FCA updated webpage on GI value measures

The FCA has updated its webpage  on its general insurance (GI) value measures. The FCA has launched its fourth GI value measures pilot. Participating insurers will report value measures data on claims frequencies, claims acceptance rates, and average claims pay-outs. The FCA will publish the data in Q1/2020. 

FCA publishes complaints data for H1 of 2019

The FCA has published  the complaints figures for regulated firms for the first half (H1) of 2019. The data showed an increase in complaints from 3.91m in the second half (H2) of 2018 to 4.29m for the first half (H1) of 2019. The increase in complaints was mainly driven by a 34% increase in the volume of payment protection insurance (PPI) complaints received; PPI complaints made up 49% of all complaints received during the period.

EU Exit: FCA updates Brexit guidance on data sharing

The FCA has updated its webpage on preparing firms for Brexit to include further information on data sharing. The FCA advises that the UK Government has taken action to ensure that if the UK leaves the EU after 31 October with no deal, UK firms will continue to be able to legally send personal data from the UK to the EEA and 13 countries deemed adequate by the EU. The FCA notes that the position for transfers of personal data from the EEA to the UK has not been made clear. 

FCA Regulation round-up October 2019

The FCA has published its Regulation round-up for October 2019. The round-up includes a reminder for firms to register for Connect and a call for individuals to join the working groups of the Industry Delivery Group, set up by the Money and Pensions Service (MaPS), to help develop the pensions dashboard. 

PRA consults on supervising liquidity and funding risks

The PRA has published  a consultation paper (CP27/19) setting out proposals to update Supervisory Statement 24/15 (SS24/15) 'The PRA's approach to supervising liquidity and funding risk' to include updates to the Bank of England's (BoE) Market Operations Guide  and to reiterate relevant expectations set out in SS9/17 'Recovery planning'. Proposed updates include:

  • there should be no presumptive order in which firms should use the BoE's liquidity facilities, including the Discount Window Facility (DWF), or draw down their own liquid asset buffers to meet a liquidity need; and
  • where firms view central bank liquidity facilities as part of the their liquidity risk management strategy, the PRA would expect this to be included as part of the credible recovery options outlined in recovery plans.

CP27/19 is relevant to PRA-authorised UK banks, building societies, and PRA-designated UK investment firms. The consultation closes on 17 November 2019. 

FCA/HMT/BoE joint MoU on equivalence and exemptions determinations

The Bank of England (BoE), FCA, and HM Treasury (HMT) have published a Memorandum of Understanding (MoU) in accordance with regulation 6 of the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019. The MoU sets out how they expect to coordinate their respective functions in relation to equivalence and exemption determinations. These are new functions that will be transferred to UK authorities in the context of the UK’s withdrawal from the European Union and will come into effect from exit day. 

Treasury Committee: formal process to request changes to perimeter of regulation needed

The House of Commons Treasury Committee has published the FCA's response to its thirty-fifth report of session 2017–19 entitled, 'The Work of the FCA: the Perimeter Regulations' in which the Committee recommends that the FCA be given the power and necessary remit to be able to formally recommend to HMT changes to the perimeter of regulation. The FCA shares the Committee’s view that there could be a more structured and transparent approach for identifying and engaging with HMT on perimeter changes. 

ESMA final report on data reported under EMIR 

The European Securities and Markets Authority (ESMA) has published  the final report on a peer review it conducted into supervisory actions of six National Competent Authorities (NCAs) regarding their approaches to enhancing the quality of derivative data reported under the European Market Infrastructure Regulation (EMIR). The peer review assessed how data quality is supervised under EMIR in the following areas:

  • NCAs’ supervisory approach to EMIR data quality;
  • Integration of EMIR data within the NCA’s overall supervisory approach; and
  • NCAs’ access, assessment and analysis of EMIR data quality.

ESMA has put forward several initiatives to improve the supervision of data quality in the short and long-term. The short-term initiatives include: revising NCAs’ annual Data Quality Review exercises and identifying how NCAs can regularly use the data as part of their overall supervisory approach. This peer review complements ESMA’s Data Quality Action Plan (DQAP). 

EBA CP on comprehensive Pillar 3 disclosures

The European Banking Authority (EBA) has launched  a consultation paper (EBA-CP-2019-09) on the new comprehensive Implementing Technical Standard (ITS) for financial institutions' public disclosure. The new ITS aim to reinforce market discipline, by increasing consistency and comparability of institutions' public disclosures, and to implement the Capital Requirements Regulation 2 (CRR2) regulatory changes in alignment with the revised Basel Pillar 3 standards.

Comments are requested by 16 January 2020. A public hearing on this consultation will take place at the EBA premises on 2 December 2019. This consultation paper is the first one of the deliverables that will be presented in a forthcoming EBA roadmap on institutions' Pillar 3 disclosures. That roadmap, which will be published in Q4 2019, provides an overview of the EBA Pillar 3 strategy, deliverables and timeline for the implementation of all the disclosure requirements included in the CRR2 and Bank Recovery and Resolution Directive 2 (BRRD2), including ESG risks and climate change related information, as well as the disclosure requirements for investment firms under the Investment Firms Regulation (IFR). [17 Oct 2019]

ECB publishes working group report on euro risk-free rates

The European Central Bank (ECB) has published a report  by the working group on the risk management implications of the transition from the current euro overnight index average (EONIA) to the euro short-term rate (€STR) and the inclusion of fallback rates for EURIBOR based on a €STR-based term structure methodology (i.e., the introduction of risk-free rates). The report focuses mainly on the risk management implications for banks, but also touches on additional challenges facing the asset management and insurance sectors. The analysis conducted consists of:

  • general risk management considerations;
  • risk management impact analysis of EONIA to €STR transition;
  • risk management impact analysis of €STR-based fallback rates for EURIBOR; and
  • additional risk management considerations for the asset management and insurance sectors.

The report should be read in conjunction with  Recommendations of the working group on euro risk-free rates on the EONIA to €STR legal action plan and  Report by the working group on euro risk-free rates on the impact of the transition from EONIA to the €STR on cash and derivatives products. 

ISDA publishes no-deal Brexit FAQs

The International Swaps and Derivatives Association (ISDA) has published  a set of no-deal Brexit FAQs which provide a high-level summary of the key impacts of a no-deal Brexit on the OTC derivatives market and ISDA documentation.  

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