Brexit is a big deal. Unwinding the current EU directives and regulations from the UK financial services framework is going to take time and there is a real danger of missing something that is important to your firm, sector, or geographical spread. FSTP are trying, through this series of articles, to give an overview of the changes that you might need to consider.
Obviously, there is no substitute for your own horizon scanning/ upstream risk exercises, but hopefully this might pick up on some points of interest that have passed you by. As always, if you’d like more information, speak to your usual FSTP contact or drop us a line here.
In this article, we’d like to focus on the introduction of the new Financial Services Bill that was introduced to Parliament last Wednesday as well as the ‘Dear CEO’ letter sent by the Bank of England (PRA) and the FCA to the CEOs of insurance companies operating in the UK.
Dear CEO Letter
The PRA and the FCA have followed up on their letter to banks last week with the areas they expect insurance firms to focus on, in the remaining days before final separation from Europe. Mostly these are reminders of previous notification:
- Contingency Planning to ensure ongoing service regarding EU liabilities. (This is a reminder of commitments firms had to make to the PRA previously.)
- Part VII Saving Provision (The two-year period during which a court order sanctioning the transfer of insurance business must already be underway by the end of the transition period.)
- Data Storage and Transfer (With no final decision from the EU on data protection, some suggestions are offered to both UK and EEA firms for short term arrangements until this is finalised.)
- EEA Bank Account Closures (A reminder to contact EEA customers that may be affected by the closure of accounts held by a UK bank, resulting in loss of cover or service.)
- EEA Passporting Firms (A prompt regarding the Temporary Permissions Regime and the need to be operationally prepared for the additional regulatory requirements in 2021.)
- Everything Else! (Aside from a point about communicating with drivers and the need to carry a ‘green card’ in Europe, firms are reminded to read the ‘…extensive information on our websites…’)
The letter is available here
Financial Services Bill
The Financial Services Bill is a step-change in financial regulation in the UK- this entered Parliament last week and will have wide ranging impacts across the sector. Although this at an early stage, you can expect a considerable amount of coverage over the proposed divergence from current processes and frameworks.
Welcomed by the FCA, this is the basis for the Future Regulatory Framework (FRF) and the Solvency II review covered in the previous Brexit Countdown article.
Briefly, the bill covers a range of topics, both domestic and international.
Additional headlines include:
- Amending PRIIPs and UCITS regulations
- Increasing beneficial ownership transparency for trusts, including ‘clarification’ on extra-territorial trust registration.
- Easier processes for removing regulatory authorisation from firms.
- Plans for the introduction of equivalence regimes for retail investment funds domiciled overseas, allowing them access to the UK market.
- A market access route for overseas companies, covered by proposed FCA oversight.
Rumours of Toto Wolff, the team boss of F1 team Mercedes moving to Aston Martin, or staying with an enhanced deal, drag on. In an interview last week, he said that ‘We’re making more progress than the Brexit negotiations’.
Doesn’t look like there’ll be an answer soon, then.