Tuesday, May 11, 2021
On 26 April 2021, draft Payment and Electronic Money Institution Insolvency Regulations (Regulations) were brought before the UK Parliament for approval. They will introduce a new special administration regime for insolvent payment institutions (PIs) and electronic money institutions (EMIs). The key purposes of the Regulations are to ensure that in the event of an institution’s insolvency (i) funds are returned to customers quickly and (ii) shortfalls in the amounts returned are minimised. Since 2018, six PIs and EMIs have entered insolvency but only one has returned customer funds. The Regulations are therefore considered necessary to give certainty to those looking after insolvent institutions (the special administrators) and to avoid having to go to court for further directions and so expedite returning customer funds.
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On 29 April 2021, the Financial Services Bill received Royal Assent in the UK, becoming law as the Financial Services Act 2021 (the “Act”). This is the first significant step for the UK in shaping its financial services regulatory framework following transition out of the European Union (“EU”), with HM Treasury affirming last week that the Act “will ensure the UK remains an open and dynamic financial centre, with the highest regulatory standards, and protect people across the UK as they use financial services”.
The Act makes extensive amendment to the current regime, including reforms in relation to the following matters:
Recent regulatory developments of interest to most financial institutions.
Contents
Tackling financial exclusion: House of Lords Liaison Committee follow-up report
Safe harbour provisions to support the wind-down of critical benchmarks: RFRWG letter
Net zero and the future of green finance: Treasury Committee report
UK Future Regulatory Framework Review: BoE speech on PRA policymaking
UK MiFID research and best execution reporting requirements: FCA CP21/9
Strengthening financial promotion rules for high-risk investments and firms approving financial promotions: FCA DP21/1
Compliance, culture and evolving regulatory expectations: FCA speech
Improving effective regulation: FCA speech
Why black inclusion matters: FCA speech
Climate change and sustainable finance: FCA webpage
On 28 January 2021, the FCA published a consultation (CP21/3) on the proposed changes to its onshored Technical Standards on Strong Customer Authentication and Common and Secure Methods.
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Recent regulatory developments of interest to most financial institutions, including updates from the UK government, PRA, FCA, JMLG and the European Commission.
Contents
UK FinTech and financial services plans
LC&F compensation scheme and complaints to FCA
Lessons from Greensill Capital: Treasury Committee inquiry
Diversity: BoE launches Meeting Varied People initiative
PRA authorisations: updates on rule waivers and modifications and CRR and Solvency II permissions
UK Investment Firms Prudential Regime: FCA second consultation CP21/7
FCA transformation programme: update to HM Treasury
FCA appoints sustainability and technology directors
FCA regulated fees and levies for 2021/22: CP21/8