PRA: Speech by Sam Woods: Stylish regulation
Text of this speech, given on 16 May 2019 follows, in which Sam Woods considers the UK system of regulation post-Brexit, including comparing the UK and EU approaches to regulation. He sets out six principles for an effective regulation framework and suggests that using the model of legislation which has been used to introduce the SMCR would be the best way to deliver these principles. The full text can be accessed here.
“So here are a few, which I would argue should form the basis of any regulatory regime which aims to deliver safety and soundness and financial stability in a UK context:
1. Robust prudential standards. …
2. Responsible openness based on international collaboration and standards. This principle is particularly relevant to the UK given the Government’s policy of maintaining the UK as a leading international financial centre, which is itself rooted in a centuries-long tradition of London as a major global trading hub. In practice, what does this mean? It means three things: first, that we have a mandate to engage strongly in international standard-setting processes and make sure that we are at the forefront of implementing those rules in a thorough way; second, that we adopt practices and structures which promote strong collaboration with colleagues in other jurisdictions; and third, that we are open to hosting cross-border business in the UK – but only if it is appropriately controlled and governed. Our recent moves to ring-fence retail banking, and other expectations (some going back to 2014) that firms will subsidiarise material retail banking and insurance businesses, are a vital part of what enables us to take this approach safely.
3. Proportionality and sensitivity to business models, and promoting competition. …
4. Dynamism and responsiveness. …
5. Consistency. …
6. Accountability. … ”
HoL EU Committee: Scrutiny of international agreements treaties considered on 14 May 2019
The Committee's report considers the agreement between the UK, Iceland and Norway on trade in goods. The agreement is only applicable in the event of a no-deal Brexit. The Committee notes that if the agreement came into effect it would significantly change the terms of UK trade with Norway and Iceland. The full report can be accessed here.
“While preserving tariff preferences, the Trade Agreement will significantly change the nature of the UK’s trade relationship with Iceland and Norway. It will not address non-tariff barriers to trade in goods, and trade in services is excluded entirely. Moreover, institutional arrangements and the enforcement mechanisms involved differ substantially. We recognise that the specific features of the EEA Agreement, designed to achieve economic integration through regulatory alignment, have severely limited the Government’s ability to transition existing arrangements with Norway and Iceland in the event of a ‘no deal’ Brexit. We therefore welcome the Parties’ intention to re-open negotiations on their trade relationship as soon as possible, should the Trade Agreement take effect, with a view to replacing it.”
FCA: Temporary permissions regime
FCA has confirmed that the deadline for notifications for the temporary permissions regime will be extended to the end of 30 October 2019. This would allow EEA-based firms passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation and also allow EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK. The deadline for applying to the Trade Repository and Credit Ratings Agencies has also been extended to the same date. For EEA payment services and e-money firms, the notification window for temporary permission is closed, but it will open again under the relevant HMT Regulations on 31 July and end on 30 October. FCA emphasises that it expect firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by exit day and, if firms are not ready, will expect to see evidence why this was not possible. Links to relevant updated webpages appear in this press release.
Other publications from the RegZone Brexit news feed
HoC: UK replacement of the EU's external agreements after Brexit
This HoC Library briefing considers agreements with non-EU countries that the Government is seeking to replace in the event of a no deal Brexit, some of which will not be in place by 31 October 2019. The briefing paper can be accessed here.
PMO: Statement by Theresa May
Text of Theresa May's statement of 24 May 2019 can be accessed here.
ECB: Speech by Luis de Guindos: Building the EU’s capital markets - what remains to be done
Text of this speech, given on 23 May 2019 follows, in which Luis de Guindos discusses aspects of the CMU, including with regard to Brexit. The text of the speech can be accessed here.
PMO: Statements by Theresa May
Texts of Theresa May's statements to HoC on 21 and 22 May 2019 can be accessed here and here.
HMT: Speech by Philip Hammond
Text of Philip Hammond's speech, given on 21 May 2019 follows, in which he discusses Brexit and business. The text of the speech can be accessed here.
BoE: Speech by Ben Broadbent: Investment and uncertainty: the value of waiting for news
Text of this speech, given on 20 May 2019 follows, in which Ben Broadbent discusses the impact of Brexit uncertainty on investment. The speech can be accessed here.
Courts and Tribunals Judiciary: Speeches by Sir Geoffrey Vos
The Courts and Tribunals Judiciary website has published two recent speeches by Sir Geoffrey Vos concerning the future for the UK’s jurisdiction and English law after Brexit and on LawTech, smart contracts and AI. The publication can be accessed here.
HoC International Trade Committee: EU trade policy
The Committee has convened a special session on EU trade policy on 22 May 2019 and has published a letter it has sent to Liam Fox with regards to the lack of progress on "rolling over" EU free trade agreements. The report can be accessed here.
HoC: Negotiations on the UK leaving the EU during the EU extension period
Ahead of a debate being held on 22 May 2019, this HoC Library briefing pack has been published. It can be accessed here.
ECB: Supervisory Newsletter
ECB's Supervisory Newsletter for May 2019 includes articles on Brexit; sustainable finance; money laundering; NEDs and cyber resilience. These may be downloaded individually via the following link.
EC: Conclusions of the 51st meeting of the EEA Council
The European Council has published a note on the meeting held on 20 May 2019. Topics include Brexit. The text can be accessed here.
ESMA: Meeting of SMSG
ESMA has now published the minutes of its SMSG's meeting of 11 April 2019. Topics include Brexit, MiFID, sustainable finance, credit rating agencies and market abuse. The full publication can be accessed here.
ESMA: Speech by Verena Ross: Transitions and challenges for European securities markets and their regulators
Text of this speech, given on 16 May 2019. Topics include: Brexit; benchmarks; MiFID II data and sustainable finance. The full speech can be accessed here.
FCA: Speech by Karina McTeague: Leading the way in regulation
Text of this speech, given on 15 May 2019 follows. Topics include IDD, sustainable business models, SMCR and Brexit. The full text can be accessed here.
ECB: Remarks by Benoît Cœuré: Exchange of views with members of the French Parliament
The ECB has published the text of remarks made by Benoît Cœuré at a meeting on 15 May 2019. He discusses ECB’s monetary policy and policies to raise the economic potential of the euro area and states "Brexit will further accentuate the need to develop and integrate the EU’s capital markets to prepare for the likelihood that the City of London will play a more reduced role in the future as a hub of European savings". The publication can be accessed here.
Department for Exiting the EU: The EU Withdrawal Agreement
Steve Barclay's letter to John Redwood of 14 May 2019 on the legal interpretation of certain aspects of the Withdrawal Agreement has been published. The letter can be accessed here.
EC: Delegated Regulation in relation to AMLD IV
Commission Delegated Regulation (EU) 2019/758 of 31 January 2019 supplementing Directive (EU) 2015/849 of the European Parliament and of the Council with regard to regulatory technical standards for the minimum action and the type of additional measures credit and financial institutions must take to mitigate money laundering and terrorist financing risk in certain third countries has been published in the Official Journal. The legislation can be accessed here.
FCA: Andrew Bailey: The future of regulation podcast
FCA has published a podcast in which Andrew Bailey discusses FCA's Business Plan and the post-Brexit future of regulation. Specific topics include Brexit, data analytics, consumer protection (including duty of care) and governance. This can be accessed here.
UK Finance: Brexit: some points for consideration in the weeks ahead
This blog from UK Finance expresses concern that "significant gaps exist in product and service provision for EU-based customers of UK-based services". The blog post can be accessed here.
HoC: Brexit – parliamentary scrutiny of UK replacement treaties
This updated HoC Library briefing considers the Government's treaty continuity programme. The briefing paper can be accessed here.
CMS RegZone publishes weekly updates (available via email, on-line and via Twitter) on Brexit developments for financial services firms. These provide analysis and commentary on significant developments during the week in question. A daily digest of Brexit news (without analysis or commentary) is also available by email here and online via the RZ news wizard here (both of these can be filtered using the Brexit topic). Links to publications are contained in each update; publications released before the updates commenced in April 2018 can be found in a bibliography here. CMS RegZone publication ‘Where we stand’ provides an overview of the current position in a single report; this is updated regularly to take account of the key developments from the weekly updates.