a) of Article 28(1) of Regulation (EU) No 236/2012 of the European Parliament and of the Council.

Coronavirus (COVID-19)—Associations call for one-year delay to SRD II implementation deadline

ISLA, working in collaboration with a group of trade associations, submitted a joint letter to the European Commission on 9 April 2020 regarding the implementation of the SRD II. In the joint letter, the associations say the coronavirus (COVID-19) pandemic will ‘further strain’ the industry’s capacity to implement SRD II and its Implementing Regulation 2018/1212 (IR) by the September 2020 deadline, and call for a 12-month delay.

Source: Joint Associations’ Letter to EC on the Impact of COVID-19 to SRD II Implementation.

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Regulation of derivatives

Coronavirus (COVID-19)—FIA highlights adjusted plans for airline ticket derivatives venture

The FIA announced that Skytra, an Airbus subsidiary that is developing a derivatives trading venue to help airlines directly hedge passenger ticket prices, is adjusting its plans due to the impact of the coronavirus (COVID-19) pandemic on the air travel industry. Skytra has announced a data partnership with the International Air Transport Association (IATA) and a weekly COVID-19 update on pricing trends.

Source: Airline ticket derivatives venture starts weekly COVID-19 update.

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Investment funds and asset management

Coronavirus (COVID-19)—FCA updates regulatory guidance for funds

The FCA updated its webpage setting out its expectations regarding funds in light of the coronavirus (COVID-19) pandemic. It aims to provide guidance on the challenges firms are facing both operationally and as a result of significantly increased volatility in global markets.

Source: Update - FCA expectations regarding funds in light of coronavirus (Covid-19).

Coronavirus (COVID-19)—ESMA statement on fund manager reporting

ESMA issued a public statement concerning fund manager reporting. In light of the coronavirus (COVID-19) outbreak, and associated burdens on fund managers, ESMA expects NCAs to take a risk-based approach and not prioritise supervisory actions against fund managers in connection with upcoming reporting obligations. In particular, the statement relates to obligations for fund managers to publish annual and half yearly reports in respect of funds they manage, in relation to reporting periods from 31 December 2019 to 30 April 2020 inclusive.

Source: ESMA sets out supervisory expectations on publication of investment funds periodic reports.

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Banks and mutuals

Coronavirus (COVID-19)–PRA maintains systemic risk buffers and issues CRR II modification by consent

The PRA decided to maintain firms’ systemic risk buffer (SRB) rates at the rates set in December 2019, in response to the economic shock caused by the coronavirus (COVID-19) pandemic. The rates will be reassessed in December 2021. The PRA also published a modification by consent of the calculation on the total exposure measure of the leverage ratio, to address the impact of COVID-19.

Sources: PRA decision on Systemic Risk Buffer rates and  Modification by consent of the calculation of the total exposure measure of the Leverage Ratio.

For further information on systemic risk buffers and leverage ration, see: CRD IV—essentials.

Coronavirus (COVID-19)—FCA Dear CEO Letter: Lending to SMEs

Christopher Woolard, Interim Chief Executive of the FCA, wrote to banks lending to small businesses during the coronavirus (COVID-19) pandemic, in an effort to avoid a repeat of the historic issues in banks’ treatment of SMEs. Woolard sets out the responsibilities of Senior Managers in lending to SMEs under the SM&CR, in addition to the role of boards in overseeing Senior Managers discharging their responsibilities suitably and collecting information on their firm’s treatment of SMEs. Woolard has also announced that the FCA has established a small business unit to coordinate FCA activities across small business issues.

Source: FCA Dear CEO letter: lending to small businesses.

For further information on the SM&CR, see:  Senior Managers and Certification Regime—essentials for SM&CR banking firms.

EBA publishes reporting framework 2.10

The EBA published the reporting framework 2.10, which includes validation rules, the data point model (DPM) dictionary, and XBRL taxonomies.

Source: EBA publishes phase 1 of its technical package on reporting framework 2.10.

ECB publishes amendments to regulation on supervisory reporting

The ECB published amendments to Regulation (EU) 2015/534 on the reporting of supervisory financial information (ECB/2020/22). The amendments reflect recent changes to the templates and instructions for supervisory reporting under Commission Implementing  Regulation (EU) 680/2014.

Source: REGULATION (EU) 2020/[XX*] OF THE EUROPEAN CENTRAL BANK of 9 April 2020 amending Regulation (EU) 2015/534 on reporting of supervisory financial information (ECB/2020/22).

Coronavirus (COVID-19)—ECB statement on supervisory reporting measures

The ECB issued a statement on supervisory reporting measures in the context of the coronavirus (COVID-19) pandemic setting out flexibility in reporting deadlines. The ECB aims to reduce the operational burden on banks in the coming weeks and months and enable them to report with an adequate level of data quality.

Source: Supervisory reporting measures in the context of the coronavirus (COVID-19) pandemic.

Coronavirus (COVID-19)—ECB sets out measures taken in response to pandemic in letter to MEP

The ECB published a letter from the chair of its supervisory board, Andrea Enria, to MEP Georgios Kyrtsos, in response to Kyrtsos’ letter of 13 March 2020. Enria sets out the measures undertaken by the ECB in light of the economic impact of the coronavirus (COVID-19), including measures taken on the treatment of non-performing loans (NPLs).

Source: Letter from Andrea Enria, Chair of the Supervisory Board, to Mr Kyrtsos, MEP, on COVID-19 related measures for the banking system.

ECB’s Enria sets out ECB measures to address valuation risks posed by Level 2 and Level 3 assets

The ECB published a letter from the chair of its supervisory board, Andrea Enria, to MEP Marco Zanni, in response to Zanni’s letter of 9 March 2020. The letter sets out the action the ECB has taken to address valuation risks posed by Level 2 and Level 3 assets.

Source: Letter from Andrea Enria, Chair of the Supervisory Board, to Mr Zanni, MEP, on Level 2 and Level 3 assets.

Coronavirus (COVID-19)—ISDA-IIF letter sets out recommendations in light of USD shortage for EMs

The International Swaps and Derivatives Association (ISDA) and the Institute of International Finance (IFF) wrote a letter to G20 Finance Ministers and central bank governors offering recommendations to ease the acute shortage of US dollars (USD) for emerging market countries (EMs). The letter applauds the efforts of the Federal Reserve Board (FRB) to provide temporary dollar liquidity to markets through the FX swap lines mechanism, in addition to the corresponding repo facility, and says the measures have had a positive impact during the coronavirus (COVID-19) pandemic by helping local banking systems access USD in order to continue to finance USD positions.

Sources: ISDA-IIF Letter to G-20 on Dollar Funding and  ISDA IIF dollar liquidity letter to G20.

Coronavirus (COVID-19)—APPG on Fair Business Banking urges measures to protect firms that don’t qualify for CBILS

The All-Party Parliamentary Group (APPG) on Fair Business Banking issued a statement on financial support measures for businesses unable to access the Coronavirus Business Interruption Loan Scheme (CBILS) via the existing providers, and on ensuring that the processes and eligibility criteria are straightforward and speedy. The APPG sets out a series of proposed interventions and measures to ‘quickly and effectively distribute much-needed capital to struggling SMEs, charities and social enterprises’.

Source: Statement on the APPG recommendation to the governments in relation to the COVID-19 financial support measures.

Coronavirus (COVID-19)—Over £1.1 billion lent to SMEs through CBILS

UK Finance figures indicate that the banking and finance sector has lent over £1.1bn to small and medium-sized enterprises (SMEs) so far through the Coronavirus (COVID-19) Business Interruption Loan Scheme (CBILS). Total lending under the scheme has increased by £700m in the last week, an increase of 150%.

Source: Banking and finance sector provides over £1.1 billion to SMEs through Covid-19 lending scheme.

EBA publishes Risk Dashboard for Q4 2019

The EBA published its quarterly Risk Dashboard covering Q4 2019 data, which summarises the main risks and vulnerabilities in the EU banking sector. The dashboard does not reflect the impact from the coronavirus (COVID-19) pandemic but shows that, prior to the pandemic, EU banks’ capital ratios and asset quality had improved but return on equity (RoE) had worsened further.

Source: EU banks sail through the Corona crisis with sound capital ratios 

 

Consumer credit, mortgage and home finance

Coronavirus (COVID-19)—FCA confirms package to help users of consumer credit products

Following a short consultation, the FCA confirmed the package of targeted temporary measures to help people with some of the most commonly used consumer credit products who are affected by the coronavirus (COVID-19) pandemic. The rule changes were in force from 9 April 2020 and the full range of measures applied by 14 April 2020. This is to allow firms time to ensure they have the appropriate level of resources available to handle customer requests. All firms will be ready to receive customer requests by 14 April, although some firms, including the major banks and building societies, will be adopting the changes immediately.

Source: FCA confirms temporary financial relief for customers impacted by coronavirus.

Coronavirus (COVID-19)—UK Finance says over 1.2m mortgage payment holidays offered by lenders

UK Finance published figures which reveal that over 1.2m mortgage payment holidays have been offered by lenders to customers impacted by the coronavirus (COVID-19) pandemic. The figures relate to the total first charge mortgage market, including residential and buy-to-let mortgages, and indicate that the mortgage payment holidays in place account for 11.2 per cent of total mortgages.

Source: 1.2 million mortgage customers given payment holidays by lenders.

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Regulation of insurance

Coronavirus (COVID-19)—FCA Dear CEO Letter: BI Insurance for SMEs

Christopher Woolard, Interim Chief Executive of the FCA, wrote to insurance firms on conduct in relation to business interruption (BI) insurance. Woolard states for those BI policies that do not cover pandemics, insurers are not under an obligation to pay out in relation to the coronavirus (COVID-19) pandemic. The FCA does not consider there to be reasonable grounds to intervene in such circumstances. Woolard emphasises that where a firm does have an obligation to pay out on a policy, it must assess claims and settle them quickly. Woolard also considered the role of the FOS and BI insurance.

Source: FCA Dear CEO letter on insuring SMEs: business interruption.

For further information on the SM&CR, see: Application of the SM&CR to insurers.

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Regulation of personal pension and stakeholder products

Pension schemes should put companies on watch over coronavirus (COVID-19) response

The PLSA is reminding pension schemes to be watchful of how the companies in which they invest respond to the coronavirus (COVID-19) pandemic and be prepared to hold directors to account as decisions now may impact their long-term investment prospects.

Source: Pension schemes urged to put companies on watch over Covid-19 response.

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Payment services and systems

EPC publishes version 1.5 of single euro payments area credit transfer rulebooks

The European Payments Council (EPC) published version 1.5 of the clarification paper on single euro payments area (SEPA) credit transfer (SCT) and instant credit transfer (SCT Inst) rulebooks.

Source: New version of the Clarification Paper on SCT and SCT Inst.

Fintech can promote financial inclusion according to CPMI and World Bank report

The Committee on Payments and Market Infrastructures (CPMI) and the World Bank have published a new report entitled ‘Payment aspects of financial inclusion in the fintech era’. The report explains that fintech ‘can spur financial inclusion by facilitating payments’, although the opportunities come with challenges. The report provides a framework for incorporating and leveraging technological opportunities to promote access and use of transaction accounts, while also addressing potential challenges.

Sources: How fintech can promote financial inclusion - a new report on the opportunities and challenges and  Payment aspects of financial inclusion in the fintech era.

Financial Stability Board publishes stage 1 report on enhancing cross-border payments

The FSB published the stage 1 report of its project to develop a roadmap to enhance cross-border payments. The report, which is being delivered to the G20, provides an assessment of existing arrangements and challenges for global cross-border payments.

Source: FSB reports on its work to develop a roadmap to enhance global cross-border payments.

Coronavirus (COVID-19) —UK Finance issues guidance on making payments safely in lockdown

UK Finance published guidance for customers who are self-isolating due to the coronavirus (COVID-19) pandemic and seeking to pay for essential goods. The guidance outlines the ways in which customers can pay safely, with specific guidance for those self-isolating or helping people at increased risk from the coronavirus, and includes industry standard processes as well as new developments to help customers to access cash.

Source: Advice for self-isolating customers seeking access to cash and wanting to pay for essential items.

Coronavirus (COVID-19)—Pay.UK delays publication of request to pay framework

As a result of the coronavirus (COVID-19) pandemic, Pay.UK announced a temporary delay in the publication of its request to pay framework, the message standards, rules and terms and conditions for request to pay, originally planned for 30 April 2020.

Sources: Statement regarding request to pay framework and  Request to pay.

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Fintech and cryptoassets

FSB consults on recommendations for regulation, supervision and oversight of global stablecoins

The FSB launched a consultation on ten high-level recommendations to address the regulatory, supervisory and oversight challenges raised by ‘global stablecoin’ arrangements. The recommendations have been drafted in response to a call by the G20 in June 2019 for the FSB to examine regulatory issues raised by these arrangements and to advise on multilateral responses as appropriate, taking account of the perspective of emerging markets and developing economies. The consultation closes on 15 July 2020.

Sources: Addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements: Consultative document and  FSB consults on regulatory, supervisory and oversight recommendations for “global stablecoin” arrangements.

Fintech can promote financial inclusion according to CPMI and World Bank report

The CPM) and the World Bank have published a new report entitled ‘Payment aspects of financial inclusion in the fintech era’. The report explains that fintech ‘can spur financial inclusion by facilitating payments’, although the opportunities come with challenges. The report provides a framework for incorporating and leveraging technological opportunities to promote access and use of transaction accounts, while also addressing potential challenges.

Sources: How fintech can promote financial inclusion - a new report on the opportunities and challenges and  Payment aspects of financial inclusion in the fintech era.

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Sustainable finance

Feedback requested on delegated regulations on ESG and climate benchmarks

The European Commission is seeking feedback on a draft delegated regulation on how benchmark administrators can build in ESG criteria in financial benchmarking and minimum standards for climate benchmarks. Separately, feedback is sought on a draft delegated regulation on minimum standards to help benchmark administrators design the new climate benchmarks: the ‘EU climate transition’ and ‘EU Paris-aligned’ benchmarks. Feedback is requested by 6 May 2020.

Sources: Financial benchmarking—building in environmental, social & governance criteriaSustainable finance—environmental, social and governance criteria (benchmarks) and  Sustainable finance—minimum standards for climate benchmarks.

IOSCO increases efforts to address sustainability and climate change issues

The International Organization of Securities Commissions (IOSCO) published a final report entitled ‘Sustainable Finance and the Role of Securities Regulators and IOSCO,’ which was prepared by the Sustainable Finance Network of IOSCO (SFN). The report aims to help market participants address issues concerning sustainability and climate change and highlights three recurring themes: multiple and diverse sustainability frameworks and standards including sustainability-related disclosure, a lack of common definitions of sustainable activities, and greenwashing and other challenges to investor protection.

Sources: IOSCO steps up its efforts to address issues around sustainability and climate change and  Sustainable Finance and the Role of Securities Regulators and IOSCO.

For further information, see: Global and EU sustainable finance initiatives.

ISLA’s Council for Sustainable Finance paper considers the positive mechanisms of securities lending and short selling

ISLA’s ICSF published its first position paper, Making Sense of Sustainable Securities Lending & Short Selling During the COVID-19 Crisis. ICSF argues that a collective commitment to the sustainability agenda can stimulate the market and increase investor confidence.

Source: ICSF publishes first position paper.

Joint Associations Letter calls for delay in supervisory action relating to Low Carbon Benchmarks Regulation

ISDA, the Association for Financial Markets in Europe (AFME), the European Federation of Energy Traders (EFET), the Association of European Energy Exchanges (Europex) and the Futures Industry Association (FIA) have published a joint letter to the European Commission’s Executive Vice-President, Valdis Dombrovskis, and the European Securities and Markets Authority’s (ESMA) Chairman, Steven Maijoor. The letter expresses the concerns of the organisations regarding the requirement for benchmark administrators to comply with additional obligations in Regulation (EU) 2019/2089 (Low Carbon Benchmarks Regulation) by 30 April 2020.

Sources: Joint Associations Letter to ESMA on Climate Benchmarks and  Joint Association Letter - Low Carbon Benchmarks Regulation.

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Dates for your diary

 

DateSubjectEvent
17 April 2020Regulation of capital markets

The temporary ban on short selling by the Comisión Nacional del Mercado de Valores (CNMV) of Spain on all transactions which might constitute or increase net short positions on shares admitted to trading to Spanish trading venues for which the CNMV is the competent authority, as well as to all related instruments relevant for the calculation of the net short position is expected to end.

 

19 April 2020

Regulation of insurance



UK, EU and international regulators and bodies

Deadline to apply to become a member of EIOPA’s Insurance and Reinsurance Stakeholder Group and the Occupational Pensions Stakeholder Group.

 

20 April 2020Sustainable finance

Deadline for responses to European Commission inception impact assessment of its delegated regulation on climate change mitigation and adaptation taxonomy under the Taxonomy Regulation.

 

 

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About the author:
Prior to joining LexisNexis in 2016 as a paralegal, Lauren was an adjudicator at the Financial Ombudsman Service. There she resolved consumers’ complaints, and gained knowledge about a wide variety of financial products. Before this she studied Law at Nottingham Trent University.