The end of March saw a flurry of activity on operational resilience as the UK regulators published final policy on operational resilience and, for the UK Prudential Regulation Authority (PRA), final rules on outsourcing and third party risk management while the Basel Committee on Banking Supervision (BCBS) issued its new Principles for Operational Resilience and revised Principles for the Sound Management of Operational Risk.
In this blog post, we round-up forthcoming developments in the UK and at EU and International levels in financial services regulation which are expected for March 2020.
** This post was updated on 17 March 2020 to reflect the FCA’s publication of information for firms on Coronavirus (Covid-19) response **
** This post was updated on 17 March 2020 to reflect the FCA’s publication of information for firms on Coronavirus (Covid-19) response and further updated on 23 March 2020 to reflect the Bank of England’s press release regarding supervisory and prudential policy changes **
On 5 December 2019, the Bank of England (BoE), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) released a number of publications on operational resilience, marking the launch of a consultation phase which will inform how the UK authorities seek to embed the consideration of operational resilience into the regulatory framework.
European Commission Vice President Valdis Dombrovskis announced in a speech at the Guildhall in London last week that, ‘as the risk to financial stability has not yet been fully removed, because industry has not so far fully prepared’, he intends to renew the temporary equivalence decision for UK central counterparties (CCPs) beyond the current expiry date of 30 March 2020. No further details of the extension have as yet been published.
The EMIR Refit Regulation was published in the EU Official Journal on 28 May 2019. It is intended to amend EMIR to simplify certain requirements and reduce costs and burdens on corporates including amending clearing thresholds, reporting obligations and counterparty classification. The legislation will enter into force on 17 June 2019. While various aspects of EMIR Refit have phase-in periods, other elements of EMIR Refit will come into effect immediately. Clients are advised to act quickly to consider whether their obligations under EMIR have changed.
Our briefing (which can be found here) provides a summary of the key changes to clearing and reporting obligations under the new Regulation.