Recent regulatory developments focussing on banking and finance.
Contents
End of Brexit transition period: BoE and SRB cooperation arrangement
MREL and resolvability for mid-tier banks: BoE extends deadline
MREL: BoE discussion paper
CRD V implementation and designation of firms within certain consolidation groups: PRA PS29/20
International banks: PRA CP2/21 on approach to branch and subsidiary supervision
Transposing BRRD II: PRA PS28/20
LIBOR transition: Working Group paper on credit adjustment spread methods for active transition GBP LIBOR referencing loans
SSM banks: ECB guide on supervisory approach to consolidation
SRB permission regime for reduction of eligible assets: SRB communication
BRRD: EBA second report on simplified obligations and waivers
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Recent regulatory developments of interest to insurers and their intermediaries. See also our General regulatory news in the Related Materials links.
Contents
General insurance pricing practices: FCA Q&A
COVID-19: FCA information on flood and storm claims
COVID-19: EIOPA consults on ORSA supervisory statement
End of Brexit transition period: Lloyd s underwriters trading rights
Cyber risk underwriting: IAIS report on challenges and supervisory considerations for sustainable market development
Solvency II: PRA CP1/21 on deep, liquid and transparent assessments, and GBP transition to SONIA
The UK Prudential Regulation Authority (PRA) has published a consultation paper, CP1/21, on deep, liquid and transparent (DLT) assessments and GBP transition to the Sterling Overnight Index Average (SONIA) under the Solvency II regime. CP1/21 is relevant to all UK Solvency II firms, including in respect of the Solvency II groups pr
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With the end of LIBOR drawing closer, the FCA, Bank of England and the Working Group on Sterling Risk-Free Reference Rates (the
Working Group) are encouraging market participants to actively transition from referencing LIBOR rates in their loan agreements to risk-free rates (such as SONIA). In this respect, one important aspect that market participants need to consider is the credit spread adjustment (
CAS) that will be required. Market participants use a CAS to mitigate the risk of value transfer when transitioning to risk-free rates due to the difference between LIBOR rates and the risk-free rates, caused by the lack of a credit risk premium in risk-free rates.
Bank Of England And UK Financial Conduct Authority: The Final Countdown: Completing Sterling LIBOR Transition By End-2021 Date
11/01/2021
After many years of preparation, 2021 is the critical year for firms to complete their transition away from LIBOR. The LIBOR administrator, ICE Benchmark Administration, is consulting on ceasing publication of all sterling LIBOR settings at the end of 2021, leaving just one year for firms to remove their remaining reliance on these benchmarks.
This issue touches numerous parts of the economy. LIBOR has been embedded in the financial system for many years, used to calculate interest in everything from corporate borrowing and intra-group transfers, to complex derivatives. It is also utilised in accounting practices, system infrastructure and other supporting functions. All of these will need to be ready to use alternative reference rates, such as SONIA, by the end of this year.
<p><span>The Working Group on Sterling Risk-Free Reference Rates, which is comprised of a diverse set of market participants, is working to catalyse a broad-based transition to SONIA by end-2021.</span></p>