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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 Financial Conduct Authority (FCA) published proposals on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of the coronavirus (COVID-19) pandemic,
after 31 October 2020. The guidance follows temporary measures that have been in place since May 2020, and sets out how firms should provide tailored support to consumers who have already had a payment deferral and those newly in financial
difficulty due to changed circumstances relating to COVID-19.
Source: FCA proposes additional measures to help insurance customers in financial difficulty because of coronavirus.
For further information, see: FCA: Treating Customers Fairly—essentials.
The president of the European Central Bank (ECB), Christine Lagarde, delivered a speech on rebuilding and sustaining EU growth, at the G30 International Banking Seminar in Frankfurt am Main. Lagarde discussed the economic impact of the coronavirus
(COVID-19) pandemic and the EU’s response, and noted that the acceleration of the pre-existing spread of digitalisation was set to permanently reshape economies and societies.
Source: President of the ECB Christine Lagarde speech: Rebuilding and sustaining growth—G30 International Banking Seminar, Frankfurt am Main, 18 October 2020.
SR 2020/219: Provisions are made to provide a financial assistance scheme following market disturbance to ornamental horticulture producers who have suffered a financial loss as a consequence of the COVID-19 coronavirus pandemic in Northern Ireland.
These Regulations come into force on 14 October 2020.
Read the official version of this legislation and the explanatory memorandum.
Back to top of page
With agreement on the future UK-EU relationship in doubt following the conclusion of the October European Council, Prime Minister, Boris Johnson, and Chancellor of the Duchy of Lancaster, Michael Gove, have called on business leaders‘to
step up their efforts to get ready’ for inevitable changes taking effect at the end of the transition period. The ‘call to action’ comes as the government launches a fresh information campaign aiming to prepare business
leaders for what they refer to as ‘Australia-style’ arrangements at the end of the Brexit transition period on 31 December 2020. The campaign ‘Time is running out’, aims to spread awareness of ‘guaranteed
changes’ taking place when the transitional arrangements under the Withdrawal Agreement come to an end and new arrangements come into effect on 1 January 2021. Gove has also ordered the XO Cabinet Committee to convene daily,
chairing the 150th meeting of the operations committee in COBR next week. Meanwhile, HM Revenue & Customs (HMRC) has written to VAT-registered businesses to remind them of actions required to prepare for the end of the transition
period and beyond. Further new and updated guidance may be issued as the transition period progresses, so stakeholders are advised to monitor these pages for updates. Full implementation of the Withdrawal Agreement is an agreed priority
in any event. The fourth ordinary meeting of the Withdrawal Agreement Joint Committee took place on 19 October 2020 with both sides committing to intensify their work.
Sources: GOV.UK—Press release: Time is running out for businesses to prepare, GOV.UK—Correspondence: Letters to businesses about new trade arrangements with the EU from 1 January 2021,
Hansard, House of Commons, 19 October 2020 and EU Exit: Update on negotiations and the work of the Joint Committee.
The Prudential Regulation Authority (PRA) published consultation paper CP17/20, which sets out proposed changes to the PRA’s rules, supervisory statements and statements of policy to implement elements of Directive (EU) 2019/878 (CRD
V). It also proposes to update aspects of the UK framework as a result of amendments made to the Capital Requirements Regulation (EU) 575/2013 (CRR) by Regulation (EU) 2019/87 (CRR II), which apply during the Brexit transition
period. The consultation closes on 17 November 2020.
Source: Capital Requirements Directive V (CRD V): Further implementation.
HM Treasury published the outcome of its consultation on the UK implementation of the Bank Recovery and Resolution Directive II (Directive (EU) 2019/879) (BRRD II). Under the Withdrawal Agreement the UK is required to transpose BRRD
II by 28 December 2020, although it does not plan to transpose requirements that do not need to be complied with until after the end of the UK’s Brexit transition period, in particular Article 1(17) which revises the framework
for MREL requirements across the EU. Various sunset clauses will also be introduced which will mean that certain BRRD provisions introduced by BRRD II will cease to have effect in the UK from 1 January 2021.
Source: Consultation on the transposition of the Bank Recovery and Resolution Directive II.
For further information, see: Impact of Brexit: BRRD—quick guide.
HM Treasury published a summary of the responses it received to its consultation on updating the UK’s prudential regime before the end of the Brexit transition period, which outlined how the government intends to implement the Fifth
Capital Requirements Directive (EU) 2019/878 (CRD V). The Directive updates the prudential legislative framework that applies to banks and systemic investment firms. The consultation sought comment on the government’s
proposals for new requirements on financial holding companies, changes to the macro-prudential toolkit and the intention to exempt non-systemic investment firms from the scope of CRD V.
Sources: Consultation outcome: Consultation on updating the UK’s prudential regime before the end of the transition period and Updating the UK’s prudential regime before the end of the transition period: Consultation response.
For further information, see: Impact of Brexit: CRR and prudential regulation—quick guide.
Anna Sweeney and Charlotte Gerken, both executive directors at PRA Insurance Supervision, and Matt Brewis, director of the FCA Insurance and Conduct Specialists, published a Dear CEO letter to PRA-regulated insurance firms preparing for
the end of the Brexit transition period. The letter emphasised that it is imperative that firms continue to build on their preparatory work to ensure that they, and to the extent possible their clients, are ready for a range of scenarios
at the end of the transition period. The letter set out key areas requiring final preparations, including: contingency planning and continuity of cross-border business in respect of EU liabilities; Part VII saving provision; data;
EEA bank account closures; EEA passporting firms; and TPR firms’ Part 4A submission timeline.
Source: Joint FCA/PRA Dear CEO Letter to PRA-regulated insurance firms preparing for the end of the transition period.
HM Treasury published a consultation to mark the launch of Phase II of the Financial Services Future Regulatory Framework Review (the FRF Review) to follow up from Phase I, which was launched in June 2019 following the then chancellor’s
Mansion House speech. The FRF Review is a major long-term review into the future of the UK’s regulatory framework following the UK’s exit from the EU.
Source: Financial Services Future Regulatory Framework Review: Phase II consultation.
The UK government introduced the Financial Services Bill in Parliament. The Bill is intended to ensure the UK’s regulatory framework continues to function effectively for the UK after leaving the EU. Among other things, the Bill
includes provisions to amend the Benchmarks Regulation, which is intended to help manage and direct an orderly wind-down of critical benchmarks such as LIBOR.
Sources: Financial Services Bill introduced today, FCA welcomes Financial Services Bill and Financial Services Bill 2019-21.
HM Treasury published an update on financial services statutory instruments (EU exit instruments) made under the European Union (Withdrawal) Act 2018 (EU(W)A 2018), as amended by the European Union (Withdrawal Agreement)
Act 2020 (EU(WA)A 2020).
Source: Update: Financial Services EU Exit Statutory Instruments.
SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Communities Act 1972, and the European Union (Withdrawal) Act 2018 in preparation for IP completion day. This draft enactment
is proposed to amend five pieces of UK primary legislation, seven pieces of UK secondary legislation, and one piece of retained EU legislation in relation to financial services and markets in order to address failures of retained EU
law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU. It comes into force partly on 28 December 2020, and fully on IP completion day.
The full draft legislation can be found here. The draft explanatory memorandum can be found
For further information, see: Quick Look Brexit Financial Services Legislation Status Guide—BRRD and BRRD II.
The government published its response to the Ministry of Justice (MoJ) consultation on proposed changes to the rules governing the departure from retained EU case law by UK courts and tribunals after IP completion day. The consultation
outlined government proposals for exercising powers introduced into the European Union (Withdrawal) Act 2018 (EU(W)A 2018) by the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020), to introduce regulations
designating additional courts and tribunals with the power to depart from retained EU case law. Under the original provisions, only the UK Supreme Court (and in some cases the High Court of Justiciary in Scotland) have such powers.
Despite concern within the legal services sector, legal academics, businesses and other organisations (representing over 50% of the respondents), the government is proceeding with regulations extending the powers to depart from retained
EU case law to the Court of Appeal and its equivalents. The government’s aim is to allow retained EU case law to evolve at a faster rate, without overburdening the Supreme Court and High Court of Justiciary. To this end, a draft
Brexit SI was laid in Parliament as the consultation outcome was issued. Professor Adam Cygan, of the University of Leicester, and Sally Shorthose, partner at Bird & Bird, comment on the outcome.
Sources: MoJ Consultation: Departure from retained EU case law by UK courts and tribunals and
Draft European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020.
SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for IP completion day. This draft enactment is proposed to provide which courts are relevant
courts for the purposes of section 6 of the 2018 Act. It comes into force on IP completion day.
SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020 in preparation for IP completion day.
This draft enactment is proposed to amend 16 pieces of UK primary legislation and two pieces of UK secondary legislation in relation to EU withdrawal. It comes into force partly immediately before IP completion day, and fully on IP
A draft version of the Financial Holding Companies (Approval etc) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 has been published. The draft Regulations are laid before
Parliament under paragraph 2 of Schedule 2 to the European Communities Act 1972 and paragraph 1(1) of Schedule 7 to the European Union (Withdrawal) Act 2018, for approval by resolution of each House of Parliament.
Source: Draft Financial Holding Companies (Approval etc) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020.
SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Communities Act 1972, the Financial Services and Markets Act 2000, and the European Union (Withdrawal) Act 2018 in
preparation for IP completion day. This draft enactment is proposed to amend one piece of UK primary legislation and five pieces of UK secondary legislation in relation to financial services. It comes into force partly on the day after
the day on which these Regulations are made, and 28 December 2020, and fully on 29 December 2020.
For further information, see: Quick Look Brexit Financial Services Legislation Status Guide—CRR.
SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Communities Act 1972 and the European Union (Withdrawal) Act 2018 in preparation for IP completion day. This draft enactment
is laid to amend three pieces of UK primary legislation, 31 pieces of UK secondary legislation, and six pieces of retained EU legislation, and revoke one piece of retained EU legislation in relation to securities financing transactions.
It comes into force partly on the day after the day on which these Regulations are made, and fully on IP completion day.
For further information, see: Quick Look Brexit Financial Services Legislation Status Guide—Securitisation Regulation.
In a draft report (2020/0152)(COD)), the European Parliament rejected the European Commission proposal for a regulation to amend Directive 2014/65/EU (MiFID II) in relation to information requirements, product governance
and position limits to aid recovery from the coronavirus (COVID-19) pandemic.
Sources: European Parliament rejection and European Commission May Communication.
The European Commission published its work programme for 2021. It includes plans to revise the framework for handling EU bank failures, take measures to boost cross-border investment in the EU, and step up the fight against
money laundering. The Commission will also continue progress on sustainable financing, notably by proposing to establish an EU green bond standard.
Source: 2021 Commission work programme—from strategy to delivery.
The Bank of England (B0E), the Banque de France, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) have launched their first annual joint workshop on international
capital flows and financial policies. The objective is to deepen the understanding of the benefits and risks of global capital flows and advance the debate on the appropriate financial policy toolkit, including through
discussion of the effectiveness and externalities of various policies.
Source: 1st joint Bank of England—Banque de France—IMF—OECD workshop on international capital flows and financial policies.
The FCA published an insight paper entitled ‘The people science revolution—improving diversity objectively’. The authors argue that measuring more ‘traditional’ aspects of identity
diversity, such as gender and ethnicity, is valuable as a starting point, but while numbers provide an essential benchmark, it is important to have a clear grasp of what they can and cannot show and to have
an analytical framework for driving change.
Source: FCA insight—The people science revolution—improving diversity objectively.
The ECB published presentation slides from a meeting between Edouard Fernandez-Bollo, a member of the Supervisory Board of the ECB, and Mazars and the Official Monetary and Financial Institutions Forum (OMFIF),
regarding financial regulation in 2020: trends in the EU and global patterns. According to the ECB, measures taken during the coronavirus crisis were prompt, balanced, risk-sensitive and transparent,
making use of the flexibility contained in the Capital Requirements Regulation. However, it warns there is no room for complacency in facing the challenges of a ‘new normal’.
Source: Financial regulation in 2020: trends in the EU and global patterns.
The PRA published consultation paper CP17/20, which sets out proposed changes to the PRA’s rules, supervisory statements and statements of policy to implement elements of Directive (EU) 2019/878 (CRD
V). It also proposes to update aspects of the UK framework as a result of amendments made to the Capital Requirements Regulation (EU) 575/2013 (CRR) by Regulation (EU) 2019/87 (CRR II), which
apply during the Brexit transition period. The consultation closes on 17 November 2020.
The European Banking Authority (EBA) and the European Systemic Risk Board (ESRB) have both issued opinions following a notification by Finansinspektionen, the Swedish Financial Supervisory Authority (FSA),
of its intention to extend a measure which aims to enhance the resilience of Swedish banks to potential severe downward corrections in residential real estate markets. Based on the evidence submitted,
the EBA and the ESRB have confirmed that they do not object to the extension of the measure, which will apply from 31 December 2020 until 30 December 2021.
Sources: ESRB opinion regarding the Swedish notification of an extension period of the period of application of a stricter national measure based on under Art. 458 CRR and
EBA issues opinion on measures to address macroprudential risk following notification by Finansinspektionen.
The ECB published a working paper on money markets, central bank balance sheet and regulation. It analyses money market developments since 2005, and the factors that have affected money market functioning.
The paper finds that, with regard to the impact of Basel III regulations, the leverage ratio regulation impacts money markets at quarter-ends due to ‘window-dressing’ effects, reducing money
market volumes and rates.
Source: ECB working paper series: Money markets, central bank balance sheet and regulation.
HM Treasury published a record of the 15 September 2020 meeting between the governor of the Bank of England (BoE) and the chancellor of the Exchequer to discuss the latest Financial Stability Report,
which was published on 6 August 2020. The governor and the chancellor noted the results of the Financial Policy Committee (FPC) reverse stress test, which showed there is capacity in the banking
sector to continue to support the real economy, and the FPC’s judgement that it would take an economic scenario much more severe than the current situation to compromise banks’ ability
and willingness to continue lending.
Source: HMT record of Financial Stability Report meeting: August 2020.
The ESRBpublished its EU Non-bank Financial Intermediation (NBFI) Risk Monitor 2020, the fifth issue in an annual series that contributes to the monitoring of a part of the financial system that
has grown in recent years and accounts for around 40% of the EU financial system. The report sets out a number of cyclical risks identified for the NBFI sector as well as key structural risks
Source: ESRB publishes EU Non-bank Financial Intermediation Risk Monitor 2020.
The FCA published a third insight piece on data sharing, trust and consumer freedoms, as part of its series of articles on Future Market Dynamics.
Source: FCA newsletter—Future Market Dynamics Part 3—data sharing, trust and a world of choice (16 October 2020).
The Financial Stability Board (FSB) published its final report on ‘Effective practices for cyber incident response and recovery’ (CIRR).
Source: FSB CIRR final report.
The Financial Action Task Force (FATF) published a speech by its president, Marcus Pleyer, at the 14 October 2020 meeting of G20 finance ministers and central bank governors. The
G20 has also expressed its support for FATF’s work to address money laundering (ML) and terrorist financing (TF) risks arising from the coronavirus (COVID-19) pandemic,
and from stablecoins.
Sources: G20 supports the FATF’s work to address money laundering and terrorist financing risks arising from the COVID-19 pandemic and so-called stablecoins (14 October 2020) and
FATF President remarks to G20 finance ministers and central bank governors meeting.
The Treasury Committee chair, Mel Stride MP, wrote to the FCA and the National Crime Agency (NCA) asking for an update on their review of the evidence of the Bank Signature Forgery
Campaign, which alleges potential criminal activity occurred at banks whereby home repossessions and other such documents were not being signed by the authorised signatory.
Source: Treasury Committee seeks update on Bank Signature Forgery Campaign.
The FCA published consultation paper CP20/21: Breathing Space Regulations: changes to our Handbook, which sets out minor changes resulting from regulations on problem debt
that are expected to come into force in England and Wales in May 2021. Feedback is sought by 6 January 2021.
Source: CP20/21: Breathing Space Regulations: changes to our Handbook.
The FCA published an occasional paper which aims to better understand consumer financial wellbeing through survey responses, analysis of banking data and the objective factors
most closely associated with money management stress.
Source: Occasional paper No. 58: Understanding consumer financial wellbeing through banking data.
The FCA amended its statement on firms' handling of complaints during coronavirus to update the information on PPI complaints and to reinforce messaging about the
importance of continuing to comply with complaint handling requirements.
Source: Firm handling of complaints during coronavirus.
The Financial Services Compensation Scheme (FSCS) updated its timeline on the judicial review of its decision in respect of London Capital & Finance plc (LCF).
Source: FSCS—updated webpage re London Capital & Finance plc.
The All-Party Parliamentary Group (APPG) on Fair Business Banking has been granted permission by the Supreme Court to intervene in Pakistan International Airline
Corporation (Respondent) v Times Travel (UK) Ltd (Appellant) UKSC 2019/0142, a landmark appeal on the doctrine of duress. The APPG says the move will allow
the Supreme Court to take account of the APPG’s experience of how the doctrine of lawful act duress operates in the banking context, particularly
where it restricts bank customers from challenging settlements with lenders entered under duress.
Source: Supreme Court grants APPG permission to intervene in first ever appeal on lawful act duress.
The European Securities and Markets Authority (ESMA) published issue 17 of its Newsletter, which covers appointments to its Central Counterparty
Supervisory Committee, its latest Trends, Risks and Vulnerabilities (TRV) report, and its review of the Market Abuse Regulation (MAR).
Source: ESMA Newsletter.
The ESRB published a recommendation (dated 24 September 2020) on identifying legal entities (ESRB/2020/12).
Source: Recommendation of the European Systemic Risk Board of 24 September 2020 on identifying legal entities (ESRB/2020/12).
The FSB published a global transition roadmap for LIBOR which sets out clear actions for financial firms and their clients to take in order
to ensure a smooth LIBOR transition.
Source: Global transition roadmap for LIBOR.
Member States’ ambassadors to the EU agreed the Council’s position on the capital markets recovery package, which contains
targeted amendments to the EU capital market rules to help EU companies raise capital on public markets, support the lending
capacity of banks and boost investment in the real economy. The Council’s position includes a number of amendments. On
the basis of this negotiating mandate, the presidency will start negotiations with the European Parliament as soon as the Parliament
has adopted its position.
Source: Capital Markets Recovery Package: Council agrees its position.
For further information, see: Coronavirus (COVID-19)—EU capital markets recovery package.
ESMA published a list of national thresholds below which the obligation to publish a prospectus does not apply. It contains a short
description of the thresholds, a summary of any national rules which apply to offers below that threshold, and hyperlinks to
the relevant national legislation and rules.
Source: ESMA list of national thresholds pursuant to the Prospectus Regulation.
ESMA published a consultation paper (ESMA70-151-3023) on draft regulatory technical standards (RTS) on conditions under
which additional services or activities to which a central counterparty (CCP) wishes to extend its business are not
covered by the initial authorisation and conditions under which changes to the CCP's models and parameters are significant
under EMIR 2.2 ((EU) 2019/2099 amending the EMIR Regulation (EU) No 648/2012).
Source: Consultation paper: Regulatory technical standards on conditions under which additional services or activities to which a CCP wishes to extend its business are not covered by the initial authorisation and conditions under which changes to the models and parameters are significant under EMIR.
For further information, see: EMIR REFIT and EMIR 2.2 roadmap.
In a letter dated 16 October 2020, the economic secretary to the Treasury and City minister John Glen responded to a letter
from Sir William Cash (chair of the European Scrutiny Committee) of 24 September 2020, in which he asked for an update
on EU supervision of UK central counterparties (CCPs) under the amended EMIR 2.2.
Source: John Glen letter to William Cash of the European Scrutiny Committee dated 16 October 2020.
The Commodity Futures Trading Commission (CFTC) and the BoE signed an updated memorandum of understanding (MoU) regarding
co-operation and the exchange of information in the supervision and oversight of clearing organisations that operate
on a cross-border basis in the US and in the UK.
Source: CFTC and BoE sign new MoU for supervision of cross-border clearing organisations.
The International Swaps and Derivatives Association (ISDA) published four white papers analysing the legal issues surrounding
the use of smart derivatives contracts on distributed ledger technology (DLT). The four papers consider the legal issues
from a French, Irish, Japanese and New York private law perspective, and look at two particular issues: whether the
introduction of a DLT platform to a traditional trading relationship would impact the resolution of contractual disputes,
and how to identify the legal situs of digital assets in order to effect payment or exchange collateral on certain
Source: ISDA Launches New Legal Papers on Smart Contracts and DLT.
The European Commission launched a public consultation on the review of the European Long-Term Investment Fund
(ELTIF) Regulation ((EU) 2015/760) (ELTIF Regulation).
Sources: Long-term investment funds—review of EU rules,
Capital markets union: Commission launches public consultation on EU rules for long-term investment funds (ELTIF) and
EC should make European Long-Term Investment Funds more attractive to long-term institutional investors.
For further information, see: European Long-Term Investment Funds Regulation (the ELTIF Regulation).
The chair of ESMA, Steven Maijoor, delivered a keynote address at the Irish Funds ‘Annual Global Funds’
online conference. Among other topics, Maijoor addressed MiFID client categories and the PRIIPS KID.
Source: Steven Maijoor delivers keynote at Irish Funds Annual Global Funds online conference.
Regulation (EU) 2020/1503 on European crowdfunding service providers for business (the EU Crowdfunding
Regulation) has been published in the Official Journal of the EU, together with Directive (EU)
2020/1504, which excludes crowdfunding service providers from the scope of Directive 2014/65/EU on
markets in financial instruments (MiFID II). Both instruments were adopted by the European Parliament
and Council on 7 October 2020 and will enter into force on 9 November 2020.
Sources: Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 and
Directive (EU) 2020/1504 of the European Parliament and of the Council of 7 October 2020 amending Directive 2014/65/EU on markets in financial instruments.
The European Insurance and Occupational Pensions Authority (EIOPA) launched a program of targeted
training on insurance supervision for 17 national competent authorities (NCAs). The training
will enhance supervisory capacity of insurance NCAs to ‘reinforce high-quality and effective
supervision, the protection of policyholders and beneficiaries and financial stability’.
Source: EIOPA—Supporting a common supervisory culture: Targeted training on insurance supervision.
EIOPA has published its third annual European insurance overview, an extension of its statistical
services in order to provide an easy-to-use and accessible overview of the sector. The report
is based on annually reported Solvency II information, ensuring that the data has a high coverage
in all countries and is reported in a consistent manner across the European Economic Area.
Source: EIOPA publishes third annual European insurance overview.
HM Treasury published a Review of Solvency II: Call for evidence, to seek views on reforming the
prudential regulation of the UK insurance sector. The call for evidence is the first stage
of the review of Solvency II.
Source: Policy paper: Solvency II review: Call for evidence.
For further information, see: Solvency II—essentials.
The ESRB published a letter from its chair, Christine Lagarde, to the executive vice-president
of the European Commission, Valdis Dombrovskis, setting out the ESRB General Board’s
position on the review of Solvency II. The ESRB concludes that Solvency II has contributed
to making individual insurers safer, but it calls for the review to result in a revised framework
that better reflects macroprudential considerations; a harmonised recovery and resolution framework;
a framework that ensures risks are properly captured; and a framework which addresses lessons
learned from the COVID-19 pandemic. The letter also details five key lessons the ESRB has identified
from the pandemic.
Source: Response letter to a consultation of the European Commission on the review of Solvency II.
The FCA published the declarations made in respect of its business interruption insurance test
case resulting from the coronavirus (COVID-19) lockdown. The FCA will also publish a guide
to the declarations for policyholders, who are encouraged to speak to their insurers and insurance
intermediaries. The FCA has also reiterated that it is continuing discussions with policyholders
and insurers, in parallel with its leapfrog application to appeal the decision of the High
Court to the Supreme Court.
Source: Latest updates: Business interruption insurance.
For further information ,see: Coronavirus (COVID-19)—business interruption insurance.
Anna Sweeney and Charlotte Gerken, both executive directors at PRA Insurance Supervision, and Matt
Brewis, director of the FCA Insurance and Conduct Specialists, have published a Dear CEO letter
to PRA-regulated insurance firms preparing for the end of the Brexit transition period. The
letter emphasises that it is imperative that firms continue to build on their preparatory work
to ensure that they, and to the extent possible their clients, are ready for a range of scenarios
at the end of the transition period. The letter sets out key areas requiring final preparations,
including: contingency planning and continuity of cross-border business in respect of EU liabilities;
Part VII saving provision; data; EEA bank account closures; EEA passporting firms; and TPR
firms’ Part 4A submission timeline.
Insurance Europe (IE) published its response to EIOPAs second insurance stress testing discussion
paper. IE stated any stress test exercise should have clear objectives, appropriate timescales
and be appropriately communicated, and the results should be published at aggregate level only.
Source: Insurers see merit in climate change stress testing, but not EU-wide liquidity or multi-period stress tests.
The Emerging Payments Association (EPA), which promotes collaboration and innovation across
payments, has responded to HM Treasury’s Payments Landscape Review: Call for
evidence. The EPA believes that the government is meeting its objective that UK payments
networks operate for the benefit of end-users, but that more can be done over time
to create an even fairer playing field.
Source: EPA response to HMT Payments Landscape Review.
HM Treasury published a call for evidence setting out the government’s aims for protecting
access to cash throughout the UK. It seeks views on how the government can ensure the
UK maintains an appropriate network of cash withdrawal and deposit-taking facilities
over time through legislation, including the potential role of cashback. The government
wants to further understand the factors affecting cash acceptance, and is seeking industry
views on whether it should give a single regulator overall statutory responsibility
for maintaining access to cash. Feedback is sought by 25 November 2020.
Sources: Press release: Access to cash: Call for evidence and
Access to cash: Call for evidence.
The European Parliament published an ‘at a glance’ briefing on fintech
regulatory sandboxes and innovation hubs, which summarises the September 2020
document ‘Regulatory sandboxes and innovation hubs for fintech: Impact
on innovation, financial stability and supervisory convergence’. The
report and the briefing examine the setting up of regulatory sandboxes and
innovation hubs as part of the overall strategies pursued by jurisdictions
in response to fintech developments.
Sources: Regulatory sandboxes and innovation hubs for fintech and
The Investment Association (IA) opened applications for the fourth cohort of fintech
innovators to join Engine, its specialist accelerator and innovation hub for
the investment management industry. Firms with market-viable technology are
being invited to apply for the six-month programme by 11 December 2020.
Source: Investment Association’s fintech hub opens search for new engine cohort.
The Loan Market Association (LMA) launched two new guidance documents highlighting
potential applications of the green loan principles (GLP) in the real
estate investment finance context. They include analysis of the key
considerations that lenders and borrowers should take into account
when entering into these types of transactions.
Source: New guidance documents published highlighting potential applications of the GLP in the real estate context.
Insurance Europe (IE) and PensionsEurope published responses to a survey
by the European Supervisory Authorities (ESAs) on proposals for mandatory
disclosure templates of pre-contractual and periodic disclosures for
products that ‘promote’ environmental, social and governance
(ESG) characteristics and products with sustainability objectives under
the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (SFDR).
Sources: ESAs’ proposals for ES disclosure templates would not improve transparency for consumers and
PensionsEurope’s response to ESAs' survey on templates for ESG product disclosures.
Executive Director for Markets at the BoE, Andrew Hauser, noted the role
capital markets, including asset managers, have to play in tackling
climate change. In a speech delivered to the Investment Association
on 16 October 2020, Hauser detailed the three main ways to build more
effective capital markets infrastructure, namely, climate disclosure,
climate-linked capital instruments and climate-focused asset allocation
Source: From hot air to cold hard facts: how financial markets are finally getting a grip on how to price climate risk and return – and what needs to happen next - speech by Andrew Hauser.
The Association for Financial Markets in Europe (AFME) and ISDA published
a joint response to the ECB Guide on Climate and Environmental risks.
AFME and ISDA note, amongst other things, that the ECB has, for the
second year in a row, identified climate-related and environmental
risks as a key risk driver in the Single Supervisory Mechanism Risk
Map for the euro area banking system.
Source: ECB Guide on Climate and Environmental risks—AFME and ISDA response (general comments) September 2020.
The co-chair of the Task Force on Climate-related Financial Risks (TFCR)
of the Basel Committee on Banking Supervision, Kevin J Stiroh, has
given a speech at a panel session on the new regulatory and policy
landscape for sustainable finance, at the 2020 IIF Annual Membership
Meeting, 14 October 2020.
Source: The Basel Committee’s initiatives on climate-related financial risks.
The City of London Law Society (CLLS) published a paper prepared by a joint
working party of the company law committees of the CLLS and the Law
Society of England and Wales in response to the FCA’s consultation
paper CP20/3: Proposals to enhance climate-related disclosures by listed
issuers and clarification of existing disclosure obligations.
Source: City of London Law Society Company Law Committee: FCA consultation paper CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligation.
23 October 2020
Banks and mutuals
Deadline for responses to the PRA’s consultation
paper (CP10/20): ‘Simplified obligations for recovery planning’.
This sets out proposed changes to supervisory statement
SS9/17 ‘Recovery planning’, which will
simplify and reduce certain firms’ obligations
under the Bank Recovery and Resolution Directive
2014/59/EU (BRRD) (Simplified obligations).
Deadline for responses to the EBA’s consultation paper (EBA/CP/2020/14) on
draft regulatory technical standards (RTS) under Article
390(9) of Regulation (EU) 575/2013 (CRR),
as amended by Regulation (EU) 2019/876 (CRR II).
The draft RTS specify how institutions should determine
indirect credit exposures to underlying clients
of derivatives and credit default derivatives.
25 October 2020
Fintech and cryptoassets
Deadline for responses to HM Treasury consultation on
its proposal to bring certain cryptoassets into
the scope of financial promotions regulation.
Deadline for responses to HM Treasury consultation on
its proposals to establish a regulatory ‘gateway’
through which authorised firms must pass before
they can approve the financial promotions of unauthorised
26 October 2020
Deadline for responses to IOSCO’s consultation on
proposed guidance that member jurisdictions may
consider adopting to address the conduct risks
associated with the development, testing and deployment
of artificial intelligence (AI) and machine learning
(ML) by market intermediaries and asset managers.
The Proceeds of Crime Act 2002 (References
to Financial Investigators) (Amendment) (England
and Wales) Order 2020 comes into force.
27 October 2020
Regulation of benchmarks and IBOR reform
The BoE published a joint statement with
the FCA which states that, following close engagement
with market participants, the FCA and BoE support
and encourage liquidity providers in the sterling
swaps market to adopt new quoting conventions for
inter-dealer trading based on SONIA instead of
LIBOR from 27 October 2020.
28 October 2020
Regulation of derivatives
The European Union Agency for the Cooperation of Energy
Regulators (ACER) launched a call for experts to
form a new consultative expert group on wholesale
energy market trading. Applications are invited
by 28 October 2020.
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