Brexit news for financial services firms - from 6 July 2019 to 19 July 2019

United Kingdom

1. HMT: Launch Financial Services Future Regulatory Framework Review 

HM Treasury has launched the first phase of the Financial Services Future Regulatory Framework review. This phase will look at how coordination between the regulatory authorities could be improved. Future phases will look at what adaptation is needed as the UK leaves the EU. The review is seeking submissions in relation to the first phase. The Call for Evidence is available here. A press release is available here

2. TSC: Analysis of the Economic Impacts of the Current Key Scenarios for the UK’s Future Economic Relationship with the EU   

TSC has requested HMT and BoE to update their economic analyses of the impact of Brexit in differing scenarios, noting that information provided will be almost a year old at the 31 October Brexit deadline. TSC has published the full texts of the requests.

3. Draft Financial Services (Miscellaneous) (Amendment) (EU Exit) (No.3) Regulations 2019   

This draft SI has been laid before Parliament.

4. HoC: EU Preparations for a No-Deal Brexit

This updated HoC Library briefing considers the preparations being made by the EU in the event of a no-deal Brexit, including with regard to the financial services sector.

5. FCA: Speech by Andrew Bailey

Text of Andrew Bailey’s speech given at FCA’s annual public meeting on 17 July 2019 follows. Topics include: the future of regulation; Brexit; perimeter issues; SMRC; pensions and enforcement activity. Andrew Bailey reminded attendees that, ‘ Parliament has passed 60 statutory instruments relevant to the FCA with another 12 expected before 31 October’. He stated that:  ‘The FCA does not take a position on Brexit per se'’ but that the FCA continues to plan for a 'full range of outcomes.

Other publications from the RegZone Brexit news feed

EC: Council regulations (EU, EURATOM) 2019/1197 of 9 July 2019 on measures concerning the implementation and financing of the general budget of the union in 2019 in relation to the withdrawal of the United Kingdom from the union

This has been published in the Official Journal. The regulation is available here.

HoC: Brexit – parliamentary scrutiny of UK replacement treaties

This updated HoC Library briefing considers the Government's treaty continuity programme. It includes a table showing the current status with regard to the scrutiny of these treaties and what sort of scrutiny they have undergone, both in their precursor form as EU treaties and currently as replacement treaties.

HoC European Scrutiny Committee: 71st Report of Session 2017-19

Sections 3 and 6 the consider the implications of Brexit for the 2020 EU budget and EU preparations in the event of a no-deal Brexit respectively. The latter includes a table providing an overview of the most important Brexit preparedness and contingency measures proposed by the EU. The report is available here.

BoE: Financial Stability Report/Record of FPC meetings

BoE has published the latest Financial Stability report and the Records of the FPC meetings held on 13 June and 4 July 2019. Major issues covered include: Brexit, stress testing and developments in financial market infrastructure. A link to the transcript of Mark Carney's remarks at the press release for the report also follows. He highlights risks in relation to Brexit, open ended funds, benchmarks and climate change. A policy summary is available here. Opening remarks from Mark Carney.

FCA: Annual Report and Accounts 2018/19

FCA has published its Annual Report and Accounts, which looks back at its work over the year to 31 March 2019. FCA sets out details of its sector and cross-sector priorities, including Brexit; high-cost credit; PPI; scams and innovation initiatives. Alongside the main report, FCA has also published its annual reports on competition, diversity, enforcement and anti-money laundering, which may be downloaded via this link.

EBA: Report on the impact of fintech on payment institutions' and electronic money institutions' business models

EBA’s thematic report sets out observations on payment institutions’ and electronic money institutions’ strategies and business model changes, including the current trends and drivers, the different approaches to fintech, the interaction with "bigtech" firms and the level of implementation of innovative technologies. EBA suggests that institutions are adapting their business models to cope with the competitive pressure and PSD2 changes, but the report notes a number of challenges facing firms, including operation resilience, information and communication technology security, the impact of Brexit, regulatory changes and consumer education. The report is available here.


Italy: IVASS urges UK insurers to submit their hard Brexit plan

On 02 July 2019 IVASS (the Institute for the Supervision of Insurance) issued a letter addressed to UK Insurers pursuing business in Italy, asking to submit a plan on the measures adopted in case of hard Brexit (the “Letter”). Follow this link to read the full article.