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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) launched a consultation (CP20/16) on the rates at which it proposes to charge levies for additional funding for the Money and Pensions Service (MaPS) and the devolved authorities so they can meet an increase
in demand for debt advice in 2020/21 due to the COVID-19 pandemic. The consultation closes on 30 September 2020.
Source: CP20/16: Debt advice levy rates for 2020/21 – additional funding .
The FCA launched a consultation on guidance for firms to help their customers identify the quickest and easiest options to claim for cancelled travel or plans due to the COVID-19 pandemic. The guidance is aimed at credit and debit card firms,
as well as insurance providers and consumer organisations, providing them with assistance on how to handle enquiries and claims in a ‘reasonable timescale, fairly and in a way that minimises inconvenience to the consumer’. The
consultation closes on 13 August 2020.
Source: Cancellations and refunds: helping consumers with rights and routes to refunds.
The Council of the EU published an opinion, given by its European Economic and Social Committee (EESC), on the European Commission’s new proposal for a regulation establishing the InvestEU Programme and on its proposal for a regulation amending
Regulation (EU) 2015/1017 as regards the creation of a Solvency Support Instrument (SSI). Both regulations were proposed in response to the COVID-19 pandemic.
Source: OPINION European Economic and Social Committee - Proposal for a regulation of the European Parliament and of the Council establishing the InvestEU Programme [COM(2020) 403 final – 2020/0108 (COD)] - Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2015/1017 as regards creation of a Solvency Support Instrument [COM(2020) 404 final – 2020/0106 (COD)].
HM Treasury announced that more businesses will benefit from the Coronavirus Business Interruption Loan Scheme (CBILS) due to changes to state aid rules following UK government and industry lobbying. Previously businesses classed as 'undertakings
in difficulty' (those with high levels of debt and accumulated losses) were unable to access the funding because of restrictions in the EU’s Temporary State Aid Framework. From today, businesses classed in this category that have less
than 50 employees and a turnover of less than £9m can apply to CBILS. In addition, the Economic Secretary to the Treasury, John Glen MP, and the Small Business Minister, Paul Scully MP, have written to the Chair of UK Finance, Bob Wigley,
highlighting their expectations that these changes are implemented to ensure more businesses are receiving financial support.
Source: More businesses set to benefit from government loan scheme.
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The Secondary Legislation Scrutiny Committee (SLSC) published correspondence with the Leader of the House of Commons, Jacob Rees Mogg, following its request for clarification on the anticipated flow and volume of Brexit SIs to be introduced in the
UK Parliament before the end of the transition/implementation period (IP completion day). The government expects to lay approximately 250-300 more Brexit SIs before the end of December 2020. Approximately half of those SIs will be subject to the
affirmative procedure, with volumes 'likely to be concentrated' in September and October 2020.
Source: Secondary Legislation Scrutiny Committee—24th Report of Session 2019–21: Appendix 2.
The House of Commons Library published a briefing looking at the status of negotiations on the future UK-EU relationship, following intensified talks and negotiating rounds held in June and July 2020. It looks at the negotiating timeline, following
the recent announcement of further talks, and examines the prospects and process for finalising a deal by the end of the transition period on 31 December 2020.
Source: UK-EU future relationship negotiations update: is an agreement possible?
For further information, see: Financial Services passporting, equivalence and the UK post-Brexit.
The Prudential Regulation Authority (PRA) published Consultation Paper CP12/20 Capital Requirements Directive V (CRD V) (CP12/20), in which it consults on the implementation in the UK of elements of the Capital Requirements Directive (EU) 2019/878 (CRD
V). The consultation closes on 30 September 2020.
Source: Capital Requirements Directive V (CRD V).
For further information, see: Impact of Brexit: CRR and prudential regulation—quick guide.
HM Treasury announced that it will soon bring forward legislation to ensure the FCA has the relevant powers to enable a well-functioning securitisation regime following the end of the Brexit transition period. This legislation will cover securitisation
repository registration arrangements under the UK Securitisation Regulation. It is intended to assist the FCA when considering draft applications for registration from prospective securitisation repositories prior to the end of the Brexit transition
Source: Securitisation repository application arrangements under the UK Securitisation Regulation .
For further information, see: Impact of Brexit: Securitisation Regulation—quick guide.
The International Swaps and Derivatives Association (ISDA), alongside the Italian Financial Markets Intermediaries Association (Associazione Intermediari Mercati Finanziari, or ASSOSIM), the Swedish Securities Dealers Association (Svenska Fondhandlareföreningen),
the European Banking Federation and the Danish Securities Dealers Association (Børsmæglerforening Danmark), published a paper responding to concerns about the impact of Brexit on EU and UK firms and their EU and UK clients after IP
completion day. The paper sets out reasons why IP completion day, unless mitigating action is take, will generate a ‘cliff-edge’ change in the EU regulatory requirements that apply to the over-the-counter (OTC) derivatives business,
adversely affecting EU or UK firms and their EU and UK clients.
Source: The Impact of a Cliff-edge Brexit on OTC Derivatives .
The European Securities and Markets Authority (ESMA) published data for the systematic internaliser (SI) quarterly calculations for equity, equity-like instruments, bonds and, for the first time, for other non-equity instruments under the Markets in Financial
Instruments Directive (MiFID II) and Regulation (MiFIR).
Source: ESMA publishes data for the systemic internaliser calculations for equity, equity-like instruments, bonds and other non-equity instruments.
For further information, see: Systematic internalisers.
HM Treasury published a policy paper on amendments to Regulation (EU) 1286/2014 (PRIIPs Regulation), providing an update on HM Treasury’s proposed approach to bringing forward amendments to the onshored PRIIPs Regulation to avoid consumer
harm and provide the appropriate certainty to industry once the UK ceases to be bound by the EU regime. HM Treasury intends to legislate for these amendments when parliamentary time allows.
Source: Amendments to the PRIIPs Regulation.
For further information, see: Packaged Retail and Insurance-based Investment Products (PRIIPs)—essentials.
The European Fund and Asset Management Association (EFAMA) wrote a letter to the European Commission on the draft regulatory technical standards (RTS) for PRIIPs, calling for an immediate extension of the exemption for Undertakings for Collective
Investment in Transferable Securities (UCITS), as well as an urgent Level 1 review of the PRIIPs Regulation. EFAMA maintains that the UCITS Key Investor Information Document (KIID) should not be replaced with a PRIIPs Key Information Document
(KID) before the PRIIPs KID’s flaws are remedied.
Source: PRIIPS – EFAMA calls for urgent Level 1 review and extension of the UCITS exemption .
ESMA launched a call for expressions of interest from prospective candidates wishing to join the Consultative Working Group (CWG) of the ESMA Secondary Markets Standing Committee (SMSC). Members are selected for the CWG for a two-year renewable term and
the current term is due to expire shortly, so ESMA is starting the process to renew its composition. The CWG advises and assists the SMSC on technical standards to be submitted to the European Commission. The deadline for expressing interest is 14
Source: ESMA is seeking secondary market experts to join its consultative working group.
The European Banking Authority (EBA) and ESMA launched a consultation on their revised joint guidelines on the assessment of the suitability of members of the management body and key function holders. In addition, the EBA has launched a consultation
on revised guidelines on internal governance. Both reviews take into account the amendments introduced by CRD V and the Investment Firms Directive (IFD). The consultations close on 31 October 2020.
Sources: EBA and ESMA launch consultation to revise joint guidelines for assessing the suitability of members of the management body and key function holder and
EBA launches consultation to revise its Guidelines on internal governance.
The EBA published its final draft implementing technical standards (ITS) on disclosure and reporting relating to the minimum requirement for own funds and eligible liabilities (MREL) and total loss-absorbing capacity (TLAC). The ITS, which were
developed in accordance with mandates under Regulation (EU) 575/2013 (CRR) and Directive 2014/59/EU (BRRD), are seen as a key milestone in the implementation of the EBA roadmaps on Pillar 3 disclosures and on supervisory
Source: EBA publishes final draft technical standards on disclosure and reporting on MREL and TLAC.
For further information, see: Bank Recovery and Resolution Directive (BRRD)—essentials and
The PRA published Consultation Paper CP12/20 Capital Requirements Directive V (CRD V) (CP12/20), in which it consults on the implementation in the UK of elements of CRD V. The consultation closes on 30 September 2020.
The PRA published information on rules and guidance, options and discretions, supervisory review and evaluation process (SREP), and aggregate statistical data. The PRA is required to publish this information as well as submitting it to the EBA
in accordance with Article 143 of CRD IV and Commission Implementing Regulation 650/2014.
Source: Banking supervisory disclosures: rules and guidance, options and discretions, SREP, and aggregate statistical data.
The Board of Supervisors (BoS) of the EBA agreed on the timeline and sample of the 2021 EU-wide stress test which will be carried out on ‘51 banks, of which 39 will be from the euro area, covering 70% of banking sector in the euro area, each
non-Eurozone Member States and Norway’. The 2021 EU-wide stress test is expected to be launched in late January 2021 and the results are expected to be published late July 2021.
Source: EBA updates on 2021 EU-wide stress test timeline, sample and potential future changes to its framework .
The European Insurance and Occupational Pensions Authority (EIOPA) published its July 2020 Financial Stability Report of the (re)insurance and occupational pensions sector in the European Economic Area. The report states among other things that the
COVID-19 pandemic proved the importance of the Solvency II regulatory framework and that the insurance sector had a ‘solid and comfortable capital buffer (median SCR ratio of 213%) which helped insurers to withstand the initial severe market
shocks experienced with the Covid-19 crisis’ as of the year-end of 2019. However, it notes that ‘a high level of uncertainty on the magnitude of economic disruption increases downside risks going forward.’
Source: EIOPA outlines key financial stability risks of the European insurance and pensions sector.
The FCA published consultation paper CP20/14: ‘Updating the Dual-regulated firms Remuneration Code to reflect CRD V which contains proposals to amend its Dual-regulated firms Remuneration Code and relevant non-Handbook guidance in line with
Source: FCA announces proposals to update Dual-regulated firms Remuneration Code.
For further information, see: Remuneration Code for Dual Regulated Firms.
The FCA issued a statement explaining its view of the risks and benefits of employer salary advance schemes (ESAS) and what employers and employees should consider when using them. ESAS are commonly promoted as an alternative to high cost credit
and have a broadly similar economic effect.
Source: FCA sets out views on employer salary advance schemes.
The Financial Stability Board (FSB) published responses to its April 2020 consultation on effective practices for cyber incident response and recovery, which closed on 20 July 2020. The consultative document provides a toolkit of effective practices
to assist financial institutions before, during and after a cyber incident.
Source: Public responses to consultation on Effective Practices for Cyber Incident Response and Recovery .
The European Ombudsman published a decision in case Q4/2020/MHZ on the right to banking services (including a basic bank account and payment facilities) under the Payments Accounts Directive (2014/92/EU) (PAD) for an individual who is unable
to comply with the provisions of the Fourth EU Anti-Money Laundering Directive ((EU) 2015/849) (MLD4).
Source: Report of the European Ombudsman closing query Q4/2020/MHZ from the Office of the Ombudsman of the Republic of Latvia concerning the right to access basic banking services, such as a basic bank account and payment facilities, notably where an individual is unable to comply with the provisions of the EU Anti-Money Laundering Directive .
The Foreign Secretary, Dominic Raab, welcomed the first set of sanctions under the EU’s cyber sanctions regime. The EU sanctions were directed at nine individuals and organisations from North Korea, China and Russia for their part in ‘state
sponsored...malicious cyber activity’, which targeted democratic institutions, national infrastructure, media outlets and international organisations. The sanctions raise the penalty for engaging in such activities. The UK will continue
to implement the regime at the end of the transition period through its own UK Cyber Sanctions regime, which will allow for travel bans to be imposed on cyber actors and for the assets of such individuals and organisations to be frozen.
Source: Foreign Secretary welcomes first EU sanctions against malicious cyber actors.
As part of its coronavirus (COVID 19) insights series, Life after lockdown, the Lending Standards Board (LSB) has created a training session for registered firms on supporting customers after lockdown. Sharing case studies and key insights from
the LSB’s work, the training aims to provide considerations for firms dealing with potentially vulnerable customers.
Source: Life after lockdown—supporting case studies and guidance notes.
The Chartered Institute for Securities & Investment (CISI) encouraged the UK’s financial planning community to sign up to its Financial Planning Week taking place on 5–11 October 2020. The CISI runs the event annually and encourages
the financial planning community to commit to offering their time and expertise to give consumers a free session either via video call or over the phone. The sessions are confidential and allow consumers to ‘experience first-hand the
life-changing guidance offered by the financial planning profession.’ Financial planners can also get involved in the event by taking part in ‘Ask a Planner’ online sessions and providing talks to local schools about a career
in the financial planning profession.
Source: CISI encourages UK’s financial planning community to sign up to Financial Planning Week 5-11 October to offer consumers a “steadying hand in this year unlike any other” .
The PRA published policy statement PS19/20 setting out its feedback to the responses it received to Consultation Paper CP6/20: Financial Services Compensation Scheme – Temporary High Balances Coverage Extension. It also includes final policy
in the form of amendments to the Depositor Protection Part of the PRA Rulebook (Appendix 1) and the updated Statement of Policy (SoP) ‘Deposit Guarantee Scheme’ (Appendix 2). The policy statement (PS) is relevant to retail financial
consumers who are, or may become, Temporary High Balance (THB) depositors, in addition to the Financial Services Compensation Scheme (FSCS) and to all PRA-authorised deposit takers.
Sources: Financial Services Compensation Scheme – Temporary High Balance Coverage Extension, PS19/20 'Financial Services Compensation Scheme - Temporary High Balances Coverage Extension' and Deposit Guarantee Scheme.
The FCA updated its statement about how firms should handle complaints during the coronavirus pandemic. The regulator says it knows that COVID-19 and the associated public health measures are causing many firms serious practical challenges, including
in their operations dealing with consumer complaints. This statement therefore clarifies the FCA’s position on complaint handling in the current circumstances. The FCA first published the statement on 1 May 2020 and reviewed it at the
end of July 2020. The regulator has re-published it with some minor additions and revisions. The FCA intends to review this statement again by the end of October 2020 at the latest.
Source: Firm handling of complaints during coronavirus.
The Complaints Commissioner upheld a complaint against the FCA regarding the unauthorised use of footage of an individual and their two children in a video about vulnerability that appeared on the FCA’s website. The FCA accepted the Commissioner’s
criticisms and recommendations and made a formal apology, together with an ex gratia payment.
Sources: Final report by the Complaints Commissioner: Complaint number FCA00741 and
The FCA’s response to the Complaints Commissioner’s Report FCA00741.
Better Finance announced that its German member organisation, Deutsche Schutzverein für Wertpapiersitz (DSW), published a series of Q&As for duped individual investors and pension savers in light of the Wirecard AG scandal and the accompanying,
corporate governance, external auditing and supervisory failures.
Source: Q&A Catalogue for Wirecard Investors.
Director of Markets and Wholesale Policy at the FCA, Edwin Schooling Latter, gave a speech at a webinar hosted by ISDA, concerning the tasks ahead in relation to the LIBOR transition during the second half of 2020.
Source: LIBOR transition – the critical tasks ahead of us in the second half of 2020.
For further information, see: LIBOR transition.
The Investment Association (IA) and EY published a joint report: ‘TIME TO ACT NOW - LIBOR transition for investment managers’. It sets out practical steps investment managers should take in connection with the switch from LIBOR
to SONIA and other risk-free rates.
Source: BUY-SIDE MAKES SIGNIFICANT PROGRESS IN LIBOR SWITCH.
On 10 June 2020, ESMA renewed its decision to temporarily lower the notification thresholds for net short positions to 0.1% of the issued share capital. This decision ((EU) 2020/1123) has now been published in the Official Journal. The decision
took effect on 17 June 2020 and applies for a period of three months from this date.
Source: European Securities and Markets Authority Decision (EU) 2020/1123 of 10 June 2020 renewing the temporary requirement to natural or legal persons who have net short positions to temporarily 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
The FICC Markets Standards Board (FMSB) published a spotlight review on the current and future challenges fixed income, commodities and currencies (FICC) market participants encounter in market surveillance. The two main challenges considered
are firstly, data quality and availability, and secondly, the increasing sophistication of trading strategies and technologies used to support them. The FMSB believes the review will be helpful to a broad audience across financial institutions,
such as those managing conduct risk, compliance, surveillance and those working on the application of machine learning.
Sources: FMSB publishes Spotlight Review on monitoring FICC markets and the impact of machine learning and Monitoring FICC markets and the impact of machine learning.
Better Finance, the representative of EU citizens as users of financial services, expressed its disappointment with the European Commission’s ‘capital market recovery package’, which aims to make it easier for capital markets
to support European businesses following the COVID-19 pandemic, because it proposes a reduction in investor protection levels. While Better Finance ‘sympathises with the need for temporary measures’, it believes the proposed
changes ‘put individual investors at risk and erode their trust in capital markets once more’. Moreover, the recovery package includes no ‘counterbalance’ to the reduction in investor protection.
Source: The EU Capital Markets Recovery Package should take Individual Investors and the Wirecard case into account.
The European Commission announced that it is inviting applications for membership of the Technical Expert Stakeholder Group (TESG) on Small and Medium-sized Enterprises (SMEs). The TESG aims to bring together relevant stakeholders to monitor
and assess the functioning of the SME growth markets, and to provide expertise and input on other areas of SME access to public markets. The deadline for applications is 15 September 2020.
Source: The Commission is inviting applications with a view to selecting members of the Technical Expert Stakeholder Group on SMEs (TESG).
CCP12, the global association of central counterparties (CCPs), published ‘Primer on Credit Stress Testing – A CCP12 White Paper’, the second instalment in its series of white papers providing ‘informative and educational
background information’ on central counterparties (CCPs). The paper introduces the role and objective of credit stress testing in the context of a CCP’s overall risk management approach, gives a conceptual overview, sets out
the regulatory expectations of a CCP’s credit stress testing framework, discusses the different approaches to stress testing and describes the independent review and validation of stress testing.
Source: PRESS RELEASE: CCP12 PUBLISHES PRIMER ON CREDIT STRESS TESTING.
ISDA published a paper reviewing non-default losses (NDL) at CCPs, covering who should pay for specific types of losses. In addition, the paper provides an analysis of several resolution tools for NDL within the context of a simplified CCP
balance sheet. The paper makes many considerations, including what an NDL is, how it can be allocated, and when clearing members should bear some of the sustained loss.
Source: CCP Non-Default Losses.
ISDA, the Futures Industry Association (FIA) and the Institute of International Finance (IIF) collectively responded to the Financial Stability Board’s (FSB) consultation on CCPs’ resources in resolution. In their general comments,
the associations ‘welcome the work the FSB have done with this consultation paper in seeking to provide more detailed guidance on CCP resolution which would advance financial stability…[and] support the focus on systemic risk
and agree with the need to ensure taxpayers are not impacted’.
Source: ISDA, FIA and IIF Respond to FSB’s Consultation on CCP Resources in Resolution.
The World Federation of Exchanges (WFE) called for a ‘careful and considered approach’ to the treatment of CCP equity in any change to the resolution arrangements for CCP’s. The global industry group for CCP’s and exchanges
believes that ‘upsetting the tried and tested balance of incentives’ could negatively affect stability and increase systemic risk. The WFE’s comments follow on from the FSB’s consultation on the treatment of CCP
equity in resolution, adding too that ‘resolution measures should be considered in conjunction with incentives for market participants to participate effectively in any default management and recovery process’.
Source: The World Federation Of Exchanges calls for considered approach to treatment of CCP equity in resolution.
ISDA has asked Allen & Overy to produce a memorandum considering the type and nature of loss to which the equity of EEA CCP could be exposed on a CCP resolution based on the European Commission’s proposal for a regulation on a framework
for the recovery and resolution of CCPs and in particular, whether CCP equity would be expected to be written down whenever a resolution occurs.
Source: A&O Memorandum on CCP Equity and No-Creditor-Worse-Off .
ISDA released the informal comments of its chief executive Scott O’Malia on the subject of important OTC derivatives issues in derivatiViews. In his comments, O’Malia discusses the new package of measures agreed by the Council
of the European Union and the European Parliament, which O’Malia believes ‘strikes a good balance between the positions of the two legislative bodies, and includes a number of critical safeguards’.
Source: A Step Forward in CCP Safety.
ESMA withdrew the trade repository (TR) registration of NEX Abide Trade Repository AB (NATR). This follows the official notification to ESMA by NATR of its intention to renounce its registration as a TR.
Source: ESMA withdraws registration of NEX Abide Trade Repository AB.
ISDA released its updated OTC Derivatives Compliance Calendar. The Calendar sets out compliance deadlines and regulatory dates that the ISDA believes important in the over-the-counter (OTC) derivatives space.
Source: Updated OTC Derivatives Compliance Calendar.
The FCA launched consultation paper CP20/15: Liquidity mismatch in authorised open-ended property funds, containing proposals to decrease the potential harm to investors from the liquidity mismatch in open-ended property funds. The proposals
introduce new rules which would require investors to give notice, of up to potentially 180 days, before their investment is redeemed. The FCA is seeking feedback on its proposals and any suggestions for alternative measures. The deadline
for feedback is 3 November 2020. The FCA aims to publish a policy statement with final rules as soon as possible in 2021.
Sources: FCA consults on new rules to improve open-ended property fund structures, CP20/15: Liquidity mismatch in authorised open-ended property funds and Liquidity mismatch in authorised open-ended property funds.
The International Capital Market Association (ICMA) published an update on the enforceability of close-out netting in the People’s Republic of China (PRC). The update refers to the consultation draft of a ‘Notice on Issues Relating
to the Rules for the Measurement of Default Risk Assets of Counterparties in the Trading of Derivatives,’ which was launched by the China Banking and Insurance Regulatory Commission (CBIRC) earlier in 2020. According to ICMA, the notice
could have an impact on the industry opinion obtained by ICMA on the Global Master Repurchase Agreement (GMRA) for the PRC.
Source: Update on netting enforceability in the People's Republic of China .
The European Commission published a communication to the European Parliament endorsing the Council of the EU’s positions at first reading on a regulation on European crowdfunding service providers for business and a directive amending MiFID
Source: COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT.
For further information, see: The regulation of crowdfunding platforms.
The European Parliament adopted the text of the annual report on the banking union for 2019. The report notes that progress has been made, but says further progress has to be made on risk sharing and also on risk reduction in order to tackle
challenges that remain in specific institutions.
Source: Text adopted: Banking union—annual report 2019.
The LSB updated the Standards of Lending Practice for business customers to take account of the UK government’s Coronavirus Business Interruption Loans Scheme (CBILS) and Bounce Back Loan Scheme (BBLS). The FCA agreed to maintain its
recognition of the standards and the changes that have been made.
Sources: Update to the Standards of Lending Practice for business customers - Coronavirus Business Interruption Loans Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) and
FS20/1: Recognition of codes: feedback on QCP 25 CP19/27 (update) .
The FCA is asking for early views on its temporary guidance to firms on providing payment deferrals for mortgage and consumer credit products, which, at present, will remain in effect until 31 October 2020. The FCA is keen to find out
from credit and mortgage providers, as well as consumer groups, what support consumers who remain in difficulty may need, whether any aspect of the current guidance should remain in place beyond 31 October 2020, and if not, what other
form of support should takes its place. The deadline for submitting responses is 7 August 2020.
Source: Call for Input: Ongoing support for consumers affected by coronavirus: mortgages and consumer credit.
Commission Implementing Regulation (EU) 2020/1145 of 31 July 2020 laying down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from 30 June 2020 until 29 September 2020
in accordance with the Solvency II Directive published in the Official Journal.
Source: Commission Implementing Regulation (EU) 2020/1145 of 31 July 2020 laying down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from 30 June 2020 until 29 September 2020 in accordance with Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Text with EEA relevance)
For further information, see: Solvency II—essentials.
The PRA launched a consultation (CP11/20) on its proposed expectations and guidance relating to external auditors’ work on the matching adjustment (MA) under Solvency II (Directive 2009/138/EC). The consultation paper includes clarifications
relating to the existing position and also proposes several new PRA expectations that relate to communications by auditors on the subject of the MA. The consultation closes on 30 October 2020.
Source: Solvency II: The PRA’s expectations for the work of external auditors on the matching adjustment.
EIOPA announced the launch of its first Single Rulebook. This an online tool focused on the Solvency II Directive that enables navigation across different legal acts as well as EIOPA guidelines, recommendations, opinions and supervisory standards.
EIOPA plans to expand the scope of the single rulebook by adding Q&As in the near future.
Source: EIOPA launches its Solvency II Single Rulebook.
Insurance Europe has published its response to ESMA’s call for evidence on the availability and use of credit rating information and data. The response highlights the importance of credit ratings in meeting requirements under the Solvency
II (Directive 2009/138/EC) framework and in reporting to public authorities. Additionally, credit ratings are a vital part of an insurer’s approach to risk management, its investment portfolios and strategy,
and are a key component in helping insurers carry out their core business and activities. The response demonstrates insurers to be dependent on credit rating agencies (CRAs), due to their large and broad investment portfolios.
Sources: European insurers call for free access to credit ratings for internal and regulatory purposes and Response to ESMA call for evidence on credit rating information and data.
The FCA published a statement on data provision under the Civil Liability Act 2018. In the statement, the FCA reminds insurers of the information they are required to provide to it about the effect that changes to the law under the Act
will have on motor insurance premiums. The relevant data must be provided in a single return by 1 October 2023 using a template published by the FCA, to which a link is provided in the statement.
Source: Data Provision under the Civil Liability Act 2018.
In its response to the European Commission’s consultation on its roadmap for the Capital Markets Union (CMU) action plan, Insurance Europe has welcomed the objectives set out in the roadmap and highlighted a number of specific priorities,
including recommendations to address regulatory barriers to long-term and sustainable investment and to improve the participation of retail consumers in the CMU.
Source: European insurers respond to EC roadmap for Capital Markets Union action plan.
Insurance Europe published an insight briefing concerning the European insurance industry’s views on artificial intelligence (AI). The briefing states that insurers are already using and embracing AI ‘to improve customer service,
increase efficiency, provide greater insight into customers’ needs and to prevent fraudulent transactions’. However, there are three challenges insurers are experiencing concerning the maximisation of the benefit for both themselves
and consumers when using AI. Regarding the future, it is predicted that AI will help insurers improve the accuracy of predicting risk and help to use ‘enhanced foresight’ to swiftly deploy new products in response to developing
Sources: New insight briefing: European insurers’ views on artificial intelligence and The European insurance industry’s views on artificial intelligence.
The FCA issued a statement ‘on non-damage business interruption (BI) settlements and deductions in relation to government support’. In the statement, the FCA acknowledges policyholder concerns regarding how insurers are calculating
non-damage BI claim payments where liability has been agreed. The FCA confirms that where insurers have accepted liability, they should continue to handle and access non-damage BI claims ‘promptly and fairly, and to treat their customers
fairly in accordance with Principle 6’. The statement also notes that the FCA is waiting for the High Court judgment on the test trial case.
Source: Statement on non-damage BI settlements and deductions in relation to government support.
The Pensions and Lifetime Savings Association (PLSA) published guidance to help defined benefit and defined contribution pension scheme trustees navigate the new requirements to publicly disclose their investment and responsible investment activity
over the previous year in an “Implementation Statement”.
Source: PLSA launches guide on new trustee investment disclosure duties.
Head of Policy at the Payment Systems Regulator (PSR), Genevieve Marjoribanks, issued a statement on ‘driving innovation and competition in real-time payments’. The statement highlights that the PSR wants consumers to have ‘great
choice’ when making payments, including access to real-time payment services, and that the best way to deliver this is through competition and innovation. The PSR is aiming to develop new ways of driving this competition and innovation
in interbank payments, while also ensuring they serve the best interests of its users. To do this, the PSR is analysing the consumer protections which are currently available and will be working with industry to ensure their concerns and
ideas are included in their assessment.
Source: Consumer protection: Driving innovation and competition in real-time payment.
The Bank of England (BoE) announced that it has appointed Accenture as the Technology Delivery Partner for the Real Time Gross Settlement (RTGS) Service Renewal Programme. The BoE will work alongside Accenture to develop and build a new ‘world
class payments service’.
Source: The Bank of England appoints Accenture as the Technology Delivery Partner for the Real Time Gross Settlement Service Renewal Programme.
The PSR published a factsheet which provides a quick reference guide to the regulator’s Access to Cash work. The factsheet sets out how people access their cash, the decline in cash usage and the rise in digital payment methods over
a number of years
Source: Access to cash factsheet - July 2020.
The Bank for International Settlements Innovation Hub (BISIH) centre in Hong Kong SAR and the Hong Kong Monetary Authority (HKMA) launched the ‘TechChallenge - Digitising Trade Finance’ initiative, a competition which aims to demonstrate
the potential for new technologies to enhance and safeguard trade finance mechanisms. The competition invites firms to submit ‘innovative solutions’ which address TradeTech operational challenges. Firms who develop successful
responses will be awarded financial sponsorship. The solutions will be judged by a panel representing the public and private sectors from the partnering organisation. The deadline for submissions is 31 August 2020. The top solutions will
be announced at Hong Kong Fintech Week in November 2020.
Source: BIS Innovation Hub and HKMA invite global innovators to participate in a trade finance digitisation TechChallenge.
ISDA, the International Securities Lending Association (ISLA) and other organisations have written a letter to the FSB, the International Organization of Securities Commissions and the Basel Committee on Banking Supervision confirming their
joint commitment to ‘defining and promoting the development of a digital future for financial markets’.
Source: Joint Association Letter on a Digital Future for Financial Markets.
The Islamic Financial Services Board (IFSB) announced that the eighth edition of its Islamic Financial Services Industry (IFSI) Stability Report 2020 will be launched during its Members and Industry Engagement Session (MIES), which is to be held
via online platform on 6 August 2020 at 15:30 (MYT).
Source: The IFSB to Launch Islamic Financial Services Industry Stability Report 2020 at the Members and Industry Engagement Session (MIES) .
11 August 2020
Banks and mutuals
The PRA published PS17/19 in September 2019, which set out feedback to responses to its consultation paper CP8/19 ‘Supervising international banks: Revision of the Branch Return’ and the PRA’s
final amendments to the PRA Rulebook. PS17/19 is relevant to PRA-supervised branches of international banks and PRA-designated investment firms which are not UK headquartered. Firms will need to submit their first revised return
by no later than 11 August 2020.
Deadline for responses to HM Treasury’s consultation on the UK’s approach to the transposition of the BRRD II.
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