Reform tracker

Take a quick overview of the major changes planned in financial services regulation with the Reform Tracker. Entries are colour-coded to reflect their current status: from blue-sky consultations to imminent implementation. Use the search bar and filters below to narrow your focus by country and sector. Alternatively, use the Regulatory Timeline tool for more information on timetables and deadlines.
  • Blue: No legislative proposal as of yet
  • Green: Legislative proposals published but not yet adopted/finalised
  • Yellow: Legislation in force but main substantial provisions not yet effective
  • Red: Legislation in force and main, substantial provisions now effective
  • Grey: Not proceeding
  • Magenta: No longer updated

Showing 1 - 10 of 55 matches

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  • Subject:
    Solvency II
    Status:
    Solvency II now in effect; Solvency II phasing-in period commenced on 1 April 2015 for supervisory approval processes and decisions related to group supervision; 1 January 2016 was the Solvency II implementation deadline.
    Last updated:
    22/12/2016
    Overview/summary:

    The recast Directive on the taking-up and pursuit of the business of Insurance and Reinsurance (2009/138/EC) (Solvency II) is a major piece of prudential regulation for the EU insurance industry, establishing new EU-wide capital requirements and risk management standards.

    Solvency II implementation had been subject to many delays and set-backs, requiring multiple ‘delaying directives’. The phasing-in period for Solvency II (for supervisory approval processes and decisions related to group supervision) commenced from 1 April 2015. On 1 January 2016 Solvency II entered into force.

    This reform tracker item is no longer updated.

    Publications by date:

     

    17 December 2009 Final text of Solvency II published in OJ.
    19 January 2011 European Commission publishes Omnibus II Directive proposal which extends Solvency II transposition, repeal and implementation dates by two months.
    12 September 2012 Amending Directive, which pushes back implementation dates of Solvency II, adopted.
    1 November 2012 Date by which firms were originally expected to implement the new regime by.
    20 December 2012 EIOPA publishes opinion on Solvency II interim measures and outlines actions national supervisors should be taking in interim period before Solvency II comes into force.
    11 March 2014 European Parliament finally adopts Omnibus II.
    22 May 2014 Omnibus II published in Official Journal of the EU.
    23 May 2014 Omnibus has entered into force.
    August 2014 PRA launches CP16/14 on proposed changes to the PRA’s rules to implement Solvency II as amended by Omnibus II.
    October 2014 PRA launches CP23/14 on Solvency II approvals.
    November 2014 PRA publishes CP24/14.
    17 January 2015 Delegated Regulation (2015/35/EC) that supplements Solvency II was published in the OJ.
    February 2015 EIOPA publishes first set of Solvency II Guidelines in all the EU official languages.
    March 2015 The EC adopted the first set of Solvency II Implementing Regulations laying down implementing technical standards (ITS).
    March 2015 PRA publishes PS2/15 on the new regime for insurers.
    March 2015 FCA publishes PS15/8.
    March 2015 FCA launches joint consultation with PRA CP15/16 on changes to the Approved Persons Regime for Solvency II firms.
     
    1 April 2015
    Solvency II phasing-in period commences.
    April 2015 PRA publishes supervisory statement SS22/15 concerning the application of EIOPA’s Set 1 Guidelines to PRA-authorised firms.
    10 April 2015 PRA launches CP16/15 on consistency of UK generally accepted accounting principles with the Solvency II Directive.
     14 April 2015  EIOPA published an Opinion on internal models.
     5 June 2015 The Commission has adopted its first third country equivalence decisions under Solvency II, publishing the text of delegated acts with regard to Switzerland, Australia, Bermuda, Brazil, Canada, Mexico and the USA.
     19 June 2015  EIOPA has modified the methodology for calculating the relevant risk-free interest rate term structures for Solvency II.
     6 July 2015  EIOPA  published a second set of Solvency II technical standards and guidelines.
     July 2015  EIOPA published a note which stressed the importance of high quality public information and the relevant use of external audit services in relation to Solvency II public disclosures.
    14 September 2015 

     EIOPA issued second set of Solvency II Guidelines.

     

    European Parliament decided not to object to EC's grant of full equivalence to Swiss insurance regulatory regime regarding Solvency II.

     25 September 2015

    Commission Delegated Decision (EU) 2015/1602 of 5 June 2015 on the equivalence of the solvency and prudential regime for insurance and reinsurance undertakings in force in Switzerland based on Articles 172(2), 227(4) and 260(3) of Directive 2009/138/EC of the European Parliament and of the Council.

     

    EIOPA published an Opinion on the group solvency calculation in the context of equivalence.

    29  September 2015 EIOPA published Final report on the identification and calibration of infrastructure investment risk categories.
    27 October 2015  EIOPA  published revised documents related to the Solvency II reporting and disclosure package, including several consultation papers.
     12 November 2015

    The European Commission has adopted a second group of seven Solvency II Implementing Technical Standards (OJ L295).

    ESAs Joint Committee: published draft ITS on credit assessments by External Credit Assessment Institutions (ECAIs) relating to CRR and Solvency II.

     19 November 2015 EIOPA launched a call for evidence regarding the treatment of infrastructure corporates under Solvency II.
    November 2015   Corrigendum to Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).
     9 December 2015 Commission Delegated Decision (EU) 2015/2290 of 12 June 2015 on the provisional equivalence of the solvency regimes in force in Australia, Bermuda, Brazil, Canada, Mexico and the United States and applicable to insurance and reinsurance undertakings with head offices in those countries.
     31 December 2015 The third group of Solvency II Implementing Regulations were published in the Official Journal.
    1 January 2016  Entry into force of Solvency II.
    8 January 2016  EIOPA published  first Solvency II relevant risk-free interest rate term structures to be applied by (re)insurance undertakings in the calculation of their technical provisions with reference to the end of December 2015.

     

    Further past dates are accessible via the news feed on the RegZone Solvency II topic page here.

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  • Subject:
    Packaged Retail and Insurance-based Investment Products (PRIIPs)
    Status:
    Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation (1286/2014) has been adopted but is not yet in force. The European Commission has delayed the entry into force by one year (previously expected to enter into force 31 December 2016). The PRIIPs Regulation and Delegated Regulations apply as of 1 January 2018.
    Last updated:
    02/01/2018
    Overview/summary:

    The Regulation on Key Information Documents for Investment Products (1286/2014) requires that intermediaries provide retail customers with a short, standard form Key Information Document (KID) before they invest in any Packaged retail and insurance-based investment products (PRIIPs, formerly PRIPs).

     

    PRIIPs is a ‘horizontal’ category of products that may take a variety of different forms (including funds, structured deposits, some pensions and insurance products) but which fulfil similar functions: capital accumulation over a medium-to-long term at more than the risk-free rate, where the investor does not hold assets directly but by means of some sort of ‘wrapper’. The Regulation was part of a wider legislative package on such products, also including IDD and UCITS V.

     

    The PRIIPs regulation entered into force on 29 December 2014. The European Commission has delayed the entry into force by one year (previously expected to enter into force on 31 December 2016). This followed on from the European Parliament's rejection of RTS relating to the KID and calls from Member States to postpone the regulation. The European Commission is now working with the ESAs to resubmit the RTS to address some of the concerns raised (certain revised RTS were met with no objection in April 2017). It is estimated that the revised PRIIPs framework should be in place during the first half of 2017 and apply as of 1 January 2018.

    Publications by date:

     

    3 July 2012 Commission publishes proposal for regulation imposing KID requirement.
    22 October 2013 ECON voted on Parliament's report and approved proposed Regulation.
    20 November 2013 European Parliament voted to adopt amendments to legislative proposal for a Regulation on KIDs for PRIPs.
    4 April 2014 Political agreement announced on PRIPS (now known as 'PRIIPs', but with a similar scope as before).
    9 December 2014 Regulation No 1286/2014 (PRIIPS) published in the Official Journal to enter into force 20 days after publication (29 December 2014).
    13 December 2014  A corrigendum to the text of the PRIIPS KID Regulation was published in the OJ correcting the date in Article 8(5) regarding the date by which the ESAs must submit the draft regulatory technical standards to the Commission (from 31 March 2015 to 31 March 2016).
    23 June 2015 The European Supervisory Authorities published a technical discussion paper on risk, performance scenarios and cost disclosures for KIDs for PRIIPS.
    3 July 2015 EIOPA delivered its technical advice on criteria and factors to be taken into account in applying product intervention powers under the PRIIPS regulation to the European Commission.
    20 August 2015 The European Supervisory Authorities (EBA/EIOPA/ESMA) published responses to the technical discussion paper on risks, performance scenarios and cost disclosures on KIDs for PRIIPS.
    14 September 2015 Steven Maijoor, Chair of ESMA, delivered a statement to ECON in which he updated the committee on the work being done on the regulatory technical standards (RTS) under PRIIPS.
    9 November 2015  The European Commission published a study -  Consumer testing study of the possible new format and content for retail disclosures of packaged retail and insurance-based investment products. 
    11 November 2015  The ESAs launched a Joint Consultation Paper on PRIIPs Key Information Documents to gather stakeholder views on proposed rules on the content and presentation of the Key Information Documents (KID).
     6 January 2016 ESAs published corrections to errata found in formulae in Joint Consultation Paper on PRIIPs KID.
     6 January 2016 Insurance Europe published a note regarding concerns over the short timeframe in which the industry must  implement the KID for PRIIPs: Insurance Europe: PRIIPs implementation timeframe – extension required.
    10 February 2016 ESMA published responses to its earlier consultation on KID under PRIIPs. Draft RTS were submitted to the Commission for approval.
    11 March 2016 

    ESMA's Securities and Markets Shareholder Group published text of a letter it sent to Jonathan Hill and others which raised concerns over aspects of the PRIIPs Regulation, specifically the elimination of past performance in the contents of the KID, and its replacement by “future performance scenarios”. It urges amendments to the Level 1 Regulation before it enters into force on 31 December 2016.

    7 April 2016 EBA/EIOPA/ESMA published finalised RTS on KIDs for PRIIPs.
    8 April 2016 Insurance Europe published a press release regarding PRIIPs. Specifically, Insurance Europe maintains that the proposed PRIIPs KID will mislead consumers owing to design faults.
    26 April 2016 ESMA published its responses to the Commission's Green Paper on retail financial services: including responses in relation to IDD, MiFID II, PRIIPs, UCITS, personal pension products and covered bonds, redress and the Impact of digital technologies on the retail financial markets.
    26 May 2016 Insurance Europe published a new paper highlighting technical concerns over final draft RTS. 
    30 June 2016 European Commission Delegated Regulation with regard to the presentation, content, review and revision of key information documents and the conditions for fulfilling the requirement to provide such documents has been adopted.
    1 July 2016 Joint letter on the supervisory convergence work by the ESAs on PRIIPs was published - specifically noting the work on level 3 materials.
    15 July 2016 Commission Delegated Regulation of 14.7.2016 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council with regard to product intervention has been adopted by the European Commission. 
    1 September 2016 ECON has unanimously rejected the Commission's investor protection proposals, saying they were "misleading" and "flawed", with much criticism directed at the KID.

    Further past dates are accessible via the news feed on the PRIIPs page.

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  • Subject:
    Bank Recovery & Resolution Directive (BRRD)
    Status:
    BRRD entered into force on 2 July 2014 (Article 124 entered into force on 1 January 2015). BRRD permitted member states to apply the provisions on the bail-in tool from 1 January 2016 at the latest
    Last updated:
    02/05/2017
    Overview/summary:

    The Bank Recovery and Resolution Directive 2014/59/EU (BRRD), is a minimum harmonisation directive which introduces an EU-wide framework of rules and powers for the recovery and resolution of credit institutions and investment firms. The BRRD contains the rules that the Single Resolution Mechanism (SRM) applies in SSM-area (Eurozone) Member States.

    Publications by date:

     

     6 June 2012 Original draft proposal for BRRD adopted by European Commission.
     12 December 2013 European Commission announces political agreement on BRRD
     20 March 2014 European Commission announces political agreement on SRM
     12 June 2014 BRRD published in Official Journal with the main provisions to be implemented by 1 January 2015;
     30 July 2014 Regulation establishing SRM published in Official Journal
     19 August 2014 SRM entered into force with some provisions operative from 1 January 2015 and the full SRM operative from 1 January 2016.
     23 October 2014 BoE published document setting out its approach to resolution.
    December 2014 and January 2015 Statutory instruments published by HM Treasury (measures transposing BRRD).
     January 2015

    BRRD applies in all Member States.

    EBA published Consultation paper: Draft Implementing Technical Standards on procedures, forms and templates for the provision of information for resolution plans under Article 11(3) of Directive 2014/59/EU of the European Parliament and the Council (EBA/CP/2015/01).

    Official Journal: Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements.

     January 2015 PRA’s policy statement (PS1/15) on implementing BRRD published.
     January 2015 FCA’s policy statement (PS15/2) on implementing the BRRD published.
     January 2015 Banking Act 2009 amended to reflect changes to the SRR necessary to implement the BRRD.
     January 2015 The UK Government amended provisions in the Insolvency Act 1986 (and other insolvency legislation) relating to preferential debts to reflect the provisions in the BRRD on depositor preference.
     March 2015

    EBA published technical advice on the delegated acts on critical functions and core business lines (EBA/Op/2015/05).

    EBA published Technical advice on the delegated acts on the circumstances when exclusions from the bail-in tool are necessary (EBA/Op/2015/07).

    EBA published Consultation Paper Draft Regulatory Technical Standards and guidelines on Business Reorganisation Plans under Directive 2014/59/EU (BRRD) (EBA/CP/2015/05).

    EBA published Consultation Paper: Draft Regulatory Technical Standard on a minimum set of the information on financial contracts that should be contained in the detailed records and the circumstances in which the requirement should be imposed (Article 71(8) BRRD) (EBA/CP/2015/04) .

    EBA published Technical advice on delegated acts on the deferral of extraordinary ex-post contributions to financial arrangements (EBA/Op/2015/06).

     May 2015

    EBA published Final guidance: Guidelines on the minimum list of qualitative and quantitative recovery plan indicators (EBA/GL/2015/02).

    EBA published Final report: Guidelines on triggers for use of early intervention measures pursuant to Article 27(4) of Directive 2014/59/EU (EBA/GL/2015/03).

    EBA published Final report: Guidelines on the interpretation of the different circumstances when an institution shall be considered as failing or likely to fail under Article 32(6) of Directive 2014/59/EU (EBA/GL/2015/07).

    EBA published Final guidelines: on factual circumstances amounting to a material threat to financial stability and on the elements related to the effectiveness of the sale of business tool under Article 39(4) of Directive 2014/59/EU (EBA/GL/2015/04).

    EBA published Final guidelines: on the determination of when the liquidation of assets or liabilities under normal insolvency proceedings could have an adverse effect on one or more financial markets under Article 42(14) of Directive 2014/59/EU (EBA/GL/2015/05).

    EBA published Consultation Paper: Draft Regulatory Technical Standards On the valuation of derivatives pursuant to Article 49(4) of the Bank Recovery and Resolution Directive (BRRD) (EBA/CP/2015/10).

    EBA published Final guidelines: on the minimum list of services or facilities that are necessary to enable a recipient to operate a business transferred to it under Article 65(5) of Directive 2014/59/EU (EBA/GL/2015/06).

     July 2015

    EBA published Final report: Guidelines on the application of simplified obligations under Article 4(5) of Directive 2014/59/EU (EBA/GL/2015/16).

    EBA published Final Report: Draft Implementing Technical Standards on the uniform formats, templates and definitions for the identification and transmission of information by competent authorities and resolution authorities to the EBA for the purposes of Article 4(7) of Directive 2014/59/EU (EBA/ITS/2015/05).

    EBA published Final report: Draft implementing technical standards on procedures, forms and templates for the provision of information for resolution plans under Article 11(3) of Directive 2014/59/EU of the European Parliament and the Council (EBA/ITS/2015/06).

    EBA published Final draft regulatory technical standards specifying the conditions for group financial support under Article 23 of Directive 2014/59/EU (EBA/RTS/2015/08).

    EBA published Final draft implementing technical standards on the form and content of disclosure of financial support agreements under Article 26 of Directive 2014/59/EU (EBA/ITS/2015/07).

    EBA published Guidelines specifying the conditions for group financial support under Article 23 of Directive 2014/59/EU (EBA/GL/2015/17).

    EBA published Final report: Draft regulatory technical standards on independent valuers under Article 36(14) of Directive 2014/59/EU (EBA/RTS/2015/07).

    EBA published Final draft regulatory technical standards on criteria for determining the minimum requirement for own funds and eligible liabilities under Directive 2014/59/EU (EBA/RTS/2015/05).

    EBA published Final report: Draft Regulatory Technical Standards on the contractual recognition of write-down and conversion powers under Article 55(3) of Directive 2014/59/EU (EBA/RTS/2015/06).

    EBA published Final draft regulatory technical standards on procedures and contents of notifications referred to in Article 81(1), (2) and (3) and the notice of suspension referred to in Article 83 of Directive 2014/59/EU (EBA/RTS/2015/04).

    EBA published Final draft regulatory technical standards on resolution colleges under Article 88(7) of Directive 2014/59/EU (EBA/RTS/2015/03).

     October 2015 EBA published Consultation paper: Guidelines on the provision of information in summary or collective form for the purposes of Article 84(3) of Directive 2014/59/EU (EBA/CP/2015/18).
     November 2015 PRA published modification by consent relating to the transposition of Article 55 BRRD (contractual bail-in).
     December 2015 HM Treasury launched a consultation regarding amendments to Banking Act 2009 and FSMA 2000 in order to transpose BRRD in UK law.
     December 2015

    EBA published revised Guidelines specifying the conditions for group financial support under Article 23 of Directive 2014/59/EU.

    EBA published Final report: Draft Regulatory Technical Standards on the valuation of derivatives pursuant to Article 49(4) of the Bank Recovery and Resolution Directive (BRRD) (EBA/RTS/2015/11).

    EBA published Final Report: Draft Regulatory Technical Standards and Guidelines on business reorganisation plans under Directive 2014/59/EU (BRRD) (EBA/RTS/2015/12) (EBA/GL/2015/21).

    EBA published Final report: Draft Regulatory Technical Standards on a minimum set of the information on financial contracts that should be contained in the detailed records and the circumstances in which the requirement should be imposed (Article 71(8) BRRD) (EBA/RTS/2015/13).

    European Commission published Commission Delegated Regulation (EU) …/... of 14.12.2015 correcting Delegated Regulation (EU) 2015/63 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (C(2015) 8835). 

     31 December 2015 FCA published a modification by consent to transpose the Article 55 BRRD ( contractual bail-in) into IFPRU 11.6.
     1 January 2016 Contractual recognition of bail-in requirements (Article 55 BRRD) in force and in effect. 
    29 January 2016 EBA published a letter to the Commission (dated 18 December) in which it asked for an extension to its deadlines for the submission of specific draft technical standards (Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS)) required under CRD4 and CRR and BRRD.  
    2 February 2016 European Commission adopted Commission Delegated Regulation (EU) of 2.2.2016 supplementing Directive 2014/59/EU.
    4 February 2016 

    European Commission adopted Commission Delegated Regulation (EU) of 4.2.2016 specifying further the circumstances where exclusion from the application of write-down or conversion powers is necessary under Article 44(3) of BRRD

    EBA published responses to its earlier consultation (27 October 2015) regarding the way in which information should be provided under the BRRD

    9 February 2016 EBA published an Opinion outlining its dissent vis-a-vis some of the European Commission's proposed amendments to the EBA final draft Regulatory Technical Standard on the criteria for setting the minimum requirement for own funds and eligible liabilities (MREL).
    18 February 2016 Council Decision (EU) 2016/228 of 14 July 2015 on the resolution procedure was published in the OJ.
    18 March 2016 European Commission adopted Delegated Regulation on classes of arrangements to be protected in a partial property transfer under Article 76 of Directive 2014/59/EU of the European Parliament and of the Council (C(2016) 1372).
    24 March 2016 Commission Delegated Regulation of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of recovery plans, resolution plans and group resolution plans, the minimum criteria that the competent authority is to assess as regards recovery plans and group recovery plans, the conditions for group financial support, the requirements for independent valuers, the contractual recognition of write-down and conversion powers, the procedures and contents of notification requirements and of notice of suspension and the operational functioning of the resolution colleges was adopted.
    12 April 2016 ESRB published a working paper Bail-in expectations for European banks: actions speak louder .
    20 April 2016 EBA published final Guidelines on the provision of information in summary or collective form the purposes of Article 84(3) of Directive 2014/59/EU.
    10 May 2016 European Commission adopted Delegated Regulation (C (2016) 2665) containing regulatory technical standards relating to business reorganisation plans under BRRD.
     20 May 2016  The following Delegated Regulation was published in the OJ:
    Commission Delegated Regulation (EU) 2016/778 of 2 February 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to the circumstances and conditions under which the payment of extraordinary ex post contributions may be partially or entirely deferred, and on the criteria for the determination of the activities, services and operations with regard to critical functions, and for the determination of the business lines and associated services with regard to core business lines.
     23 May 2016 European Commission adopted two Delegated Regulations with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities and on regulatory technical standards for methodologies and principles on the valuation of liabilities arising from derivatives.
     1 June 2016 Commission Delegated Regulation (EU) 2016/860 of 4 February 2016 specifying further the circumstances where exclusion from the application of write-down or conversion powers is necessary under Article 44(3) of Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms was published in the Official Journal.
     2 June 2016 ESMA published a statement reminding firms of their responsibility to act in their clients’ best interests when selling bail-in-able financial instruments and which emphasises that firms must comply with their obligations under MiFID.
     7 June 2016 European Commission adopted Delegated Regulation regarding RTS on detailed records of financial contracts under BRRD.
     17 June 2016 Commission Implementing Regulation (EU) 2016/962 of 16 June 2016 laying down implementing technical standards with regard to the uniform formats, templates and definitions for the identification and transmission of information by competent authorities and resolution authorities to the European Banking Authority according to Directive 2014/59/EU of the European Parliament and of the Council, was published in the OJ.
    3 August 2016 EBA has published a list of designated resolution authorities across the EC and EEA, including links to websites.
    23 August 2016 Commission Delegated Regulation ((EU) 2016/1401) supplementing BRRD (2014/59/EU) with regulatory technical standards for methodologies and principles on the valuation of liabilities arising from derivatives has been published in the OJ. (Available via the first link below.) Commission Delegated Regulation ((EU) 2016/1400) supplementing BRRD (2014/59/EU) with regulatory technical standards relating to business reorganisation plans has been published in the OJ.
    30 August 2016 Commission Delegated Regulation (EU) 2016/1434 of 14 December 2015 correcting Delegated Regulation (EU) 2015/63 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements has now been published in the Official Journal.
    5 September 2016 Commission Delegated Regulation (EU) 2016/1450 of 23 May 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities has been published in the Official Journal.

    Further past dates are accessible via the newsfeed on the RegZone recovery and resolution topic page here.

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  • Subject:
    Client Assets Sourcebook (FCA)
    Status:
    FCA: PS14/9 (with final rules) published - relates to all firms that are subject to CASS because they conduct investment business and hold client money, custody assets, collateral and or mandates in relation to that investment business. This includes loan-based crowdfunding firms who became subject to client money rules in CASS 7 by the changes published in PS14/4. CASS rules changes following PS14/9 came into force in three phases: 1 July 2014, 1 December 2014 and 1 June 2015. Firms could choose to begin complying with any of the requirements introduced by PS14/9 before the relevant requirement came into force. FCA Business Plan 2016/17 notes client assets is part of ongoing work. Moreover, in March 2016, HM Treasury and the FCA have lauched consultations relating to the Bloxham report and SAR.
    Last updated:
    21/02/2017
    Overview/summary:

    The Client Assets Sourcebook (CASS) is the section of the FCA handbook containing the requirements relating to holding client assets and client money. The FCA consulted on substantial changes to these rules from July-August 2013 (CP13/5); in particular, a new and faster system for distributing client money in the event of an insolvency (the 'speed proposal'). This was complicated by the wide-ranging review of the Special Administration Regime (SAR) - the Bloxham report - being undertaken at the same time. Policy Statement 14/9 (PS14/9), including final changes to CASS, was published in June 2014; it was revealed there that the FCA has postponed consideration of the 'speed proposal' - there have been no further developments regarding the ‘speed proposal’ and it has, ostensibly, been dropped.

    The rules in PS14/9 affect all firms that are subject to CASS because they conduct investment business and hold client money, custody assets, collateral and or mandates in relation to that investment business. This includes loan-based crowdfunding firms who became subject to client money rules in CASS 7 by the changes published in PS14/4.

    The FCA’s Business Plan 2015/16 highlights that the FCA will review the client money distribution rules in line with HM Treasury’s SAR review. The FCA published final client money rules for insurance intermediaries in 2015. Additionally, the FCA will consider the impact of international client assets initiatives and EU legislation (such as EMIR) on the CASS sourcebook and make any necessary amendments.

    The FCA's Business Plan 2016/17 notes that part of prudential work will include continuing 'to ensure firms have appropriate mechanisms to protect client assets to ensure consumers are protected in the event of failure'. The FCA also highlights that conflicts of interest/client money remain a cause of risk across markets and will work with firms to ensure robust policies are in place to mitigate this risk.

    In March 2016, further to the Bloxham report, HM Treasury published Reforms to the investment bank special administration regime. Topics covered in this consultation paper include transfers of client assets; the SAR bar date mechanism; interaction of SAR and CASS; procedural and administrative proposals (including an enhanced role for FSCS) and lessons learned from case law. HM Treasury has also published a draft SI (The Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2016).

    In addition, the FCA published DP16/2: CASS 7A and the Special Administration Regime Review - it seeks feedback on CASS 7A, and how these rules work with the Special Administration Regime (SAR). It also sets out the FCA’s response to the recommendations in the Bloxham review which had been addressed to the FCA and seeks industry views on the discussion points raised and contains FCA’s response to the ‘speed proposal’, which was proposed in CP13/5.

    In January 2017 the FCA launched a consultation CP17/2 on CASS 7A and the SAR. The paper seeks feedback on proposed changes to the CASS rules affecting the return of client assets, against the backdrop of the amendments to the SAR Regulations; explains why certain proposals in CP13/5 and DP16/2 are not being taken forward and seeks feedback on minor consequential changes to CASS 7 and CASS 7A to address the forthcoming indirect clearing requirements under EMIR and MiFIR regulatory technical standards.

    Publications by date:

     

    July 2013 CP 13/5 published.
    April 2013 HM Treasury publishes consultation on the special administration regime for payment and settlement systems (SAR).
    11 October 2013 Responses to CP 13/5 required.
    January 2014 HM Treasury published the Final Review of the Investment Bank Special Administration Regulations 2011 conducted by Peter Bloxham.
    10 June 2014 PS 14/9 published.
    1 July 2014 Some PS14/9 rule changes came into force.
    1 December 2014 Certain PS 14/9 rules and guidance came into force relating to the provision of information to or obtaining the agreement of new clients and the documenting of agreements and arrangements with any new counterparties with whom firms deposit or place custody assets or client money.
    March 2015 FCA launched Quarterly Consultation No.8 including proposed minor amendments to CASS.
    1 June 2015 From this date FCA authorised firms needed to comply fully with all of the changes under PS14/9.
    9 November 2015 FRC published Providing assurance on client assets to the FCA.
    9 March 2016 

    FCA published DP16/2: CASS 7A and the Special Administration Regime Review.

    HM Treasury published Reforms to the investment bank special administration regime.

    21 March 2016 FCA published PS16/8: FCA Handbook changes regarding the segregation of client money on loan-based crowdfunding platforms, the Innovative Finance ISA, and the regulated activity of advising on peer-to-peer agreements.
    4 April 2016 FCA Business Plan 2016/17 published -  client assets forms part of ongoing work.
    16 August 2016

    FCA provides an update on its earlier review of the client money rules for insurance intermediaries.

     

    Further past dates are accessible via the client assets newsfeed here.

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  • Subject:
    Benchmarks (EU)
    Status:
    Amendments on benchmark manipulation added to MAD II. On 29 June 2016 the Regulation was published in the Official Journal of the EU, and the majority of provisions were in force and in effect from 1 January 2018.
    Last updated:
    02/01/2018
    Overview/summary:

    The proposed Regulation on indices used as benchmarks in financial instruments and financial contracts is part of the EU-level response to revelations of LIBOR and EURIBOR manipulation in 2012. The Regulation would require improved governance and controls for benchmark-setting processes; detailed provisions concerning the data and methodologies to be used; and external regulatory supervision of benchmarks. Amendments to the recast Market Abuse Directive proposal (MAD II) were also adopted, making the manipulation of benchmarks a criminal offence.

    The proposed Regulation was adopted by the European Commission and the European Parliament on 28 April 2016. On 17 May 2016 the Council formally adopted the Regulation. On 29 June 2016 the Regulation was published in the Official Journal of the EU.

    To see our Reform Tracker item on Benchmarks specific to the UK please click here.

    Publications by date:

     

    25 July 2012 EC adopts amendments to MAD II criminalising the manipulation of benchmarks.
    September 2012 EC consultation on benchmarks and indices.
    18 September 2013 Original draft proposal for a Regulation on indices used as benchmarks.
    October 2013 Committee referral announced in Parliament, 1st reading/single reading.
    January 2014 European Central Bank publishes opinion/report.
    January 2014 Economic and Social Committee publishes opinion/report.
    February 2015 EU Council issues press release backing European Commission proposal to fight against the manipulation of financial benchmarks.
    March 2015 Vote in Committee, 1st reading/single reading.
    April 2015 Committee report tabled for plenary, 1st reading/single reading.
    19 May 2015 European Parliament agrees negotiating mandate for regulation of financial benchmarks.
    25 November 2015 Council of the EU, European Parliament, and the Commission reached an agreement on the  on the proposed Regulation on financial benchmarks. A compromise was reached on the third country regime.
    9 December 2015 The Permanent Representatives Committee approved, on behalf of the Council, a compromise agreed with the European Parliament. The regulation will now be submitted to the European Parliament for a vote at first reading, and to the Council for final adoption. 
    15 February 2016 ESMA published a discussion paper on implementation of the forthcoming Benchmarks Regulation.
    23 March 2016 EBA published Decision regarding the formula to be used by creditors when calculating the benchmark rate under the Mortgage Credit Directive.
    1 April 2016  FMLC published its response to ESMA's consultation paper of February 2016. The report highlights areas of legal uncertainty.
    8 April 2016 ESMA published responses received regarding the Discussion Paper on Benchmarks Regulation.
    28 April 2016  European Parliament adopted the proposed Regulation.
    12 May 2016 Council published an 'I' note in respect of the proposed Benchmarks Regulation.
    17 May 2016 Council formally adopted the proposed Regulation.
    27 May 2016 ESMA launched a consultation on draft technical advice under the Benchmarks Regulation.
    10 June 2016 Council of EU published revised text of the Regulation.
    29 June 2016 Regulation was published in the OJ.
    19 July 2016 FSB published a progress report on implementation of its July 2014 recommendations to reform major interest rate benchmarks.
    12 August 2016 Commission Implementing Regulation (EU) 2016/1368 of 11 August 2016 establishing a list of critical benchmarks used in financial markets pursuant to Regulation (EU) 2016/1011 of the European Parliament and of the Council has been published in the Official Journal.
    29 September 2016 ESMA launched a consultation on draft technical standards under the Benchmarks Regulation.
    3 October 2016 ESMA has developed model written arrangements that may be used by administrators of critical benchmarks according to Article 46(6) of the Benchmarks Regulation.
    10 November 2016 ESMA published finalised technical advice regarding rules for financial benchmarks.
    21 November 2016 Commission Delegated Regulation (EU) 2016/2021 of 2 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on access in respect of benchmarks has now been published in the Official Journal.

    Further past dates are accessible via the Benchmarks newsfeed here.

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  • Subject:
    Bail-in powers
    Status:
    Bail-in powers under Financial Services (Banking Reform) Act abandoned, now introduced under BRRD. The UK applied bail-in requirements from 1 January 2015 (with the exception of provisions relating to MREL and Article 55 of the BRRD). Requirements on contractual recognition of bail-in were introduced on 1 January 2016.
    Last updated:
    21/12/2016
    Overview/summary:

    ‘Bail-in’ bonds are a form of long-term unsecured debt, which could be forced by the regulator (exercising its ‘bail-in power’) to bear losses on a bank going into resolution (potentially along with other unsecured liabilities –the ‘secondary bail-in power’). This would be achieved either by writing down the debt, or ‘converting’ it into equity.

    Bail-in provisions are included in the EU Bank Recovery and Resolution Directive (BRRD) (q.v.), but this was pre-empted in the UK by bail-in provisions which were included in the Financial Services (Banking Reform) Act 2013. However, these have not come into force. Instead, bail-in provisions which are compliant with BRRD were introduced by the UK on 1 January 2015 (with the exception of provisions relating to MREL and Article 55 of the BRRD). Requirements on contractual recognition of bail-in were introduced on 1 January 2016.

    The UK Government has decided to delay the application of MREL to 1 January 2016 as it expects major policy developments in the interim from the Financial Stability Board on total loss absorbing capacity.

     

    This reform tracker item is no longer updated. 

     

    Publications by date:

     

     

    12 September 2011 Final report of the Independent Commission on Banking Reform (i.e. the Vickers report) published.

    July 2013
    HMT consultation on secondary legislation to be made under the proposed Banking Reform Bill.
    18 December 2013 Financial Services (Banking Reform) Act receives Royal Assent.
    8 October 2013 Bank of England publishes draft annex to the Special Resolution Regime code of practice on the bail-in power.
    1 March 2014 Some of the provisions related to bail-in come into force, although the actual bail-in power itself does not come into force.
    13 March 2014 HM Treasury begins consultation on the bail-in power, including draft secondary legislation on compensation for bail-in bondholders; extending bail-in powers to building societies; and ‘protected arrangements’ to be safeguarded from use of bail-in.
    July 2014 HM Treasury published consultation paper on the transposition of BRRD. It was announced they would not be commencing the bail-in legislation from the Banking Reform Act, but instead will now be introducing the bail-in powers which are compliant with the BRRD.
    August 2014 FCA published a consultation paper proposing changes to their Handbook that are required in order to transpose BRRD into the UK regulatory regime for the investment firms that the FCA regulates prudentially (IFPRU 730k firms) as well as certain group entities that fall within the scope of BRRD.
    16 January 2015 FCA publishes Policy Statement PS15/2 on the main issues arising from their earlier CP14/15 on BRRD and it sets out final rules to transpose BRRD into the UK’s regulatory regime.
    January 2015 PRA publishes Policy Statement PS1/15 on implementing the BRRD.
     March 2015 HM Treasury published the response to its earlier consultation on the transposition of BRRD.
     25 November 2015 PRA issued a modification by consent relating to rules in the Contractual Recognition of Bail-in Part of its Rulebook. In doing so, the PRA has transposed Article 55  of the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD).
     December 2015 HM Treasury launched a consultation on amending UK legislation transposing BRRD (namely, Banking Act 2009 and FSMA 2000). 
     31 December 2015 FCA published a modification by consent relating to the contractual bail-in rules in chapter 11 of its Prudential sourcebook for Investment Firms (IFPRU). The FCA has transposed Article 55 (re: contractual recognition of bail-in) of the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD) through the rules in IFPRU 11.6.
     1 January 2016 Contractual bail-in requirements now effective.
    10 May 2016 European Commission adopted Delegated Regulation (C (2016) 2665) containing regulatory technical standards relating to business reorganisation plans under BRRD.
    19 May 2016 FCA published a note aimed at entities defined as IFPRU-730k firms on its recent assessment of firms’ recovery plan with BRRD. It reports generally good submissions, but provides details on some specific areas for improvement, including interconnectedness, indicators, definitions of core business and critical functions, crisis management arrangements and options/scenarios. FCA urges firms to review and ensure the effectiveness of their underlying governance and risk management arrangements as well as their recovery plans.
    20 May 2016

    The following Delegated Regulation was published in the OJ:

    Commission Delegated Regulation (EU) 2016/778 of 2 February 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to the circumstances and conditions under which the payment of extraordinary ex post contributions may be partially or entirely deferred, and on the criteria for the determination of the activities, services and operations with regard to critical functions, and for the determination of the business lines and associated services with regard to core business lines.

    23 May 2016

    European Commission adopted two Delegated Regulations with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities and on regulatory technical standards for methodologies and principles on the valuation of liabilities arising from derivatives.

    FCA published GC16/5: Proposed guidance on wind-down planning.

    1 June 2016 Commission Delegated Regulation (EU) 2016/860 of 4 February 2016 specifying further the circumstances where exclusion from the application of write-down or conversion powers is necessary under Article 44(3) of Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms was published in the Official Journal.
    2 June 2016 ESMA published a statement reminding firms of their responsibility to act in their clients’ best interests when selling bail-in-able financial instruments and which emphasises that firms must comply with their obligations under MiFID.
    7 June 2016 European Commission adopted Delegated Regulation regarding RTS on detailed records of financial contracts under BRRD.
    17 June 2016 Commission Implementing Regulation (EU) 2016/962 of 16 June 2016 laying down implementing technical standards with regard to the uniform formats, templates and definitions for the identification and transmission of information by competent authorities and resolution authorities to the European Banking Authority according to Directive 2014/59/EU of the European Parliament and of the Council, was published in the OJ.
    29 June 2016 PRA published PS17/16: The contractual recognition of bail-in: amendments to PRA rules/SS7/16: The contractual recognition of bail-in: impracticability.
    2 August 2016 The House of Commons Treasury Select Committee published a letter sent to the PRA regarding disclosures and bail-in.
    8 November 2016 Bank of England/PRA published a response document to the earlier December 2015 on MREL.

    Further past dates are accessible via the RegZone recovery and resolution newsfeed here.

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  • Subject:
    Individual Accountability in Insurance - Senior Insurance Managers’ Regime
    Status:
    The Senior Insurance Managers’ Regime commened 7 March 2016; Solvency II is a new regime for the prudential regulation of European insurance firms that entered into force on 1 January 2016.
    Last updated:
    22/12/2016
    Overview/summary:

    The Senior Insurance Managers’ Regime (SIMR) is based on similar rules that apply to senior bankers as of March 2016 (and all other senior managers across all regulated financial firms by 2018) but it is specifically tailored to the different business models and associated risks of insurers. For firms other than insurers, the Senior Managers’ and Certification Regime (SM&CR) will replace the Approved Persons’ Regime. The SIMR to be introduced by the PRA (and changes to the APR applying to insurers made by the FCA) will cover the assessment of fitness and propriety of senior insurance managers and directors, the allocation of certain responsibilities to senior individuals, and the application of relevant conduct rules to senior individuals.

     

    The SIMR applies to insurance firms that are within the scope of Solvency II and insurance firms that are outside the scope of Solvency II. Solvency II is a new regime for the prudential regulation of European insurance firms that entered into force on 1 January 2016. The PRA estimates around 100 insurance firms in the UK will fall outside of the scope of Solvency II. Currently, the PRA is consulting on proposals to apply the SIMR to non-Directive firms (NDFs) with assets of more than £25 million.

     

    For details regarding the Senior Managers’ and Certification Regime (SM&CR), please see the separate Reform Tracker item on this topic.

    Publications by date:
    November 2014 FCA (CP14/25) and PRA (CP26/14) published consultation papers setting out proposals on how they intend to reflect changes brought about by the Solvency II Directive and the Banking Reform Act 2013.
    March 2015 PRA published Policy Statement PS2/15 that set out the rules along with supervisory statements required for the implementation of the Solvency II Directive.
    March 2015 PRA (CP13/15) and FCA (CP15/16) launched consultation papers on changes to the Approved Persons Regime for Solvency II firms and outlined the consequential changes, transitional arrangements and forms required.
    August 2015 PRA published Consultation Paper CP26/15 setting out implementation proposals for non-Solvency II firms; it contained a key proposal of applying the SIMR to non-Directive firms with assets of more than £25 million.
    13 August 2015 PRA published Policy Statement PS21/15 that sets out key elements of the Senior Insurance Managers’ Regime for insurance firms that are outside the scope of Solvency II.
    28 August 2015 PRA published Consultation Paper CP31/15 concerning the PRA’s approach to third-country insurance and pure reinsurance branches under the Solvency II Directive.
    6 October 2015 PRA and FCA published Consultation Paper CP36/15 Strengthening accountability in banking and insurance: regulatory references.
    14 October 2015 First reading of Bank of England and Financial Services Bill in the House of Lords.
    15 October 2015 HMT published the policy paper Senior Managers’ and Certification Regime: extension to all FSMA authorised persons.
    11 November 2015  PRA published an occasional consultation paper proposing minor amendments to certain rules and to supervisory statements SS13/13 and SS12/13. Chapter 4: consequential amendments to the senior managers' regime (SMR) and the senior insurance managers' regime (SIMR).
     20 November 2015 PRA published PS26/15: The prudential regime, and implementation of the senior insurance managers regime, for non-Solvency II firms.
    15 December 2015  PRA published SIMR: preparing for grandfathering. This letter was aimed at small non-Solvency II insurance firms and sets out what they need to do ahead of the SIMR and where to find further details.
     16 December 2015 FCA published PS15/31: Final rules on changes to the approved persons regime for insurers not subject to Solvency II.
     6 January 2016

    PRA launched CP1/16 regarding individual responsibility in banking and updated SS28/15. 

     FCA launched CP1/16 "Consequential changes to the Senior Managers' Regime".

    1 March 2016 PRA published: Strengthening accountability update (concerning SIMR and the SM&CR).
    7 March 2016 SIMR entered into force.
    10 March 2016 PRA published: Modification by consent of non-Solvency II Firms – SIMR.
    11 March 2016 PRA has published revised versions of its approach to banking and insurance documents. Annexes in both documents set out synopses of changes made, which include new sections on SMR/SIMR.
    8 June 2016 Bank of England and Financial Services Act 2016 (Commencement No 3) Regulations 2016 (SI 2016/627) have been published. The majority of provisions enter into force on 6 July 2016 (including certain provisions relating to the senior managers and certification regime).

    Further past dates are accessible via the RegZone news feed here.

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  • Subject:
    Unregulated Collective Investment Schemes (UCIS)
    Status:
    New FCA rules on UCIS in effect since 1 January 2014. These rules ban the promotion of UCIS and close substitutes to retail investors other than where specific exemptions apply. In April 2016 the UK Supreme Court handed down a judgment in Asset Land v FCA. In which it clarifies the definition of CIS under FSMA 2000. Further to this judgment, the FCA has issued a press release and guide for affected investors.
    Last updated:
    22/12/2016
    Overview/summary:

    Unregulated Collective Investment Schemes (UCIS) is a UK-specific term for funds (and similar investments) that are not subject to the full set of FCA rules applied to retail-oriented investment funds. As such, UCIS can only be sold to retail investors in limited and very specific circumstances; the FCA has deemed UCIS unsuitable for ‘ordinary’ retail investors. The present complex and restrictive rules on the retail sale of UCIS were established by FCA PS 13/3, and are contained in s.238 FSMACOBS 4.12COLL 8.1 and PERG 8.20 and 9.10. Despite the name, UCIS may still be subject to some regulations, e.g. those imposed by the Alternative Investment Fund Managers’ Directive (AIFMD).

    This reform tracker item is no longer updated.

    Publications by date:

     

    August 2012 FSA publishes consultation paper 12/19 outlining proposals to ban UCIS; a draft of the FSA instrument is set out in the consultation.
    12 February 2013 FSA publishes letter providing an update on its progress.
    4 June 2013 The FCA published a policy statement setting out finalised rules and guidance on restrictions on the retail distribution of unregulated collective investment schemes (UCIS) and close substitutes (PS13/3).
    1 January 2014 FCA rules banning the promotion of UCIS and close substitutes to retail investors (other than where specific exemptions apply) comes into force.
    29 October 2015 ESMA issued Guidelines on sound remuneration policies under the UCITS Directive and AIFMD.
    26 April 2016

    UK Supreme Court Decision (Asset Land v FCA) clarifies the definition of a CIS under FSMA 2000.

    FCA published a press release which provides a brief overview and guide for affected investors as well as urging consumers to contact the regulator if they think they may have been contacted by a land banking operation.

     

    Further past dates are accessible via the RegZone UCIS news feed here.

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  • Subject:
    Foreign Account Tax Compliance Act (FATCA)
    Status:
    FATCA in effect, applying to withholdable payments made on or after 1 January 2013.
    Last updated:
    29/11/2016
    Overview/summary:

    The Foreign Account Tax Compliance Act (FATCA) is a US Congressional Act designed to target offshore evasion by identifying US citizens receiving unreported income outside the US. International co-operation with FATCA was obtained by means of various intergovernmental agreements; under these agreements, financial institutions in the EU (and elsewhere) are required to report identifying information and account details for any US account holders to national authorities (e.g. HMRC in the UK), who in turn pass this information on to the US Internal Revenue Service.

    This reform tracker item is no longer updated.

    Publications by date:

     

    18 March 2010 US Hiring Incentives to Restore Employment (HIRE) incorporating FATCA signed in.
    July 2012 France, Germany, Italy, Spain, UK and US announce publication of the Model Intergovernmental Agreement to Improve Tax Compliance and to Implement FATCA.
    12 September 2012 (UK) UK-US FATCA Agreement signed. End of 2012: UK draft implementing legislation published. The IGA reduces some of the administrative burden of complying with the US regulations, and provides a mechanism for UK financial institutions to comply with their obligations without breaching the data protection laws.
    28 January 2013 Final US Regulations published.
    31 May 2013 (UK) Further draft regulations and guidance notes published by HMT.
    12 July 2013 The IRS issued a notice providing for an effective six month delay for all substantive provisions.
    6 August 2013 (UK) The International Tax Compliance (United States of America) Regulations 2013 SI 2013/1962 made.
    1 September 2013 (UK) The International Tax Compliance Regulations come into force.
    19 May 2014 IRS published  Notice 2014-33 (IRB 2014-21) announcing a transition period for the purposes of IRS enforcement and administration with respect to the implementation of FATCA by withholding agents, foreign financial institutions, and other entities.
    25 August 2014 IRS published Revenue Procedure 2014-47 (IRB 2014-35) regarding updated withholding foreign partnership and withholding foreign trust agreements.
    3 September 2014 (UK) HMRC has published revised guidelines on the implementation of FATCA.
    7 October 2014 IRS published Notice 2014-59 on the modified applicability of dates for the standards of knowledge applicable to a withholding certificate or documentary evidence to document certain payees and the circumstances under which a withholding agent or payor may rely on documentary evidence provided by a payee instead of a withholding certificate to document the foreign status of the payee.
    1 December 2014 IRS published Announcement 2014-38 update on jurisdictions treated as of they had an IGA in effect.
    1 January 2015 US IRS deadline for reporting Model 1 FFIs to ensure that they are included on the IRS FFI list.
    26 March 2015 (UK) HM Treasury published summary of responses regarding their earlier consultation on implementing agreements under the global standard on automatic exchange of information to improve international tax compliance.
    31 March 2015 IRS reporting deadline for FFIs in non-IGA jurisdictions and FFIs in Model 2 IGA jurisdictions.
    24 September 2015 The Competent Authority of the United States has signed Competent Authority Arrangements (CAA) with the Competent Authorities of Australia and the United Kingdom.
    20 November 2015  The International Tax Compliance (Amendment) Regulations 2015/1839  entered into force. The Regulations give effect to agreements and arrangements reached between the UK and other jurisdictions to improve international tax compliance. 
    3 May 2016  US Court dismisses case against FATCA disclosures.
    12 May 2016 (UK) HMRC published in final form its International Exchange of Information Manual. The IEIM incorporates in one place HMRC’s guidance on FATCA, the OECD’s Common Reporting Standard, the EU’s Council Directive on Administrative Cooperation and the UK’s Inter-Governmental Agreement with the Crown Dependencies and Overseas Territories.
    30 June 2016 This date marks the end of the two-year 'grace period' for compliance with FATCA granted by the IRS. From this date, foreign FIs without a validated FATCA classification will default to a ‘withholding’ status.

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  • Subject:
    Ring-fencing (UK) and the ICB.
    Status:
    Ring-fencing powers in the Financial Services (Banking Reform) Act not yet in force; the UK Government has stated its intention for ring-fencing to take effect from 1 January 2019.
    Last updated:
    02/05/2017
    Overview/summary:

    The Financial Services (Banking Reform) Act 2013, intended to implement the recommendations of the 2012 Vickers Report, introduced a requirement that a ‘ring-fenced body’, which carries on the regulated activity of accepting customer deposits, should not carry out any ‘excluded activities’, such as dealing in investments as principal (or anything else the Treasury might designate as such). The Act also provides the FCA and PRA with certain rulemaking and discretionary powers. Two pieces of secondary legislation made by HM Treasury in 2014 specifies that institutions which have more than £25 billion of core deposits from individuals and small businesses will be subject to ring-fencing requirements. The secondary legislation allows large organisations and high net worth individuals to place deposits outside ring-fenced bodies if they so choose. The FCA is required under secondary legislation to make disclosure rules applying to entities which are not ring-fenced but sit within banking groups which include a ring-fenced body.

     

    Both the FCA and PRA consulted throughout 2015 on aspects regarding implementation of ring-fencing in the UK. Feedback, final and near final rules, and further consultation papers were published by the regulators in 2016. In February 2017, the PRA issued PS3/17: The implementation of ring-fencing: reporting and residual matters – responses to CP25/16 and Chapter 5 of CP36/16. In March HM Treasury published a policy paper on ring fencing.

     

    Please see the entry on ‘Ring-fencing (EU) and the Liikanen Report’ for the EU-wide regime proposed by the European Commission’s draft Regulation on structural measures improving the resilience of EU credit institutions, based on the 2012 Liikanen Report.The outcome of this legislative process may affect aspects of the UK’s implementation of ring-fencing: notably, the Commission proposes to allow a derogation from the separation requirements for credit institutions covered by national legislation that has an equivalent effect (subject to a number of requirements).

    Publications by date:

     

    12 September 2011  ICB final report on banking reform published
    14 June 2012  Government publishes white paper on banking reform, setting out proposals to implement key recommendations of Vickers report
    September 2012  Parliamentary Commission begins works on Banking Reform Bill
    12 October 2012  HMT publishes draft Banking Reform Bill
    18 December 2013  Financial Services (Banking Reform) Act received Royal Assent
    29 January 2014  EU legislative proposals published
    July 2014 Final version of the The Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014 (SI 2014/1960) was published with an explanatory memorandum.
    July 2014 HM Treasury published a consultation paper inviting comments on a draft  of the Financial Services and Markets Act 2000 (Banking Reform Pensions) Regulations 2014
    August 2014 The Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014 (SI 2014/2080) was published with an explanatory memorandum.
    October 2014 PRA launched (CP19/14) on rules and guidance relating to the ring-fence.
    January 2015 Draft of the Financial Services and Markets Act 2000 (Banking Reform) (Pensions) Regulations 2015 was published with a draft explanatory memorandum.
    January 2015 The Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) Regulations 2015 (SI 2015/19) was published with an explanatory memorandum. This amended the The Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 (SI 2014/894).
    March 2015 The Financial Services and Markets Act 2000 (Banking Reform) (Pensions) Regulations 2015 (SI 2015/547) was published with an explanatory memorandum.
    May 2015 PRA published PS10/15 including feedback to CP19/14 and near-final versions, of the new Ring-fenced Bodies Part to the PRA Rulebook and supervisory statements on RFBs' legal structure and on continuity of services and facilities.
    July 2015 FCA launched CP15/23 regarding disclosures that non-RFBs should make to customers that are individuals.
    September 2015  PRA launched CP33/15 regarding the implementation of ring-fencing and ring-fencing transfer schemes. 
    October 2015

    PRA launched CP37/15 regarding prudential requirements, intragroup arrangements and the use of FMIs.

    PRA launched CP38/15 regarding the creation of a new framework for firms to ensure the continuity of critical shared services.

    4 March 2016

    FCA published FG16/1: Guidance on the FCA’s approach to the implementation of ring-fencing and ring-fencing transfer schemes.

    PRA: published PS10/16: Implementation of ring-fencing: the PRA’s approach to ring-fencing transfer schemes.

    24 March 2016 FCA published PS16/9: Ring-fencing: disclosures to consumers by non-ring-fenced bodies.
    18 April 2016 UK Treasury Select Committee published  the text of a letter from Mark Carney to TSC with regard to what is described as a“disagreement” between Sir John Vickers and FPC over the implementation of the systemic risk buffer and the wider framework for bank capital. TSC states that it intends to open a new inquiry on UK capital standards and further details will be published shortly.
    20 April 2016 The Financial Services (Banking Reform) Act 2013 (Commencement No. 10) Order 2016/512 (C.31) - this Order brings into force on 21 April 2016 certain provisions of the Act in relation to ringfencing.
       

    Further past dates are accessible via the RegZone ring fencing news feed here.

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