UK financial regulatory forum unveils new initiatives

By on 24/09/2020
HM Treasury is an 'observer member' of the forum, which aims to "identify and address" peaks in regulatory demands made on the private sector. (Photo by falco via Pixabay).

The UK’s Financial Services Regulatory Initiatives Forum has unveiled the first update of a ‘grid’ mapping out significant forthcoming regulatory initiatives.

The forum was launched six months ago and aims to improve the way that HM Treasury and regulators work together to “identify and address” peaks in regulatory demands made on the private sector, and to help organisations to plan. The Bank of England (BoE); Prudential Regulation Authority; Financial Conduct Authority (FCA); Payment Systems Regulator (PSR); and Competition & Markets Authority (CMA) are founding members; and the Treasury is an ‘observer member’.  

The group published its first grid ahead of schedule in May “to help firms stretched by the impact of coronavirus”.

The updated Regulatory Initiatives Grid contains 111 initiatives, an increase on the 85 included in the first edition. The increase reflects the inclusion of initiatives from newly-announced members, the Information Commissioner’s Office (ICO) and the Pensions Regulator and also the grid’s extension to cover a two-year time period.  

In addition, the grid’s compilers note that “given the number of initiatives paused or delayed over the past few months [due to coronavirus], fewer initiatives have fallen out of the grid, by virtue of completion, than might typically be expected”.

The forum is co-chaired by the FCA’s interim chief executive, Christopher Woolard, and the BoE’s deputy governor for prudential regulation, Sam Woods. In their foreword to the new grid, they said that the first grid “was notable for its focus on what would not be happening: initiatives that had been delayed or cancelled in response to the COVID-19 crisis”.

The updated edition “begins to establish a more typical forward look for users,” the duo said. But they warned: “We say ‘begins’, because we acknowledge that significant uncertainty persists in the environment in which the financial services industry is operating. We remain alert to the operational disruption facing the industry because of COVID-19 and the ways that might develop as we enter the winter. We stand ready to make further adjustments to the regulatory pipeline as necessary.”

‘Degree of disruption possible’ as Brexit transition period ends

The revised grid is published against not only the backdrop of the pandemic but also the forthcoming end of the transition period for the UK’s exit from the European Union at the end of December. Woolard and Woods said: “Forum members and industry have taken extensive action to mitigate the risks associated with an end to the transition period should it not be accompanied by new arrangements for financial services. Nonetheless, a degree of disruption remains possible, including disruption that cannot be fully anticipated. Again, we stand ready to act in whatever way the pursuit of our regulatory objectives demands.”

A number of initiatives highlighted in the 25-page grid relate to EU rules. These include the UK’s approach to transposing the EU’s Capital Requirements Directive (CRD) V and Bank Recovery and Resolution Directive (BRRD) II; and the UK government’s planned review of the EU’s Solvency II regime for insurers and reinsurers.

Non-EU-related initiatives covered by the grid include: the phase out of LIBOR (London Interbank Offered Rate) by the end of 2021; and planned consultations on implementation of the reformed Basel 3 banking standards (known as ‘Basel 3.1’) during 2021. It was announced in March that the international implementation deadline for Basel 3.1 would be delayed by one year because of COVID.

The creation of the Financial Services Regulatory Initiatives Forum and the grid are tangible manifestations of attempts to improve co-ordination between government and regulators instigated by the Financial Services Future Regulatory Framework Review announced last year.

About Ian Hall

Ian is editor of Global Government Fintech a sister publication to Global Government Forum. Ian also writes for media including City AM and #DisruptionBanking. He is former UK director for the pan-European media network Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in Bulgaria at English-language weekly the Sofia Echo. Ian has an MA in Urban and Regional Change in Europe and a BA in Economics, both from Durham University.

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