Financial services: Regulation tomorrow

Tracks financial services regulatory developments and provides insight and commentary

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EBA issues opinion to address possible infection risk stemming from legacy instruments

October 22, 2020

On 21 October 2020, the European Banking Authority (EBA) issued an opinion to clarify the prudential treatment of the so-called ‘legacy instruments” in view of the end of the grandfathering period on 31 December 2021. In its opinion, the EBA proposes policy options to address the infection risk when created by such instruments. The EBA’s recommendations aim at ensuring a high quality of capital for EU institutions and a consistent application of rules and practices…

Financial services: Regulation tomorrow

Second PRA consultation on implementing CRD V

By Jochen Vester (UK) & Simon Lovegrove (UK)

October 22, 2020

On 20 October 2020, the PRA published Consultation Paper 17/20: Capital Requirements Directive V (CRD V): Further implementation (CP17/20). In CP17/20 the PRA sets out proposed changes to its rules, supervisory statements (SS) and statements of policy (SoP) to implement elements of the Capital Requirements Directive V (CRD V). It also proposes to update aspects of the UK regulatory framework as a result of amendments to the Capital Requirements Regulation (CRR, as amended in CRR…

Financial services: Regulation tomorrow

UK regulators send ‘Dear CEO’ letter to insurers concerning preparations for the end of the transition period

By Laura Hodgson (UK)

October 22, 2020

The two UK financial regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have sent a letter to the chief executives and branch managers of insurance firms in the UK. The letter reminds firms about the end of the transition period in December and the need to be ready for a range of possible scenarios at the end of this period. The letter makes it clear that both regulators expect firms to…

Financial services: Regulation tomorrow

Is it still legal? Lingering uncertainty in securitization of loans and the interest rate that can be charged to borrowers

By Patrick Dolan (US), Kathleen Scott (US) & Nicholas Santangelo (US)

October 21, 2020

In 2015, the US Court of Appeals for the Second Circuit in New York stunned markets when it issued an opinion in Madden v. Midland Funding, LLC that ignored the “valid-when-made” principle of usury law that had been in place for decades. That decision impugned much of the secondary consumer debt market, including credit card securitizations, and has created uncertainty in the market that remains far from settled, even with some recent securitization-friendly court case…

Financial services: Regulation tomorrow

European Commission Work Programme 2021: focus on financial services

By Flupke van den Bogart

October 21, 2020

On 19 October 2020 the European Commission published its Work Programme for 2021. The Work Programme, titled ‘A Union of vitality in a world of fragility’, is the second one published by the Von der Leyen Commission. The Work Programme provides an overview of the legislative priorities of the Commission for the upcoming year, as well as a timeline on when legislative initiatives are intended to be published. Due to the COVID-19 pandemic, the…

Financial services: Regulation tomorrow

Download now | Global operational resilience and COVID-19 survey report

By Jonathan Herbst (UK), Lisa Lee Lewis (UK), John Coley (UK), Etelka Bogardi (HK), Jon Ireland, Kevin Harnisch (US), Desiree Reddy (ZA), Jane E. Caskey, Tim Stewart, Scott Atkins (AU) & Simon Lovegrove (UK)

October 21, 2020

Financial institutions have had to deal with two challenges in the face of the COVID-19 pandemic. The first challenge is financial – how to address and mitigate the sharp drop in the value of financial assets or loss of liquidity. The second challenge is operational – how to address the risk of failure of resources and have clear, robust and dynamic plans in place to deliver consistent services to customers and other stakeholders. Over the…

Financial services: Regulation tomorrow

HM Treasury consults on phase II of the financial services future regulatory framework review

By Simon Lovegrove (UK)

October 20, 2020

On 19 October 2020, HM Treasury issued phase II of its consultation on the financial services future regulatory framework review. Phase I of the review looked at coordination between the UK authorities that have responsibility for the regulation of, and policy for, the financial services sector. HM Government published its response on 11 March 2020, announcing that it and the UK financial services regulators were creating a Financial Services Regulatory Initiatives Grid to help firms…

Financial services: Regulation tomorrow

October 40 Minute Briefing recording – Learning lessons: Proactive governance in the autumn

By Katie Stephen (UK), John Coley (UK), Sonya Zywko (UK) & Iain Hawthorn

October 20, 2020

The recording from the October 40 Minute Briefing, Learning lessons: Proactive governance in the autumn, is now available here. In the October edition of the webinar we focussed on “lessons learned” reviews, examining how such reviews can be successfully conducted so that they are valuable exercises. The webinar also considered skilled persons reviews, focussing in particular on the common pitfalls into which businesses may fall.…

Financial services: Regulation tomorrow

ESMA consults on RTS related to EMIR 2.2

By Hannah McAslan (UK)

October 20, 2020

On 19 October 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper regarding the technical standards on conditions which require an extension of authorisation for a central counterparty (CCP), conditions which require validations of a CCP’s changes to models and parameters by a Member State competent authority (NCA) and ESMA and the procedure for consulting the college on whether or not those conditions are met. The legislative background to the consultation paper…

Financial services: Regulation tomorrow

FSB final report – Effective practices for cyber incident response and recovery

By Simon Lovegrove (UK)

October 20, 2020

On 19 October 2020, the Financial Stability Board (FSB) published a toolkit of effective practices for financial institutions’ cyber incident response and recovery (CIRR). The toolkit draws on the feedback from a public consultation process, including four virtual outreach meetings. The report was delivered to G20 Finance Ministers and Central Bank Governors for their October meeting. The toolkit includes 49 practices for effective CIRR across seven components: (i) governance, (ii) planning and preparation, (iii) analysis,…

Financial services: Regulation tomorrow

Tracks financial services regulatory developments and provides insight and commentary

EBA issues opinion to address possible infection risk stemming from legacy instruments

Second PRA consultation on implementing CRD V

UK regulators send ‘Dear CEO’ letter to insurers concerning preparations for the end of the transition period

Is it still legal? Lingering uncertainty in securitization of loans and the interest rate that can be charged to borrowers

European Commission Work Programme 2021: focus on financial services

Download now | Global operational resilience and COVID-19 survey report

HM Treasury consults on phase II of the financial services future regulatory framework review

October 40 Minute Briefing recording – Learning lessons: Proactive governance in the autumn

ESMA consults on RTS related to EMIR 2.2

FSB final report – Effective practices for cyber incident response and recovery

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