Key Regulatory Topics: Weekly Update 1– 6 May 2020
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Our weekly update on key regulatory topics affecting the financial services sector.
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Brexit
Please see the Covid-19 section for a speech on the FCA's response to Covid-19 and Brexit.
Amended draft Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 laid before Parliament: Brexit SI
On 6 May, an amended draft version of the Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020, was published on legislation.gov.uk, together with a draft explanatory memorandum. It makes a number of amendments to address deficiencies in UK domestic law and retained EU law arising from the UK’s withdrawal from the EU, in line with the approach taken in other financial services EU exit instruments under the European Union (Withdrawal) Act. This instrument also revokes a number of pieces of retained EU law and UK domestic law, which would not be appropriate to keep on the statute book after the Transition Period, as they deal with cross-border activity within the EU and the functioning of EU institutions. Additionally, this instrument makes a small number of minor clarifications and corrections to previous financial services EU exit instruments.
HMT letter to European Scrutiny Committee on trade in financial services under the future UK-EU economic partnership
On 5 May, the Department for Exiting the European Union published a letter, from HMT (dated 23 April) sent to the European Scrutiny Committee to provide further clarity with regards to the Government's position on equivalence in financial services. HMT set out the UK Government's views, including on: (i) the envisaged nature and role of the 'institutional arrangement' on financial services; (ii) the UK's priority which is to seek equivalence across all the c.40 equivalence regimes which currently exist in EU; (iii) that it can see no reason why the UK and EU will not be able to find each other equivalent across all existing regime by the end of the transition period; and (iv) the EU’s interpretation of the requirements for “assurance” from CCP supervisors, and any interactions with “comparable compliance”..
Conduct
FCA offers extension to maximum period to cover absent Senior Managers - Covid-19:
On 6 May, the FCA has extended the maximum period firms can arrange cover for a Senior Manager without being approved, from 12 weeks to 36 weeks, in a consecutive 12-month period. The modification by consent rule SUP10.3.13R is available to all solo regulated firms. It aims to provide flexibility to firms managing their governance arrangements during the coronavirus pandemic. It also reduces their administrative burden by removing the need for firms to submit Form A applications or Form Js and Statement of Responsibilities notifications. It also allows firms to allocate an absent Senior Manager’s prescribed responsibilities to the individual covering the role (a modification to SYSC 24.1.2). Firms can use the modification by consent if, for example, a Senior Manager is absent because of coronavirus, or recruitment to replace a Senior Manager is delayed due to the coronavirus pandemic. Firms can apply for the modification by consent as a precautionary measure, in advance of actually needing it. The modification by consent will take effect from the date the firm applies for it, and will end on 30 April 2021.
Consumer/retail
FCA update on customer access to restricted savings – Covid-19
On 5 May, the FCA updated its Covid-19 webpage to set out its expectations of firms handling requests from customers to withdraw funds in accounts with restrictions on access in the light of the pandemic. During the coronavirus crisis, consumers may find themselves needing access to their savings in accounts with restrictions on access. The FCA expects firms to: (i) pay due regard to the interests of their customers and treat them fairly (see Principle 6 and BCOBS 5.1); (ii) communicate in a way that is clear, fair and not misleading (see Principle 7 and BCOBS 2.2); and (iii) consider the needs of vulnerable customers in their actions or communications (see Principles 6 and 7). Meeting these obligations does not require firms to offer access to all customers, or to offer unlimited access to funds in a restricted-access account. However firms should also be aware that for some people the impact of coronavirus is likely to exacerbate the personal circumstances that can cause vulnerability. The FCA welcomes the steps several firms have already taken to allow access and to waive penalty fees or charges on restricted savings products.
FCA Statement on mortgage prisoners and letter to mortgage lenders and administrators – Covid-19
On 1 May, the FCA published a statement explaining its ongoing work to support mortgage prisoners. The rules, based on pre-coronavirus conditions, require firms to write to those who may be eligible letting them know they may be able switch their mortgage. Realistically, the current economic conditions mean that lenders are not yet in a position to offer new options for borrowers. However, given lenders’ inability to offer new switching options to mortgage prisoners it would be wrong to require letters to be sent to consumers at this time. The FCA is therefore extending the window during which it expects firms to contact consumers about switching options by 3 months. The FCA does not want mortgage prisoners to receive communications encouraging them to switch, when there are no suitable products available for them. The FCA has also written to some firms in order to reiterate that customers on variable rate mortgages taken out before the financial crisis with higher risk characteristics must be treated fairly, and that lenders should be actively reviewing their rates. In particular, in respect of firms administering books on behalf of lenders, the FCA is reminding them of their obligation to treat customers fairly where they have discretion to set rates on behalf of the lender. The FCA will act where it sees outlier rates and consider their practices to be unfair.
Covid-19 coronavirus
Please see the other sections for product specific updates relating to Covid-19.
Please see our dedicated Covid-19 webpage containing links to a number of articles and insights to keep up-to-date with developments and assist with effective contingency planning.
FCA speech on response to Covid-19 pandemic and Brexit
On 6 May, the FCA published a speech by Nausicaa Delfas, FCA Executive Director of International, on the FCA's response to Covid-19 and Brexit. Ms Delfas summarises the FCA's response to the pandemic: (i) the FCA has been working with partners nationally and internationally to keep markets open and orderly by easing operational pressures on firms; (ii) help firms continue to operate by building 'financial bridges' until longer term Government support is in place; (iiii) protect consumers and small businesses by tackling scams and ensuring fair treatment; and (iv) to maintain high standards of conduct. Ms Delfas identifies three emerging trends in international financial regulation: (1) markets and their participants will face growing funding and lending challenges as the economic impact of the crisis is felt over time; (2) firms’ operational resilience - given the UK’s large global markets and the outsourcing arrangements of many UK firms with significant operations in other countries, it is particularly important for the FCA address any increased vulnerability to disruption from unexpected events; and (3) the interconnectedness of the global financial system highlights that the ability of financial intermediaries to manage their liquidity risks depends on continued credit flows, their ability to raise capital, and a willingness of lenders to keep lending during times of uncertainty. With regards to Brexit, Ms Delfas amongst other things: (a) summarises its ongoing work to ensure as smooth a transition as possible such as the TPR; (b) identifies two broad areas where multilateral action is required - reciprocal equivalence and cross-border continuity issues.
FCA: Updated statement on CBILS and BBLS
On 4 May, the Bounce back Loan Scheme (BBLS) formally launched. This statement sets out the FCA’s approach to its regulation of firms in relation to the Government’s Coronavirus Business Interruption Loan Scheme (CBILS) and the new BBLS. The statement applies to any loan made under the Schemes by an ‘accredited lender’ from 4 May. As an interim measure pending the roll-out of the BBLS scheme, if firms complied with the relevant requirements of CBILS as announced, the FCA did not expect them to comply with CONC 5.2A.4-34 where the lending is regulated. Following the launch of BBLS, the FCA is confirming this position will remain applicable to regulated lending that continues to take place under CBILS. The statement also contains a note on how to balance financial crime risks against the need for the fast and efficient release of funds.
FCA- FOS Correspondence on CBILS and BBLS:
On 4 May, the FCA and FOS exchanged letters on the FOS's approach to dealing with complaints concerning the CBILS and the BBLS. The FCA are aware that accredited lenders will want clarity on the question of how the ombudsman service will view lender behaviour under BBLS, which came into force on 4 May, and the changes to CBILS which were made on 27 April. It therefore provides an overview of the key aspects of the schemes to ensure lenders have this clarity: (i) the new regulatory arrangements for BBLS; (ii) the new approaches to creditworthiness assessments under CBILS; and (iii) how the FCA understands that the FOS will approach complaints arising from lending under the schemes considering the current circumstances - the FCA refers to the FOS' duty to resolve complaints according to what is fair and reasonable under DISP 3.6.4R and notes the FCA's understanding that the FOS will give due weight to the fact that firms must comply with the schemes' requirements. The FOS in its response, confirms acknowledgement of the above and that the FCA’s understanding of how the FOS will approach related complaints is correct.
LSB Update to Standards of Lending Practice in response to BBLS and CBILS
On 4 May, the Lending Standards Board (LSB) published an update of its Standards of Lending on Product Sale and related Information for Practitioners in response to the government's changes to the CBILS and the BBLS. In addition, the LSB have added a positioning statement to the Standards to clarify that the requirements of the Government’s schemes supersede relevant provisions set out within the Standards. Similar updates will be included in the Standards of Lending Practice for business customers – asset finance, to take account of the CBILS.
FSMA 2000 (Regulated Activities) (Coronavirus) (Amendment) Order 2020 published
On 1 May, the Financial Services and Markets Act 2000 (Regulated Activities) (Coronavirus) (Amendment) Order 2020 (The Order) was published. The Order came into force on 4 May. This Order amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO) with the purpose of removing from the scope of the consumer credit regulatory regime, loans of £25,000 or less that are made by commercial lenders to sole traders, unincorporated associations and partnerships of fewer than four people under the BBLS.
Financial crime
FCA expectation on firms' financial crime systems and controls during the Covid-19 pandemic
On 6 May, the FCA published a new webpage on its expectations on how firms should apply their systems and controls to combat and prevent financial crime during this crisis. The FCA explains that while the current climate may give rise to operational challenges in relation to financial crime systems and controls, firms should not seek to address operational issues by changing their risk appetite - but reprioritising or delaying certain activities such as ongoing customer due diligence or transaction monitoring alerts could be reasonable. Where a firm is collecting information from an existing customer, Regulation 31 of the MLRs requires the account to be closed where the information is not provided. However, in the current situation, the FCA expect firms to make reasonable efforts to collect this information or consider whether there are other ways of being reasonably satisfied with the customer’s identity, before taking a decision to close the account. All decisions must be clearly risk assessed and documented. The FCA also provides examples of how firms' can meet their client identity verification obligations within the flexibility offered by the current rules, while the restrictions on travel remain.
FCA updates Covid-19 webpage with Information Security section
On 6 May, the FCA updated its Covid-19, information for firms webpage with a new section on what it expects of firms in relation to information security. In the UK, the National Cyber Security Centre has detected more UK Government branded scams relating to coronavirus than any other subject. As more organisations enable their employees to work from home, online systems are becoming increasingly mission critical and cyber criminals are exploiting the situation for their own gain. While alternative ways of working may be needed to enable business continuity, the FCA expects firms to prioritise information security and ensure that adequate controls are in place to manage cyber threats and respond to major incidents. Firms should look to implement enhanced monitoring to protect end points, information and firm critical processes, including network connections and video conferencing software. The FCA provides an example of activities that it expects firms to proactively take to manage increased risk during this period.
FATF on Covid-19-related Money Laundering and Terrorist Financing Risks and Policy Responses
On 5 May, FATF published a paper on Covid-19-related Money Laundering and Terrorist Financing Risks and Policy Responses. Using information provided to the members of the FATF Global Network, this paper identifies challenges, good practices and policy responses to new money laundering and terrorist financing threats and vulnerabilities arising from the Covid-19 crisis. The crisis has led to an increase in Covid-19-related crimes, including fraud, cybercrime, misdirection or exploitation of government funds or international financial assistance, which is creating new sources of proceeds for illicit actors. Covid-19 has also had an impact on government and private sectors' ability to implement AML/CFT obligations leading to an increase in certain risks. This paper provides examples of policy responses, which include: domestic coordination to assess the impact of Covid-19 on AML/CFT risks and systems; strengthened communication with the private sector; encouraging the full use of a risk-based approach to customer due diligence; and supporting electronic and digital payment options.
Fintech
FCA announces pilot of Covid-19 ‘digital sandbox’
On 4 May, the FCA on a new webpage announced its intention to bring forward its plans to develop a digital sandbox to provide enhanced regulatory support to innovative firms tackling challenges caused by the Covid-19 pandemic. A digital sandbox will allow innovative firms to test and develop proofs of concept in a digital testing environment. By accelerating its plans, the FCA plans to pilot aspects of the digital sandbox on a modular basis to provide support to innovative firms during the crisis. The sandbox may include: (i) access to high-quality data assets including synthetic or anonymised data sets to enable testing and validation of technology solutions; (ii) a regulatory call-to-action to tackle a specific challenge; (iii) a collaboration platform; (iv) a method of allowing observation of in-flight testing at a technical level; (v) an application programming interface (API) or vendor market place; and (vi) access to regulatory support – such as development of testing plans, signposting to relevant regulations, informal steers or support to understand the wider regulatory environment or the authorisation process. The FCA welcomes expressions of interest and feedback and plans to open applications later in the summer.
Markets and markets infrastructure
ESMA reminds firms of conduct of business obligations under MiFID II
On 6 May, ESMA published a statement, highlighting the risks to retail investors when trading under these unprecedented market circumstances in response to several NCAs having recently noticed a significant increase in retail clients’ trading activity. The financial market turmoil following the Covid-19 pandemic has led to high market volatility and an increase in market, credit and liquidity risks. ESMA therefore reminds firms of their obligation to act in accordance with the best interests of their clients, and points to the most relevant conduct of business obligations under MiFID II, namely product governance, information disclosure, suitability and appropriateness. In the statement ESMA reminds firms of the specific actions firms must be taking in order to comply with these obligations.
ESMA consults on SME Growth Markets
On 6 May, ESMA began consulting on the functioning of the SME Growth Market regime in the EU and on two draft technical standards, introduced by the amendments to MAR for the promotion of the use of SME Growth Markets. In the context of the MiFID II review on the functioning of SME Growth Markets in the EU, ESMA seeks stakeholders' views on proposed amendments to the regime which aim to further improve it. It is seeking stakeholders’ view on one draft technical standard on liquidity contracts and one on the insider list for SME Growth Markets issuers which aim to alleviate the administrative burdens of trading on public markets for SMEs, while at the same time safeguarding market integrity. ESMA intends to submit the MiFID II final report to the EC by the end of the year and the MAR final report in the autumn. The deadline for comments is 15 July.
EBA proposes framework for STS synthetic securitisation
On 6 May, the EBA published its proposals for developing a simple, transparent and standardised (STS) framework for synthetic securitisations. This proposal, which is limited to balance-sheet securitisation, includes a list of criteria to be considered when labelling the synthetic securitisation as ‘STS' and provides the pros and cons of a potential differentiated capital treatment for this type of securitisation. The Report examines the rationale behind the STS synthetic product and assesses the positive and negative implications of its possible introduction. Based on this assessment, the EBA recommends establishing a cross-sectoral framework for STS synthetic securitisation that is limited to balance-sheet securitisation. Among the proposed STS criteria are requirements on simplicity, standardisation and transparency similar to those applied to traditional securitisation. In addition, the Report includes other relevant criteria for synthetic transactions, such as those for mitigating counterparty credit risk or for addressing various structural features of synthetic securitisation. Finally, the Report provides conclusions on the prudential treatment of STS securitisation, and in particular, the pros and cons of a potentially differentiated capital treatment for this type of securitisation to inform the EC's future legislative proposal for a STS synthetic securitisation.
FSB consults on guidance on assessing the adequacy of financial resources for CCP resolution
On 4 May, the FSB began consulting on guidance on financial resources to support central counterparty (CCP) resolution and on the treatment of CCP equity in resolution. The FSB explains that increased central clearing has simplified the previously complex and opaque web of derivatives exposures. In addition, more collateral is in place to reduce counterparty credit risks. At the same time, CCPs’ criticality to the overall safety and soundness of the financial system means that authorities must take steps to ensure that CCPs do not themselves become a source of systemic risk and that they can be successfully resolved without exposing taxpayers to loss. Part I of the guidance proposes five steps to guide the authorities in assessing the adequacy of a CCP’s financial resources and the potential financial stability implications of their use. Part II of the guidance addresses the treatment of CCP equity in resolution. It provides a framework for resolution authorities to evaluate the exposure of CCP equity to losses in recovery, liquidation and resolution and how (where it is possible) the treatment of CCP equity in resolution could be adjusted. The deadline for comments is 31 July.
Joint RTS on amendments to the bilateral margin requirements under EMIR in response to Covid-19
On 4 May, the ESAs (EBA, EIOPA and ESMA) published joint draft RTS to amend the Delegated Regulation on the risk mitigation techniques for non-centrally cleared OTC derivatives (bilateral margining), under the EMIR, to incorporate a one-year deferral of the two implementation phases of the bilateral margining requirements. The one-year deferral was agreed by the BCBS and IOSCO on 3 April in order to provide additional operational capacity for counterparties. The joint draft RTS replace entirely the version submitted to the EC prior to the crisis.
Joint Association letters on Margin Exemptions under EMIR
On 4 May, a number of trade associations including ISDA, AIMA and EBF, published two letters sent to the EC and ESAs to request that existing time-related exemptions under EMIR be extended. The first letter urges the above to consider amending the margin RTS to permanently exempt single-stock equity option or index option transactions, or to significantly extend the period of deferred application to allow further observation of developments in other jurisdictions and to avoid an unlevel playing field for EU market participants. The second letter emphasises the importance of intragroup transactions and requests: (i) that the necessary equivalence decisions be adopted in all jurisdictions that have implemented margin rules in line with the BCBS/IOSCO framework; and the draft revised margin RTS should be amended by the EC and ESAs so the current temporary derogation from margin requirements for intragroup transactions with non-EU affiliates in other jurisdictions be extended for a further three years.
Letter on Equity Options Derogation
Letter on Margin Intragroup Exemption
Payment systems and payment services
ECB update: T2-T2S consolidation project moves forward at full speed – Covid-19
On 4 May, the ECB provided an update on the TARGET2 (T2) - TARGET2-Securities (T2S) consolidation project. SWIFT intends to delay the original migration date to ISO 20022 for cross-border payments by one year, from November 2021 to the end of 2022. This would not affect the launch date of the Eurosystem Single Market Infrastructure Gateway (ESMIG) and T2, the new real-time gross settlement system, which are being developed and rolled out as part of the T2-T2S consolidation project and are scheduled to go live in November 2021. The possible delay in migration to ISO 20022 for cross-border payments would impact the plans to adopt ISO 20022 for correspondent banking business. European banks would need to adapt their strategies. In the interim period between November 2021 and the end of 2022, they would have to maintain their capability to send SWIFT Message Type (MT) payments and reporting messages in addition to the new infrastructure for ISO 20022. The ECB and SWIFT have jointly developed a plan to ensure data compatibility between cross-border payments sent with ISO 20022 and the MT message type.
PSR update on general expectations in light of Covid-19
On 1 May, the PSR published an updated version of its webpage on Covid-19. The PSR’s is closely monitoring the situation and the impact the coronavirus may have on its work now and how its response to it will affect the UK’s payment systems. The PSR is working closely with the Government, the BoE, and other regulators to make sure work is coordinated and aligned with other authorities so that the industry has clear direction during this time. The PSR expects firms to be taking reasonable steps to ensure they are prepared to meet the challenges coronavirus could pose to customers and staff. Regulated parties should report to the PSR immediately if they believe they will be in difficulty or if circumstances could lead to them being unable to offer the full range of their services. Where the PSR has already made adjustments to its work and requirements, updates will be included on this page, for example its updated approach to Confirmation of Payee; where the deadline was for the Call for Input on competition in the UK's New Payments Architecture; and how it is working to support access to cash during the pandemic.
Prudential regulation
Please refer to the Markets and Market Infrastructure section for an overview of the EBA's proposals on a framework for STS synthetic securitisations.
EBA final Guidelines on CRM for institutions applying the IRB approach with own estimates of LGDs
On 6 May, the EBA published its final Guidelines on credit risk mitigation (CRM) in the context of the advanced internal ratings-based (A-IRB) approach. These Guidelines, which are part of the EBA's regulatory review of the IRB approach, aim to eliminate the remaining significant differences in approaches in the area of CRM, which are due to either different supervisory practices or bank-specific choices. The Guidelines clarify the application of the CRM provisions currently laid down in the CRR applicable to institutions using the A-IRB Approach. For funded credit protection, the Guidelines provide a mapping to the eligibility requirements of legal certainty and collateral valuation applicable to institutions using the standardised approach (SA) and the foundation internal ratings-based (F-IRB) approach.. The Guidelines also clarify how institutions may recognise the effects of different CRM techniques for capital requirement purposes. The EBA has granted one extra year, until 1 January 2022, to the final implementation date of these Guidelines to align with the proposal of the EBA progress Report on the IRB roadmap.
EBA final Guidelines on the methodology to determine the weighted average maturity of contractual payments due under the tranche of a securitisation transaction
On 4 May, the EBA published it final Guidelines on the determination of the weighted average maturity (WAM) of the contractual payments due under the tranche of a securitisation transaction, as laid down in the CRR. The maturity of the tranche is an additional parameter introduced by the revised Securitisation Regulation that is needed by institutions using the internal or the external rating based approach for the calculation of the risk-weighted exposure amounts of their securitisation positions. These Guidelines aim at ensuring that the methodology applicable for the determination of the WAM for regulatory purposes is sufficiently transparent and harmonised in order to increase consistency and comparability in the own funds held by institutions. The main areas covered by the guidelines are: (i) the meaning of contractual payments due under the tranche; (ii) data and information requirements; (iii) methodologies for determining the contractual payments of the securitised exposures due under the tranche both for traditional and synthetic securitisations; and (iv) implementation and use of the WAM mode. The guidelines will apply from 1 September 2020.
EBA final draft ITS on specific reporting requirements for market risk
On 4 May, the EBA published its final draft ITS on specific reporting requirements for market risk, introducing the first elements of the Fundamental Review of the Trading Book (FRTB) into the EU prudential framework by means of a reporting requirement. The ITS are expected to apply from 1 September 2021, a delay in response to the Covid-19 pandemic. The specific reporting requirements for market risk include a thresholds template, providing insights into the size of institutions’ trading books and the volume of their business subject to market risk, and a summary template, reflecting the own funds requirements under the alternative standardised approach for market risk (MKR-ASA). At a later stage, and in line with the mandate of Article 430b of the amended CRR, these reporting requirements will be complemented with details on the own funds requirements under the MKR-ASA and the alternative internal model approach. Those reporting requirements will become part of version 3.1 of the EBA reporting framework.
Press Release (with links to Annexes to draft ITS)
EBA updated ITS package for 2021 benchmarking exercise includes IFRS9 template
On 4 May, the EBA published an update to its ITS on benchmarking of internal approaches, which includes all benchmarking portfolios that will be used for the 2021 exercise. The main novelty is the inclusion of the IFRS9 template. In order to analyse potential sources of variability stemming from the implementation of IFRS 9, two annexes have been introduced. The collection of quantitative data on the IFRS 9 parameters will contribute to gather a better understanding of the different methodologies, models, inputs and scenarios, which could lead to material inconsistencies in expected credit loss (ECL) outcomes, and affect own funds and regulatory ratios. On the credit risk side, neither new portfolios nor new data points have been added compared to the 2020 exercise. However, some marginal changes have been applied in annex I. For the market risk benchmarking, some instruments have been updated and clarified but the overall composition of the portfolio has not changed with respect to the 2020 exercise. The EBA believes that under the current circumstances, the usefulness of this exercise has increased. From a supervisory perspective, it will help maintain the high quality of internal models. From the regulatory point of view, it will continue to be used to monitor the models’ behaviours and sensitivity to a stressed economic situation, as well as the implementation of the forthcoming regulatory products along the IRB road map.
PRA statement on credit risk mitigation eligibility and leverage ratio treatment of loans under BBLS
On 4 May, the PRA set out its observations on the risk weighted treatment of exposures under the BBLS, particularly eligibility for recognition as unfunded credit risk mitigation (CRM) under the Capital Requirements Regulation (CRR). It considers that the terms of the guarantee provided under the BBLS do not contain features that would render these guarantees ineligible for recognition as unfunded credit risk protection, and the effects of these guarantees would appear to justify this treatment. The PRA also set out a change to the UK leverage ratio framework. The PRA is offering a modification by consent for banks subject to the UK Leverage Ratio Part of the PRA Rulebook to exclude loans under BBLS the leverage ratio total exposure measure. The modification permits firms to exclude loans made pursuant to schemes of a similar character which are 100% guaranteed by a government or central bank of an EEA state or the ECB provided that such loans do not exceed €60,000 per loan. The PRA will consider further modifications for substantively similar EEA schemes which do not meet these criteria on a case-by-case basis. Any bank that wishes to take up the modification by consent should read the related direction and contact the PRA's authorisation division.
Sustainable finance
HoC EU Committee letter to government on domestic sustainable taxonomy regime for investment products
On 4 May, the HoC European Union Committee (the Committee) published a letter (dated 30 April) to John Glen, Economic Secretary to the Treasury, on the EU's Taxonomy for sustainable investment. The Committee notes that the practical impact of the EU's newly adopted framework for classifying investments by sustainability is untested and uncertain, and that those with an interest in “green finance” will take a close interest in the EC's review of this novel approach in 2022. The Committee notes that the Regulation is not expected to apply in and to the UK given that even before the coronavirus crisis it was due to become applicable only at the end of 2021, well beyond the scheduled end of the post-Brexit transition period. The Committee therefore ask for clarification, by the end of May, as to whether the Government is considering establishing a similar legally-binding Sustainability Taxonomy domestically for investment products.
Other developments
FCA Handbook Notice 76 – Covid-19
On 1 May, the FCA published Handbook Notice 76, setting out the changes made to the FCA Handbook by the FCA Board from 3 to 30 April by: (i) COVID-19: Deferral of Commencement (Pension Transfers, Investment Pathways, Platform Switching, Access to Insurance) Instrument 2020; (ii) COVID-19 Credit Cards and Personal Loans Instrument 2020; (iii) COVID-19 Motor Finance and High Cost Credit Instrument 2020; (iv) COVID-19 Mortgages Instrument 2020; and (v) Pension Guidance and Relevant Provisions (Miscellaneous Amendments) Instrument 2020.
FCA Policy Development Update: May 2020
On 1 May, the FCA updated its policy development update webpage, which sets out information on recent and future FCA publications. Upcoming publications this year include: (i) consultation on exit fees in investment platforms and comparable firms; (ii) Open-ended Investment Companies -Proposals to facilitate standard listing; and (iii) Single Easy Access Rate – policy or final statement to consultation paper 20/1.