Being better informed: November 2013
October saw the EBA, ESMA and EIOPA release their 2014 work programmes, setting out timelines for work on Level 2 technical advice for key legislative issues - including CRR, Solvency II, MiFID II, UCITS V and PRIPs. But many of these timelines are still at the mercy of the Level 1 texts being agreed between the Council and EP, so we are taking the timelines with a pinch of salt. It all depends on how much the Council and the EP are able to achieve before next spring’s parliamentary elections. In other news:
- The BoE increased the pressure on UK banks when it proposed a new stress testing framework. At the FPC’s request, the BoE plans to publish the results of the stress tests every July, to promote confidence in the UK banking system. The BoE’s new stress testing requirements will be separate from the EBA’s regular stress testing of EU banks. It’s not yet clear how similar the two regulators’ frameworks will be, and whether they will be coordinated in any way.
- UK asset managers breathed a sigh of relief in October when they saw the FCA’s second CRD IV consultation. The FCA has proposed a proportionate approach to the bonus cap, under which it would not apply the cap for the majority of asset managers. The FCA will also allow some firms to continue to comply with CRD III rather than CRD IV – but firms must notify the FCA by 20 November 2013 if they intend to do so.
- UK payments systems will have a new regulator from 2014. The Payment Systems Regulator will be a separate body from but operate under the FCA’s auspices. On the TSC’s recommendation, Parliament has decided to formally regulated payment systems, to address concerns with the market. It believes that having a dedicated, effective regulator will help increase competition and innovation in the market, and help ensure responsiveness to consumers.
- The final EU piece of the AIFMD puzzle fell into place in October when ESMA published its final reporting guidelines. These guidelines clarify how firms should report under AIFMD and when they should start reporting. Many asset managers have started AIFMD preparations, but delayed their preparations for reporting. They will need to get going on that now. We expect the FCA to consult on AIFMD reporting shortly.
- The FCA held its annual asset management conference at the end of October. It signalled a much more collaborative approach to working with asset managers, while giving them a steer on its priorities for the year ahead – see our Hot Topic on the conference.
Finally, consumer credit and peer-to-peer lending were at the top of the EU and FCA agendas in October. The EC published a consultation on crowdfunding and the FCA launched consultations on both its new consumer credit regime and regulating crowdfunding. Our feature article this month considers the FCA proposals and how they will impact consumer credit firms as they come under the FCA’s new regime.