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HM Treasury, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) published a joint statement on the implementation of prudential reforms contained in the Financial Services Bill. As the Financial Services Bill continues
its progress through Parliament, HM Treasury, the FCA and the PRA consider it appropriate to update industry on planned timelines for introducing the UK’s Investment Firms Prudential Regime (IFPR) and implementation of those Basel III reforms
which make up the UK equivalent to the outstanding elements of the EU’s second Capital Requirements Regulation.
Source: Joint statement on the implementation of prudential reforms in the Financial Services Bill.
For further information, see: Impact of Brexit: CRR and prudential regulation—quick guide.
The economic secretary to HM Treasury, John Glen, wrote a letter to the chair of the Treasury Select Committee, Mel Stride MP, on the objectives and measures of the Financial Services Bill. Glen says he believes these measures will support the UK’s
position as a global leader in financial services.
Source: Letter from the economic secretary relating to the Financial Services Bill, dated 21 October 2020.
For further information, see: Brexit—impact on financial services.
The PRA has published a statement confirming that no additional exceptions from the application of the temporary transitional power (TTP) are expected to be required in relation to onshoring changes to new rules and legislation implementing
Directive (EU) 2019/878 (CRD V) and Directive (EU) 2019/879 (BRRD II).
Source: Statement on the application of the temporary transitional power to CRD V and BRRD II derived
For further information, see: Brexit and financial services—Temporary transitional powers (TTP).
The FCA updated its webpage for firms preparing for the end of the Brexit transition period, with considerations for UK firms and for EEA firms conducting business in the UK.
Sources: Preparing your firm for Brexit: end of the transition period and Towards end of the transition period: getting ready for a new environment.
The PRA published a speech by its CEO, Sam Woods, in which he discussed the direction of UK financial regulation post-Brexit and the Treasury’s proposal to delegate responsibility for the implementation of firm requirements to the regulators.
This would mean that ‘the vast majority of the updated banking regime will be implemented in PRA rules’, and Woods discussed in his speech the potential to use the new powers to simplify the regulation of smaller UK banks.
Source: Strong and simple: Speech given by Sam Woods, deputy governor for prudential regulation and chief executive officer, Prudential Regulation Authority.
Directions relating to the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 have been published. They relate to the Benchmarks Regulation, CSDR, CRA, short selling, EMIR, CRR
and Solvency II.
Source: Directions relating to the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019.
For further information, see: Financial Services passporting, equivalence and the UK post-Brexit.
TheCityUK has published a report saying financial services are the biggest exporting service sector in ‘every British region and nation apart from the South East and the East of England’. The report finds that all regions and nations in
Britain saw growth in financial and related professional services exports in 2019, with the industry’s exports rising overall by 8.2% year-on-year.
Source: Financial services is the largest services export for nearly all parts of the UK.
SI 2020/1274: This enactment is made in exercise of legislative powers under the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 in preparation for IP completion day. This enactment amends one piece of UK secondary legislation
in relation to financial services. It comes into force on 14 December 2020.
Read the official version of this legislation.
SI 2020/1301: This enactment is made in exercise of legislative powers under the European Union (Withdrawal Agreement) Act 2020 in preparation for IP completion day. This enactment amends 49 pieces of UK secondary legislation in relation
to financial services and economic, and monetary policy. It comes into force on 30 December 2020.
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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 issued an update on work that it intends to either stop or postpone in light of the ongoing impact of the coronavirus (COVID-19) pandemic and economic conditions. These changes will allow the FCA to focus its resources on the most
urgent work where it can make the most immediate difference to consumers and markets.
Source: Statement on certain FCA work in light of coronavirus and changing market conditions.
The Bank of England (BoE) published a speech by its governor, Andrew Bailey, on the long-term effects of the coronavirus (COVID-19) and the investment required to support the recovery. Bailey argued that the financial system can help companies
manage the current shock, saying regulators and financial services firms must work together so businesses are able to get the finance they need to invest for the future.
Source: The future for business investment in the age of COVID and the role of financial services—speech by Andrew Bailey.
The Financial Stability Board (FSB) published its 2020 report on the implementation and effects of the G20 financial regulatory reforms. The report, which will be delivered to G20 leaders ahead of their November 2020 summit, finds that
the G20 reforms after the 2008 financial crisis have served the financial system well during the COVID-19 pandemic.
Source: FSB publishes annual report on implementation and effects of financial regulatory reforms.
The European Parliament’s Economic and Monetary Affairs Committee (ECON) published its report on the proposed amendments to MiFID II included in the capital markets recovery package that was adopted by the European Commission
in response to the coronavirus (COVID-19) crisis. The report was adopted by ECON on 28 October 2020 and tabled for consideration by the European Parliament in plenary.
Source: ECON report on the proposal for a directive of the European Parliament and of the Council amending Directive 2014/65/EU as regards information requirements, product governance and position limits to help the recovery from the COVID-19 pandemic.
The FCA published a speech by its chief executive, Nikhil Rathi, on the challenges facing the regulator, including the coronavirus (COVID-19) pandemic, Brexit, climate change and LIBOR reform. Rathi said transforming the
FCA and the way that it works would involve maximising the use of data and technology, making the FCA more diverse, and ‘using the lessons of this extraordinary year to build on the best elements of our organisational
Source: Facing the future—challenges and priorities for the FCA.
The FCA published a Dear CEO letter relating to its supervision strategy for price comparison websites (PCWs). The letter sets out the FCA’s view of the key risks of harm to customers or markets which are
posed by PCW firms and asks CEOs to consider to what extent their firms present such risks, and their strategies, processes, systems and controls reduce those risks.
Source: Portfolio letter: FCA supervision strategy for price comparison websites (PCWs).
The European Commission published draft regulatory technical standards (RTS) on the deduction of software assets from Common Equity Tier 1 items under Regulation (EU) 575/2013 on prudential requirements
for credit institutions and investment firms (CRR). A draft explanatory memorandum has also been published. The draft RTS reflect changes made to the CRR by Regulation (EU) 2019/876 (CRR II) as part
of the risk reduction measures endorsed by European legislators in 2019.
Source: Commission Delegated Regulation (EU) …/...of 12.11.2020 amending Delegated Regulation (EU) No 241/2014 as regards the deduction of software assets from Common Equity Tier 1 items.
For further information, see: CRD IV—essentials.
The European Banking Authority (EBA) published the final methodology, draft templates and template guidance for the 2021 EU-wide stress test, along with the key milestones of the exercise. The methodology
and templates include some targeted changes compared to the postponed 2020 exercise, such as the recognition of FX effects for certain P&L items, and the treatment of moratoria and public guarantees
in relation to the coronavirus (COVID-19) crisis. The stress test exercise will be launched in January 2021 with the publication of the macroeconomic scenarios and the results published by 31 July 2021.
Source: EBA publishes the methodology for the 2021 EU-wide stress test.
The European Central Bank (ECB) published a speech by its vice-president, Luis de Guindos, on the euro area financial sector in the pandemic crisis, in which he discussed how the coronavirus (COVID-19) pandemic
has amplified existing vulnerabilities in the financial system, the role that financial regulation and prudential policy have played in response, and argued that further policy measures are needed to
develop the banking union
Source: The euro area financial sector in the pandemic crisis.
For further information, see: Banking Union: The EU banking package.
The PRA’s executive director for UK deposit takers supervision, Sarah Breeden, has written to chief financial officers (CFOs) with an action request relating to remediation of prudential treatment
of legacy instruments before the Capital Requirements Regulation I (CRR I) transition period ends.
Source: Letter from Sarah Breeden ‘Remediation of prudential treatment of legacy instruments’.
The BoE published a speech by its deputy governor, financial stability, Sir Jon Cunliffe, on the impact of leveraged investors on market liquidity and financial stability during the coronavirus (COVID-19)
Source: The impact of leveraged investors on market liquidity and financial stability.
The FSB published a letter from its chair, Randal K. Quarles, along with two reports delivered to G20 leaders ahead of their November 2020 summit. The documents set out the FSB’s work programme
to address risks from non-bank financial intermediation (NBFI) highlighted by the ‘market turmoil’ in March 2020, caused by the coronavirus (COVID-19) pandemic.
Sources: FSB acts to address issues highlighted by March market turmoil and
COVID-19 pandemic: Financial stability impact and policy responses.
The European Systemic Risk Board (ESRB) published a working paper entitled ‘Retrenchment of euro area banks and international banking models’. The authors analyse the importance of international
banking models, along with operational and funding dimensions, for the decline in international positions of European banks since the banking crisis in 2008.
Source: Retrenchment of euro area banks and international banking models.
Anil Kashyap, an external member of the Bank of England’s Financial Policy Committee (FPC), has given a speech in which he looked at how the chains of entities that exist in the market-based
finance (MBF) system can contribute to problems during periods of stress, as was the case in March 2020 due to the coronavirus (COVID-19) crisis. In the speech, he focused on the funding flows
and linkages between different parts of the system—securities and derivatives dealers, asset managers, pension funds, insurers, and a wide range of investment funds and money market funds.
Source: The dash for cash and the liquidity multiplier: Lessons from March 2020—speech by Anil Kashyap.
The FCA published a new webpage entitled ‘FCA warns firms to be responsible when handling client data’. The FCA observes that the current economic climate is changing the way
many firms operate and may cause some to leave the market or merge with other firms. When this happens, the FCA warns firms that they must make sure they lawfully process and transfer
client data. Firms that intend to transfer or receive personal client data must be able to demonstrate how they have considered the fair treatment of consumers and how their actions comply
with data protection and privacy laws. The webpage reminds firms what to consider in order to protect client data.
Source: FCA warns firms to be responsible when handling client data.
The International Swaps and Derivatives Association (ISDA) submitted its response to a consultation by the EBA on criteria for the use of data inputs in the risk-measurement model. The ISDA
states that it appreciates the efforts of the EBA in trying to develop guidelines to align industry standards on data inputs used in firms’ risk measurement models. However, it
also mentions that it has concerns regarding the prescriptive nature of the regulatory technical standards, especially in relation to the allowance of appropriate extrapolation techniques
and how this could bring about a level-playing-field issue if European banks have a different set of modelling options compared to banks in other jurisdictions.
Source: Consultation Response on Data Inputs in the Risk Measurement Model.
The Financial Action Task Force (FATF) published the opening remarks of FATF Executive Secretary, David Lewis, at the V20 summit. Since the last V20 meeting in 2019, Lewis commented
that ‘the sector has continued to grow, evolve and edge closer to mainstream adoption’ with understanding of the importance of anti-money laundering and counter terrorist
financing controls increasing. Lewis highlighted that 25 out of 39 FATF members have introduced new laws and regulations to implement FATF global Standards and industries have
developed technological solutions to enable compliance.
Source: Opening Remarks by FATF Executive Secretary at V20 Summit.
The FCA updated it webpage on the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the new Bounce Back Loan Scheme (BBLS). Following a 10 November 2020 update to the BBLS
scheme, the FCA has added information on managing financial crime.
Source: Statement on the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the new Bounce Back Loan Scheme (BBLS).
The Complaints Commissioner (CC) published two final reports, of which one relates to a complaint against the FCA and the PRA regarding their supervision of the Cooperative
Bank, and the other relates to a complaint made against the FCA by a professional spread better regarding a 2018 change in the client classification rules.
Sources: FCA00641 and
European Union – Consumer protection. Article 52(6)(a) of Directive (EU) 2015/2366, read in conjunction with art 54(1) thereof, should be interpreted
to the effect that it governed the information and conditions to be provided by a payment service provider wishing to agree, with a user of its services, on tacit
consent with regard to changes, in accordance with the detailed rules laid down in those provisions, of the framework contract that they had concluded, but did
not lay down restrictions regarding the status of the user or the type of contractual terms that could be the subject of such tacit consent, without prejudice,
however, where the user was a consumer, to a possible review of the unfairness of those terms in the light of the provisions of Council Directive (EEC) 93/13.
The Court of Justice of the European Union (First Chamber) so held in a preliminary ruling in proceedings concerning the validity of contractual terms relating
to the use of personalised multifunctional bank cards that were equipped, in particular, with near-field communication functionality, commonly known as the 'contactless
The FCA published a statement setting out its potential approach to the use of proposed new powers under the Financial Services Bill to ensure an orderly wind
down of LIBOR, and has launched two consultations on its proposed policy in relation to some of the new powers it would be granted under the Benchmarks
Regulation (BMR) as amended by the Bill. Comments on both consultations are sought by 18 January 2021. The FCA’s exercise of the powers would be
subject to a decision by ICE Benchmark Administration (IBA) to cease publication of LIBOR as the conclusion of its own upcoming consultation.
Sources: FCA consults on new benchmarks powers,
ICE Benchmark Administration to consult on its intention to cease the publication of GBP, EUR, CHF and JPY LIBOR and ISDA statement on IBA and UK FCA announcements on LIBOR consultations.
For further information, see: LIBOR transition and
European Securities and Markets Authority (ESMA) Decision (EU) 2020/1689 of 16 September 2020 renewing the temporary requirement to natural or legal
persons who have net short positions to lower the notification thresholds of net short positions in relation to the issued share capital of companies
whose shares are admitted to trading on a regulated market to notify the competent authorities above a certain threshold in accordance with of Article
28(1)(a) of Regulation (EU) 236/2012 (Short Selling Regulation) has been published in the Official Journal of the EU.
Source: European Securities and Markets Authority Decision (EU) 2020/1689 of 16 September 2020 renewing the temporary requirement to natural or legal persons who have net short positions to lower the notification thresholds of net short positions in relation to the issued share capital of companies whose shares are admitted to trading on a regulated market to notify the competent authorities above a certain threshold in accordance with point (a) of Article 28(1) of Regulation (EU) No 236/2012 of the European Parliament and of the Council
ESMA published its first annual statistical report on EU securities markets. The report uses new regulatory data sources to give a comprehensive overview
of European equity and bond markets in 2019, including the number, characteristics, volumes traded and transparency data on the equity and bond
instruments subject to MiFID II. It focuses on market monitoring, reference and transparency data, and securities markets statistics.
Sources: ESMA publishes first overview of the size and structure of EU securities markets and
Webinar on ESMA's ASRs on derivatives and securities markets.
The Council of the EU adopted its first-reading position on the European Commission’s draft regulation on a framework for the recovery
and resolution of central counterparties (CCPs), reflecting the compromise reached in negotiations between the Council and the European
Parliament in June 2020 with the support of the Commission. The Council’s position was adopted at first reading together with a statement
of the Council's reasons.
Source: Draft 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 (2016/0365 COD)—Adoption of the Council's position at first reading and of the statement of the Council's reasons—Outcome of the written procedure initiated by CM 4594/20.
The FSB published final guidance on financial resources to support CCP resolution and on the treatment of CCP equity in resolution. The guidance
aims to support resolution authorities and crisis management groups in assessing the adequacy of financial resources for CCP resolution
and provides guidance on approaches to the treatment of CCP equity in resolution.
Source: FSB releases guidance on CCP financial resources for resolution and announces further work.
The FSB published its 2020 Resolution Report, which updates on progress in implementing policy measures to enhance the resolvability of systemically
important financial institutions, and highlights the need for resolution preparedness. The report also discusses lessons learnt from the
coronavirus (COVID-19) pandemic, which confirmed the importance of ongoing work on resolvability, including for central counterparties
Source: FSB highlights need for resolution preparedness.
ESMA published its third annual statistical report analysing the EU’s derivatives markets. It provides a comprehensive market-level view
of the EU’s derivatives markets in 2019, which had a total size of €681tn gross notional amount outstanding, a decrease of 5%
on 2018. The report is based on data submitted under the European Markets and Infrastructure Regulation (EMIR).
Source: EU derivative clearing showed strong growth in 2019.
The Futures Industry Association (FIA) and the ISDA responded to ESMA consultation on its draft guidelines on common procedures and methodologies
on supervisory review and evaluation process of CCPs under Article 21 of EMIR. The associations support standardisation of scope and depth
of these reviews.
Source: FIA and ISDA respond to ESMA’s draft guidelines of supervisory review of CCPs.
The ISDA published the latest edition of derivatiViews, in which CEO Scott O’Malia provides informal comments on how cross-border derivatives
business between UK and EU participants will work after the Brexit implementation period ends on 31 December 2020. O’Malia highlights
the issue of equivalence for trading venues, which has not been addressed by either the UK or the EU.
Source: The Brexit end game.
On 13 November 2020 the ISDA responded to the Financial Accounting Standards Board (FASB) consultation on reference rate reform (topic 848).
ISDA says its members support the FASB’s proposals to address the accounting implications of the discounting transition for derivatives
contracts that do not reference a rate that is expected to be discontinued. The response also includes additional feedback and proposed
refinements for the FASB’s consideration.
Source: ISDA response on FASB reference rate reform guidance.
ESMA published a report on the preparedness of investment funds with significant exposures to corporate debt and real estate assets,
for potential future adverse liquidity and valuation shocks. The report finds that most funds exposed to corporate debt and real
estate managed to adequately maintain their activities when facing redemption pressures and/or episodes of valuation uncertainty
during the market stress linked to the coronavirus (COVID-19) pandemic, with only a limited number suspending subscriptions and
redemptions. ESMA says, however, that these findings should be interpreted with caution and identifies five priority areas for
action which would enhance the preparedness of these fund categories.
Sources: ESMA tells fund managers to improve readiness for future adverse shocks and
Report: Recommendation of the European Systemic Risk Board (ESRB) on liquidity risk in investment funds.
ESMA published its first report on the use of sanctions under the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD),
and its third annual report on the use of sanctions for Undertakings for Collective Investment in Transferable Securities (UCITS)
under the UCITS Directive 2009/65/EC.
Sources: ESMA publishes first report on use of sanctions under the AIFMD and
ESMA publishes third annual report on use of sanctions for UCITS.
The Alternative Credit Council (ACC) published a roadmap to reform the European Long-Term Investment Fund (ELTIF) and boost non-bank
lending in Europe. The European market for non-bank lending has grown 20% year on year during the last decade and now stands at
$242bn. However, the ACC argues that reforms are needed to maintain this growth rate as Europe still has among the highest barriers
to non-bank lending in the world. If successful, these reforms could see lenders invest $1.5tn in more than 25,000 European companies
Source: Financing European business non-bank lending and the economic recovery.
For further information, see: European Long-Term Investment Funds Regulation (the ELTIF Regulation).
ESMA, using its new convergence powers, identified costs and performance for retail investment products and market data quality as
the EU strategic supervisory priorities for national competent authorities (NCAs). Under these priorities, the specific topics
on which NCAs will undertake supervisory action in 2021, co-ordinated by ESMA, are costs and fees charged by fund managers; and
improving the quality of transparency data reported under MiFIR.
Source: ESMA identifies costs and performance and data quality as new Union strategic supervisory priorities.
The Investment Association (IA) published its 2021 Principles of Remuneration and updated the guidance it issued in April 2020 on executive
remuneration in light of the coronavirus (COVID-19) pandemic.
Sources: Investors clampdown on executive pension perks,
Letter sent to FTSE 350 companies and 2021 Principles of Remuneration: Updated COVID-19 guidance.
The BoE published a Quarterly Bulletin article, ‘The Resolvability Assessment Framework: increasing transparency and
accountability in bank resolution’, which concerns the last major piece of the UK’s bank resolution regime
published in July 2019: The Resolvability Assessment Framework (RAF). The RAF introduces a fundamental change in the way
banks approach their preparations for the range of unpredictable and challenging issues a resolution involves.
Source: The Resolvability Assessment Framework: increasing transparency and accountability in bank resolution.
The EBA published its report on the benchmarking of national loan enforcement frameworks across EU Member States. The report
was prepared in response to the European Commission’s call for advice in January 2019 on the benchmarking of national
loan enforcement frameworks (including insolvency frameworks) from a bank creditor perspective. The report concludes that,
at present, there is significant variability across Member States in the effectiveness of national insolvency practices
as measured by loan recovery rates, times of recovery and costs of recovery.
Source: EBA publishes report on benchmarking of national insolvency frameworks across the EU.
The chair of the supervisory board of the ECB, Andrea Enria, has said in a speech that banking union is transforming the European
banking sector from a shock amplifier into a shock absorber. He argued that a European deposit insurance scheme is needed
for the banking union to be a truly domestic market, but more can be done in the meantime to limit the ring-fencing of
Member States’ banking sectors.
Source: Andrea Enria: The yin and yang of banking market integration—the case of cross-border banks.
ECB Banking Supervision published the November 2020 edition of its Supervision Newsletter, which features articles on climate-related
and environmental risk supervision, bolstering fit and proper supervision, and what banks need to do to prepare for the
end of the Brexit transition period and beyond. It also includes articles on the impact of coronavirus (COVID-19) on Europe’s
smaller banks and good governance practices during the crisis.
Source: ECB Supervision Newsletter, November 2020.
The ECB has published an interview with Kerstin af Jochnick, a member of its supervisory board, in which she discussed aspects
of the ECB’s coronavirus (COVID-19) recovery and regulatory response, including relief measures, the use of capital
and liquidity buffers, and the ban on dividend distributions and share buy-backs. Af Jochnick also discussed the banking
union, operational risk and resilience, and climate-related financial risks.
Source: COVID-19: recovery and regulatory response.
The FSB published its 2020 Resolution Report, which updates on progress in implementing policy measures to enhance the resolvability
of systemically important financial institutions, and highlights the need for resolution preparedness. The report also
discusses lessons learnt from the coronavirus (COVID-19) pandemic, which confirmed the importance of ongoing work on resolvability,
including for central counterparties (CCPs).
The FCA confirmed its updated guidance to firms setting out enhanced support that should be available to mortgage borrowers
experiencing payment difficulties as a result of the coronavirus (COVID-19) pandemic. The guidance will be fully
in force from 20 November 2020 but the FCA encourages firms that are able to start providing this enhanced support
sooner to do so.
Sources: FCA confirms support for mortgage borrowers impacted by coronavirus and
Finalised guidance: Mortgages and coronavirus: updated guidance for firms.
For further information, see: Coronavirus (COVID-19)—implications for consumer credit, overdrafts and mortgages.
SI 2020/1248: Provisions are made to amend the Consumer Credit (Enforcement, Default and Termination Notices) Regulations
1983 that govern the prescribed language in and form of enforcement, default and termination notices. This instrument
updates the content of these notices and aims to make them less intimidating and easier to understand. These Regulations
come into force on 2 December 2020.
Read the official version of
this legislation and the explanatory memorandum.
The European Insurance and Occupational Pensions Authority (EIOPA) launched a survey on the application of
the Insurance Distribution Directive (EU) 2016/97 (IDD), aiming to gather feedback from stakeholders
on the improvement of quality of advice and selling methods, the impact of the IDD on small and medium-sized
enterprises, and possible further improvements.
Source: Survey on the application of the Insurance Distribution Directive.
For further information, see: Insurance Distribution Directive (IDD)—essentials.
The PRA published a letter to the chief risk officers of general insurance firms it regulates. The letter shares
insights from the PRA’s recent supervision review work across the general insurance sector, focusing
on reserving and exposure management, including some observations on contract uncertainty in light of the
coronavirus (COVID-19) crisis. The PRA expects the boards and reserving committees of general insurers
to reflect on the points covered in the letter appropriately and explicitly, to the extent relevant for
their businesses, as part of setting the year-end Solvency II and booked reserves.
Source: Letter to general insurance firms: ‘Insights from PRA review work on reserving and exposure management’.
Insurance Europe (IE) published its response to the European Commission's consultation on the review of EU
trade policy. IE notes that (re)insurers need the right rules at EU and international levels to maintain
competition in the global market and the right conditions in order to access international markets. IE
notes that the (re)insurance industry is Europe's largest investor, investing over €10bn into the
economy and that it can provide a unique opportunity to invest in sustainable European economic growth.
The life insurance market also provides and encourages stable and sustainable savings and pensions.
Source: EU rules and trade policy must help, not hinder, European firms’ global competitiveness.
The FCA published to its dedicated business interruption insurance website details on how to rewatch the Supreme
Court appeal, relating to the FCA's test case concerning non-damage business interruption insurance claims
arising out of the coronavirus (COVID-19) lockdown.
Source: Business interruption insurance.
For further information, see: Coronavirus (COVID-19)—business interruption insurance.
The FCA published the timetable of the Supreme Court hearing to its dedicated business interruption insurance
website. The appeal commenced on 16 November 2020 and concerns the appeal of its test case concerning non-damage
business interruption insurance claims arising out of the coronavirus (COVID-19) lockdown.
EIOPA published a supervisory statement on sound supervisory practices for registering or authorising
institutions for occupational retirement provision (IORPs), including the assessment of suitability
for cross-border activities. EIOPA’s main aim is to ensure that IORPs operating cross-border
do so under prudent conditions, regardless of the different authorisation or registration regimes.
Source: EIOPA calls for sound supervisory practices in registering or authorising IORPs to foster a level-playing field across the EU.
Investors will be clamping down further on executive pension perks in a move to promote fairness and
good employee relations, the IA updated annual pay guidelines for companies has revealed.
Source: Investors clampdown on executive pension perks.
The Association of British Insurers (ABI) called for a fundamental rethink of how financial advice
and guidance operate. It comes as 72% of people say they will not pay for financial advice.
Source: ABI calls for financial advice and guidance overhaul as polling reveals 72% of people will not pay for advice.
The ECB is to launch an independent review of an incident that affected its real-time gross
settlement system TARGET2 on 23 October 2020, causing an outage for almost 10 hours. An
initial investigation determined that a software defect in a network device was the specific
technical cause of the incident. The main findings of the review will be shared with market
participants and made public by the second quarter of 2021.
Source: ECB announces independent review of payments system outage.
SI 2020/1275: Amendments are made to the Electronic Money Regulations 2011 and the Payment
Services Regulations 2017 to apply sections 93(4) and 233-236 of the
Banking Act 2009, with modifications, to authorised electronic money institutions, small
electronic money institutions, authorised payment institutions and small payment institutions.
These Regulations come into force on 8 December 2020.
The Council of the EU adopted a set of conclusions on the role of regulatory sandboxes
and experimentation clauses in ‘an innovation-friendly, future-proof, sustainable
and resilient EU regulatory framework’. The Council is encouraging the European
Commission to continue considering the use of experimentation clauses on a case-by-case
basis when drafting and reviewing legislation, as well as to evaluate the use of
experimentation clauses in ex-post evaluations and fitness checks on the basis
of an exchange of information with Member States.
Source: Regulatory sandboxes and experimentation clauses as tools for better regulation: Council adopts conclusions.
The FSB published videos of online workshops it held on BigTech’s role in emerging
markets, and on RegTech/SupTech developments and financial stability implications.
Sources: FSB virtual workshop on BigTech firms in emerging market and developing economies and
FSB virtual workshop on the use of supervisory and regulatory technology by authorities and regulated institutions.
The Association for Financial Markets in Europe (AFME) and PwC jointly published a
report, titled the ‘Technology and Innovation in Europe’s Capital Markets’
report, which looked at the largest investment banks in Europe with the aim of
assessing their technological progress over the last two years. The report found,
while the banks have ‘accelerated adoption of emerging technologies’,
insufficient IT investment and complex legacy systems remain barriers to progress
Source: AFME and PwC identify trends and challenges for European ‘investment banks of the future’.
Andy Haldane, chief economist and member of the Monetary Policy Committee at the BoE,
said in a speech that developments in digital finance could transform how consumers
and businesses make payments and raise finance, which could help revitalise the
UK economy in the wake of the coronavirus (COVID-19) pandemic.
Source: Seizing the opportunities from digital finance—speech by Andy Haldane.
The EU-South America Forum on Financial Regulation published a joint statement
following its first meeting on 17 November 2020. Established in 2020, the
Forum aims to enhance mutual understanding and cross-border co-operation
among financial authorities from the EU and jurisdictions in the South
America region as well as Mexico. Among other issues, participating authorities
discussed sustainable finance and financial stability risks, including
the evolving stability issues resulting from the coronavirus (COVID-19)
pandemic and sovereign debt sustainability.
Source: EU-South America Forum on financial regulation—Joint statement—18 November 2020.
The BoE issued a press release announcing that, in line with comments
made by governor Andrew Bailey on 9 November 2020, it is restarting
the Climate Biennial Exploratory Scenario (CBES). The CBES will
be launched in June 2021.
Source: The Bank of England is restarting the Climate Biennial Exploratory Scenario (CBES).
COP26 President, Alok Sharma, commented on the ‘pivotal role’
of finance in tackling climate change at Finance in Common, the
first global summit of all Public Development Banks. Sharma commented
on public finance playing a crucial role in stimulating private
and global energy investments, of which $3.5m a year until 2050
is needed to limit temperature rises to 1.5 degrees. Sharma stressed
that donors must ‘meet and surpass the goal of mobilising
$100 billion a year’, adding that ‘our COP26 Presidency
will focus on working with others to mobilise funds and improve
access for adaptation and resilience’. All public development
banks must come forward with clear plans including target dates
by which their operations will be fully aligned with the Paris
Agreement before COP26, explained Sharma.
Source: The pivotal role of finance in tackling climate change.
The PRA published its response to industry feedback received on the
framework for assessing financial impacts of physical climate change
report. According to the PRA, the feedback provided a consensus
that both the guidance and methodology included in the framework
are valuable, and useful in the assessment of physical climate
change risk for the general insurance industry. The case studies
provided were seen as being very helpful in guiding firms through
the different steps identified by the framework, and facilitating
progress that is already visible since the publication of the report.
Source: Response to the general insurance industry—A framework for assessing financial impacts of physical climate change.
The House of Commons Treasury Committee published a letter dated 9
November 2020 from John Glen MP, economic secretary to the Treasury,
to the chair of the committee, Mel Stride MP, regarding the government’s
announcement and report on the UK’s implementation of climate-related
Source: Letter from the economic secretary relating to climate-related financial disclosures, dated 9 November 2020.
UK Finance published a paper on sustainable finance proposing a principles-based
framework for the measurement and reporting of multi-year commitments.
The paper focuses specifically on the way in which credit institutions
measure and report multi-year commitments to sustainable finance,
and presents high-level principles as market guidance. UK Finance
has also published a related blog on the Green Horizon Summit,
held on 9-11 November 2020, hosted jointly by the City of London
Corporation, the Green Finance Institute and the World Economic
Sources: Sustainable finance—Establishing a principles-based framework for the measurement and reporting of multi-year commitments and
The Green Horizon.
The International Capital Market Association (ICMA) and the Japan Securities
Dealers Association (JSDA) hosted a joint conference on the ‘Developments
in bond markets contributing to sustainability under COVID-19—globally
and in Japan’.
Source: ESG, finance, and building back better: a silver lining for COVID-19?.
The IA published a climate change position paper, setting outcommitments
from the industry and suggestions for how the UK government can
further the interests of green investment. IA’s paper discusses
the work of the Taskforce on Climate Related Financial Disclosure
(TCFD), green gilts and net-zero targets.
Source: IA publishes industry stance on tackling climate change.
20 November 2020
Deadline for submissions of written evidence to
the House of Lords EU Services Sub-Committee’s
inquiry into financial services after
22 November 2020
Regulation of insurance
Deadline for responses to HM Treasury’s
call for evidence on Pool Re.
23 November 2020
The FCA will begin to publish dual-regulated
firms’ Directory Persons data on the
FS Register from 23 November 2020.
Deadline for responses to the FCA’s consultation
setting out its proposals to extend the scope
of its annual financial crime reporting obligation
(REP-CRIM) to include firms, including cryptoasset
exchange providers, that carry on regulated
activities that potentially pose a higher money
laundering (ML) risk, irrespective of a firm’s
Complaints, compensation and claims management
Investigations, enforcement and discipline
Dame Elizabeth Gloster is expected to deliver her
report into the regulation of London Capital
and Finance (LC&F), to the FCA.
24 November 2020
Deadline for responses to EIOPA’s
consultation on a supervisory statement
on the use of risk mitigation techniques
by insurance and reinsurance undertakings.
25 November 2020
International—financial services and related sectors
Deadline for responses to the UK governments
call for evidence on how to improve
the UK’s international regulatory
co-operation practices in response to a
review by the Organisation for Economic
Co-operation and Development (OECD).
Payment services and systems
Deadline for responses to HM Treasury’s
call for evidence on access to cash.
Deadline for responses to ESMA’s
consultation on the functioning of
Organised Trading Facilities.
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