PRA is consulting on further proposed changes to its rules, supervisory statements and statements of policy to implement elements of CRD V, and also to make changes to the UK framework to take account of parts of CRR II...
Author - Jonny Williams
Jonny Williams
PRA consults on IRB approach to UK mortgage risk weights
PRA is consulting on rule changes to address the prudential risks that stem from inappropriately low IRB mortgage risk weights. A by-product of the proposals would also narrow the differentials between IRB and...
PRA consults on pre-Brexit changes
BoE and PRA have issued a consultation on changes to its rules before the end of the transition period. The paper covers: an update on the use of BoE and PRA’s intended use of the temporary transitional power;...
EBA phases out repayment moratoria guidelines
EBA has decided to go ahead with its plan to phase out its Guidelines on legislative and non-legislative payment moratoria from the end of September. It says the Guidelines have provided the necessary flexibility, and...
PRA publishes proprietary trading review
PRA has published a report required by law that looks at the extent of proprietary trading by deposit takers and dual-authorised investment firms. The report looks at: the extent of trading; the risks trading poses to...
EBA wants clarity on aspects of “credit institution” definition
EBA has published an Opinion noting its views that several aspects of the current definition of “credit institution” could benefit from clarification – not least the notions of “deposit”...
FCA sets up LIBOR transition page
FCA has created a new page on its website, telling firms what they need to know about LIBOR transition. The page focuses on balance sheet exposure and how affected firms can move their LIBOR-linked contracts to...
UK Finance updates LIBOR guide for businesses
UK Finance has published a guide for business customers on the discontinuation of LIBOR. The guide explains: the anticipated discontinuation of LIBOR and why LIBOR is being discontinued; and what customers should be...
PSR publishes interim report on card acquiring services
PSR has published its interim report with provisional findings on the supply of card-acquiring services. It says merchants should shop around to get a better deal from their provider or switch to a new one, but that...
BoE updates on LIBOR transition
The Bank of England has updated its website on the transition from LIBOR, and what it is doing to catalyse using SONIA as the primary interest rate benchmark in sterling markets. The Working Group on Sterling Risk-Free...
BoE released updated financial stability information
BoE has published: a summary of the latest meeting of the Financial Policy Committee, which looked at how the UK financial system has performed during the pandemic. It notes how the system has met the initial surge in...
Basel consults on operational risk and resilience
The Basel Committee is consulting on proposals for principles for operational resilience and updates to its principles for the sound management of operational risk. The updates will reflect the growth of technology...
FCA recognises LSB update
FCA has confirmed it is maintaining its formal recognition for the LSB’s Standards of Lending Practice for business customers, and that the recognition now covers the recent updates to take account of CBILS and...
FCA speaks on challenges of LIBOR transition
Edwin Schooling Matter, FCA’s director of markets and wholesale policy, has spoken at ISDA’s event on LIBOR transition. He stressed that the time to act is now, as the next 4-6 months are critical. ISDA is...
FCA consults on Remuneration Code
FCA is consulting on proposals to update its Dual-Regulated firms Remuneration Code and guidance as part of CRD V implementation. The consultation largely follows PRA’s and proposes: changes to SYSC 19D in respect...
PRA consults on CRD V
PRA is consulting on changes to its rules, supervisory statements and statements of policy needed to implement parts of CRD V. This consultation is the first part of PRA’s preparation for implementation, and it...
BBLS unfair relationships exemption confirmed in law
The Business and Planning Act 2020 got Royal Assent on 20 July. Among wider provisions designed to address issued related to Covid-19, s12 of the Act provides that no order under s140B of the Consumer Credit Act...
Government extends 3rd country benchmark transition
Treasury has published a policy paper explaining why it is extending the transitional period for third country benchmarks to 31 December 2025. The extension will allow UK supervised entities to carry on using these...
PRA consults on approach to non-systemic banks
PRA is consulting on its approach to new and growing, non-systemic banks. It is making 2 new proposals, and taking the opportunity to clarify its position in other areas. The new proposals are: changes to the...
Treasury gives CRR guidance
Treasury has published guidance on how CRR2 applies during the transition period. It has already made regulations under the Withdrawal Act to “onshore” CRR as amended by CRR2 after the end of the transition...
Treasury consults on CRDV, prudential regime and Brexit
Treasury is consulting on the UK’s approach to implementation of those parts of CRD V that fall to be implemented into national law by 28 December. The Government has long said that it will transpose all EU...
BoE speech on LIBOR: Entering the Endgame
On 13 July Andrew Bailey, Governor of the Bank of England (“BoE“), made a speech on the continued importance of the transition away from LIBOR. The continued importance of the transition In Mr Bailey’s...
International bodies concerned about LIBOR transition
A report published today by the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (BCBS) has raised concerns about the apparent lack of commitment of financial markets to move away from...
PRA makes statement on LIBOR and resolution rules
PRA has made a statement outlining its view on the implications of LIBOR transition for contracts in scope of the Contractual Recognition of Bail-In (CROB) and Stay in Resolution (Stays) parts of its Rulebook. PRA...
EBA clarified COVID-19 prudential measures
EBA has published a report clarifying how certain parts of prudential regulation apply in the light of COVID-19. It says several issues have been drawn to its attention in relation to the effects of payment moratoria...
FCA confirms open-access trading extension
FCA has confirmed that the agreed extension to the deadline for applying the open access rules of MiFIR to trading venues and CCPs that offer trading and clearing of exchange-traded derivatives will apply equally in the...
CMA reports on SME banking behavioural undertaking compliance
The CMA has published its annual report on whether 8 UK banks are complying with the undertakings they gave in 2002 not to bundle loans and accounts. CMA found no significant breaches during the last reporting year. ...
FSB comments on benchmark reform and Covid-19
The Financial Stability Board has been monitoring closely the impact of Covid-19 on global benchmark transition. It recognises the challenges, but still thinks that both financial and non-financial sector firms across...
PRA comments on CRR “quick fix”
PRA has made a statement on some aspects of the EU’s “quick fix” to the CRR. The statement notes: PRA’s support (back in 2017) of IFRS 9 transitional arrangements, which the quick fix now...
FCA imposes requirements on Wirecard
FCA has imposed a number of requirements on Wirecard, an authorised EMI which is also subject to the PSRs. As a result of ongoing investigations and actions in Germany involving Wirecard’s parent company, FCA...
EU adopts Covid-19 CRR changes
The EU has adopted temporary rules amending CRR 2 to maximise the ability of banks to lend money during the Covid-19 crisis. The changes: change the minimum capital banks need to hold for NPLs – in particular by...
Basel consults on non-performing loans changes
The Basel Committee is consulting on changes to the capital rules to provide a prudent treatment in respect of securitisations of non-performing loans. It had started to develop these plans before Covid-19 and has now...
FCA comments on planned amendments to the Benchmarks Regulation
The FCA has issued a statement welcoming the Government’s intention to bring forward legislation to amend the Benchmarks Regulation (“BMR“) to give the FCA enhanced powers. The FCA says these could...
Government encourages LIBOR transition amid legislative plans
Rishi Sunak has made a written statement to Parliament on the Government’s proposals for ensuring LIBOR transition. The statement referenced previous statements that underline the importance of firms migrating...
Treasury consults on BRRD2 implementation
Treasury is consulting on the UK implementation of BRRD2. The implementation date is 28 December 2020, so before the end of the Transitional Period. Treasury proposes to implement all those parts of the Directive that...
Treasury updates on Financial Services Bill prudential intentions
Treasury has provided some detail on the legislative approach it will take on prudential standards in the Financial Services Bill. The statement goes alongside the FCA discussion paper on the prudential regime for...
EBA extends payment moratoria deadline
EBA will extend the application date of its guidelines on payment moratoria to 30 September, as economies gradually re-open. It says the extension will ensure that adequate treatment for borrowers is available across...
FMSB publishes LIBOR transition case studies
The FICC Market Standards Board (FMSB) has published a review on LIBOR transition with case studies to help market participants navigate conduct risks when offering new products to clients or changing performance...
Regulators update firms on revised LIBOR milestones
Since PRA and FCA wrote to the senior manager of banks and insurers responsible for LIBOR transition in January, several of the Working Group milestones discussed in that letter have been changed as a result of Covid-19...
EP votes through Covid-19 lending changes
The European Parliament has approved changes to the CRR to encourage banks to lend to customers affected by Covid-19. Among other things, the changes: extend the transitional arrangements for IFRS 9 by 2 years and...
ESRB gives guidance on distributions
The BoE and PRA have acknowledged the ESRB recommendations on the restriction of distributions during Covid-19. They note the recommendation will apply to the UK throughout the Transition period, and also note that...
Basel publishes new FAQs
The Basel Committee has published a set of new FAQs that it has agreed to add to the framework. The key issues covered are the definition of capital, market risk, counterparty credit risk, liquidity and operational risk.
UK Finance members offer support for commercial landlords
UK Finance says its members are committed to supporting commercial landlords and their tenants who are concerned about their ability to make payments during Covid-19. It urges those concerned to contact their lenders...
PRA publishes FAQs on property valuations
PRA has published a set of Q&A on CRR requirements for property valuations during the disruption caused by Covid-19. Firms have been asking questions on how they shoudl deal with the difficulties in conducting...
EBA publishes loan origination guidelines
EBA has published a set of guidelines on loan origination standards. Its aim is to bring together prudential standards, consumer protection obligations, AML and ESG considerations within one set of guidance. The...
CMA gets £47m refunds on overdraft charges
CMA has announced that over the past 2 years it has secured more than £47m of refunds for customers in respect of overdrafts where banks failed properly to warn them about unarranged overdraft charges. It has now taken...
Corporate Insolvency and Governance Bill 2020
We have summarised the key proposals of the Corporate Insolvency and Governance Bill, published on 20 May.
CRR amending Regulation progresses
The European Parliament is to consider the proposed Regulation amending the CRR in its plenary session on 17-18 June. Meanwhile, the ECB has published its opinion on the proposals, which are aimed at addressing some of...
Banks look at new ways to deal with SME complaints
The Business Banking Resolution Service has carried out a pilot study to look at how disagreements between banks and SME customers could be better addressed. The BBRS has been set up by 7 banks and other stakeholders...
PRA responds on retirement interest-only mortgages and default
PRA has provided its feedback following responses to its consultation on prudential treatment of retirement interest-only mortgages, and on credit risk: probability of default and loss given default estimation. Tt has...
EBF publishes cross-border payment guidance
EBF has published guidance for payment service providers in the form of examples and FAQs on implementation of the Cross-Border Payments Regulation. The guidance comes as EBF members have raised queries about charges...
Regulator Covid-19 update 7 May
On 7 May: PRA announced details of its plans to support firms and enable them and the PRA to focus on the highest priority work: The Climate Biennial Exploratory Scenario is postponed until at least mid-2021; full...
FCA updates on CBILS and BBLS expectations
On 4 May: FCA updated its statement about the CBILS and BBLS confirming that its position that lenders who comply with CBILS do not also have to comply with the creditworthiness rules in CONC 5.2A.4-34 where the...
Regulator Covid-19 update 28 April
On 28 April: FCA updated its guidance on changes to regulatory reporting; and The European Commission has announced a wide-ranging banking package to help banks to lend to support the economy. The package includes:...
Regulator Covid-19 Update 27 April
On 27 April: FCA has clarified the relationship between its rules and the UK’s CBILS and Bounce Back Loan schemes. It notes that, pending the roll-out of the BBL scheme, which, from 4 May, will give small...
How does CLBILS work?
We have written an article on how the Coronavirus Large Business Interruption Loan Scheme works.
Regulator Covid-19 update 23 April
On 23 April: PRA followed up on its letter to insurers, noting that all insurers should consider carefully the previous letter and guidance on use of unrated assets and assessments of creditworthiness, and the...
PRA publishes buffer usage FAQs
PRA has published a set of FAQs on using liquidity and capital buffers in response to the issues caused by Covid-19. The FAQs address what the buffers are, how banks can use them and the implications of them doing so...
PRA publishes Business Plan
PRA has published its Business Plan for 2020/21. Like FCA, PRA comments that Covid-19 has made it reassess its plans and reprioritise its work, and it will continue to assess the effects of the outbreak on its actions...
PRA consults on fees
PRA has published its consultation on fees and levies for 2020/21. The consultation covers: the fee rates to meet the Annual Funding Requirement, which has increased by 8% from the current year, primarily because of...
PSR publishes APP scam thoughts
The PSR has published a summary of a conference call between key players in the payments industry to discuss the progress being made in tackling APP scams. It decided to go ahead with the call, not least as Covid-19 has...
Regulator Covid-19 Update 6 April
On 6 April, the regulators further update their Covid-19 measures: FCA updated its expectations on solo-regulated firms in respect of the SMCR; FCA published a summary of queries it has received on client assets...
FLA gets firms access to CBIL Scheme
FLA has successfully negotiated with the Government to get access for independent and non-bank lenders to the Coronavirus Business Interruption Loan Scheme. It says this was critical to allow firms to continue to run...
Regulator Covid-19 update 1 April
Further updates from the regulators, in addition to FCA’s Dear CEO letter to retail investment firms, include: PRA welcoming the agreement by the boards of large UK banks to suspend dividends and buybacks on...
Chris McLauchlan joins Edinburgh banking team
Chris McLauchlan has been appointed as a Legal Director to lead WBD’s banking team in Scotland. Joining from Eversheds Sutherland, Chris is a senior banking lawyer with over 15 years of experience advising on...
Regulator Covid-19 Update 25 March
On 25 March: Treasury, BoE and FCA have written to the CEOs of UK banks on Covid-19 and bank lending. The letter explains how the Covid Corporate Financing Facility will help firms of investment grade or equivalent...
BoE looks at open platform for SME finance
BoE has published its views on developing an open platform for SME finance. It says that a global identity standard and safe information sharing could harness novel data sources and advanced analytics to provide SMEs...
EBA says no need for LGD on credit insurance claims
EBA has published an Opinion on treatment of credit insurance in the prudential framework. It has previously consulted on credit risk mitigation for institutions that apply the IRB approach with own estimates of Loss...
PRA writes to chairs on board diversity
PRA has written to the chairs of dual regulated firms reinforcing the importance it places on diversity within boards for improving decision making and providing effective challenge. It reminds firms it expects them to...
Commission publishes PRIIPs information test results
The Commission has carried out a project testing the effectiveness of presented information to retail investors within the PRIIPs framework. It sent out 10 different versions of performance scenarios and past...
Government writes to UK Finance on mortgage prisoners
John Glen has written to UK Finance setting out the possibilities for mortgage prisoners to switch deals. FCA data shows that 170,000 borrowers whose mortgages are in closed books or owned by unregulated firms are...
PRA publishes Pillar 2 policy statement
PRA has published its feedback to its consultation on updating the Pillar 2 capital framework in respect of capital buffers, and updated Statements of Policy and Supervisory Statements to include the changes. The...
FSB reports on non-bank financial intermediation
The FSB has published the results of its global monitoring exercise in which it assesses risks and trends from non-bank financial intermediation (NBFI). The annual exercise, which includes data from 29 jurisdictions...
EBA finds “identified staff” RTS working well
EBA has conducted a peer review of how national regulators have applied its RTS on the criteria for identifying staff whose professional activities have a material impact on an institution’s risk profile. The...
UK regulators announce data reforms
The FCA has released its new Data Strategy which outlines plans to develop its data capabilities through a renewed focus on the use of advanced analytics and automation techniques. The FCA hopes this strategy, an...
CCPs deemed equivalence and recognition decisions extended by ESMA and Commission
In the light of the impending putative date for the UK to leave the EU, potentially on the basis of a ‘hard Brexit’, the European securities regulator and the Commission have extended the temporary...
FPC publishes latest Financial Stability Report
In its latest Financial Stability Report, the FPC has published its latest stress testing results and current view on the stability and state of the UK financial system. In addition to its comments on open-ended funds...
FCA calls for input on open finance
FCA has launched a Call for Input on Open Finance. The concept builds on the principles of open banking and extends it to a wider range of products. FCA has a vision that open finance will allow consumers and...
Basel Framework published
BIS has published a consolidated version of the standards prepared by the Basel Committee on Banking Supervision. The resulting Basel Framework pulls together the 14 standards and also includes current, historic and...
EP publishes position on NPLs
The European Parliament has published its draft report on the proposal for a Directive on credit servicers, credit purchasers and the recovery of collateral. The proposal is intended to make sales of non-performing...
FCA endorses SEC no action letter
The FCA has endorsed SEC’s extension of its staff ‘no-action letter’ until 3 July 2023. The no-action letter addresses potential conflicts between US regulation and MiFID 2. MiFID 2 permits investment...
FCA consults on motor finance commission bans
FCA is consulting on changes to its rules that would ban the way in which car retailers and other motor finance brokers receive commission. It is concerned at practices that link commission to the interest rate...
FCA prosecutes for document destruction
FCA has brought its first prosecution for a destruction of documents offence under FSMA. It has prosecuted Konstantin Vishnyak, who it was investigating for suspected insider dealing, for destroying documents which he...
FCA explains views on electoral polling and MAR
FCA has given guidance on how MAR might apply to information gained from electoral polling, and how firms should handle any information that might be inside information. It gives the example of how, if an established...
FRC fines KPMG and individual over CASS reports
The Financial Reporting Council has fined KPMG Audit plc £3.5m (including a 30% reduction for it admitting the misconduct) and one of its (now) partners £52,500, reprimanded them, and imposed a requirement on the firm...
FCA publishes regulatory data transfer agreement
FCA has released the agreement setting out the administrative arrangements for the transfer of personal data between EEA and non-EEA authorities, with its signature page.
BSB publishes Consumer Framework
BSB has published its Consumer Framework designed to show what good banking outcomes look like to consumers. Following consultation feedback, the BSB has made some adjustments to its draft principles and examples of...
FCA updates on London Capital & Finance investigation
Dame Elizabeth Gloster has made an initial announcement on how she plans to conduct the investigation into the regulation of London Capital and Finance plc. An email address has been set up for any communications...
FCA writes Dear CEO letter on harm risks in wealth management
FCA has written to CEOs of wealth management and stockbroking firms setting out its view of the key risks of harm their firms pose to customers and markets. FCA has recently started its 2 year strategy plan on...
FCA announces money laundering conviction in insider dealing link
Reporting restrictions have been lifted such that FCA has finally been able to confirm a conviction it secured against Richard Baldwin in 2017 for dealing in criminal property. The property was related to FCA’s...