Being better informed: September 2018

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Brexit activity continued over the summer, with HMT publishing four proposed statutory instruments to allow EEA financial services firms to continue their UK activities after Brexit under the Temporary Permissions Regime while they apply for full authorisation. Regulators are also continuing their preparations for Brexit. The FCA issued a Dear CEO letter on cross-border booking arrangements, setting out six principles with which firms’ proposed booking models should comply. Firms expanding their presence in the EU-27 should ensure the FCA is kept informed of, and comfortable with, all proposed changes to legal entity structures and booking models that could impact their presence in the UK.

Elsewhere, regulators and industry bodies have been urging market participants to quicken the pace of transition away from LIBOR to alternative risk-free reference rates. This ongoing development of alternatives to replace LIBOR adds a further complication to BMR users’ preparations for compliance with the BMR, which applies to them in the most part from 1 January 2018. In our feature article this month, we take a look at the steps users need to take to comply with the BMR as this deadline approaches, and how they should manage the impact of the move away from LIBOR.

We expect the pace of regulatory activity to pick up as we move into autumn, with a particular focus on Brexit and the implementation of domestic reforms. On Brexit, the FCA and PRA plan to consult on further details of the Temporary Permissions Regime for EEA firms. In the insurance sector, firms will be focusing on final preparations for the IDD which takes effect on 1 October, while the FCA is due to publish an update on its wholesale insurance brokers market study. Meanwhile banks should look out for papers on the FCA’s strategic review of retail banking business models and its mortgage market study, as well as efforts in the EP to progress the banking package legislation, which includes measures on non-performing loans. And in the asset management sector, firms should keep an eye on the development of the EU’s proposals to review the prudential regime for investment firms, and the progress of new thematic work being undertaken by the FCA.

Download the September 2018 edition of Being better informed to find out more about these and other developments.

Previous editions

Being better informed: May 2018

In April, regulators turned their thoughts to their plans for the financial year ahead. The FCA and PRA published their annual business plans, which are always important documents for firms, as they set out the regulators’ priorities and planned activities for the next 12 months. The FCA focuses on the impact of Brexit and announces a number of new pieces of work such as market studies, while the PRA highlights operational resilience as a top priority. In our feature article this month, we take an in-depth look at how the FCA and PRA’s plans are set to impact firms.

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