Banking and finance regulatory news, December 2020

Parts 1 to 3 and Chapter 3 of Part 4 of the Regulations, which relate to elements of BRRD II that the UK intends to retain, come into force on 28 December 2020. Part 4, which relates to amendments which correct deficiencies in UK legislation relating to bank resolution arising from Brexit, comes into force on IP completion day, with the exception of Chapter 3. Part 5, which contains provisions relating to elements of BRRD II that the UK does not intended to retain, comes into force on 28 December 2020, but ceases to have effect on IP completion day.

Financial Holding Companies (Approval etc) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020

The Financial Holding Companies (Approval etc) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (SI 2020/1406)[3] have been published, together with an explanatory memorandum[4]. The Regulations implement the Capital Requirements Directive V (CRD V) which amends the EU Capital Requirements Directive IV (CRD IV).

As HM Treasury’s implementation of CRD IV delegated significant responsibility to the Prudential Regulation Authority (PRA), these Regulations only contain provisions which are legislatively necessary to update the UK’s implementation of CRD IV (to reflect the amendments to CRD IV that have been made by CRD V). This includes providing the PRA with new or updated powers to implement CRD V, and to ensure that the PRA can update its rulebook as needed.

In addition, the Regulations address deficiencies in retained EU law arising from the withdrawal of the UK from the EU.

Regulations 1, 4, 5(5) and 9 to 20 came into force on 27 November 2020. Regulation 2(7) (which inserts a new Part 12B (Approval of certain holding companies) into the Financial Services and Markets Act 2000 (FSMA) comes into force on 28 December 2020 to the extent necessary for making rules under new section 192V of FSMA, and on 29 December 2020 for all other purposes. The other provisions in the Regulations come into force on 29 December 2020.

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