FS regulatory affairs newsletter - Q1 2024
In this instalment of the FS regulatory affairs newsletter, our experts have summarised the significant updates firms should be aware of in the first quarter of 2024.
Mazars Regulatory Insights
Expert analysis on the latest regulatory insights in the UK.
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BoE - insights for climate-related financial risks
On 17 April 2024, the Bank of England (BoE) published an article with useful insights for financial institutions on using scenario analysis to measure climate-related financial risks.
UK vs US - Comparing Basel 3.1 implementations
The US unveiled its take on the BCBS Basel reforms on July 27th, 2023, calling it the “Basel III Endgame” (referred to as Basel 3.1 in the UK). This article outlines the key disparities between the US and UK approaches to implementing these reforms.
Data implications of Basel 3.1
The Prudential Regulation Authority (PRA) continues to emphasise the importance of the reliability and accuracy of regulatory data for banks and building societies. Data risk is named a main priority within the 2024 Dear CEO Letter and through the Transforming Data Collection initiative between the Bank of England and the Financial Conduct Authority.
Effective regulatory reporting assurance
Banks are expected to have robust governance and controls processes for the production of their regulatory returns. In particular, the PRA outlined its expectation that banks should perform independent testing and validation of their regulatory returns to ensure they are reliable and accurate. With the PRA’s increasing focus on regulatory reporting demonstrated through SREP reviews and S166s reviews,...
Reporting assurance for small & medium-sized banks
The Prudential Regulatory Authority (PRA) has outlined its expectations for the preparation of regulatory returns in The Dear CEO Letter (DCEO), which focuses on the “Thematic findings on the reliability of regulatory reporting”. Dated the 10th of September 2021, the letter highlights the PRA’s expectations for banks to submit reliable and accurate regulatory returns, and for the regulatory reporting...
Basel 3.1 video series
Basel 3.1 is the final set of amendments to the capital regime for banks after the Global Financial Crisis. The Prudential Regulation Authority (PRA) proposed that the implementation date for the changes would be 1 July 2025. In this series, we take a closer look at what firms need to consider before these reforms will be live in the UK.
Expectations ahead of final Basel 3.1 rules
Join our Banking Risk Consulting team as they reflect on the published near-final rules covered in PS17/23, as well as their expectations for credit risk and output floor requirements ahead of incoming policy.
The FCA’s Business Plan 2024/25
The Financial Conduct Authority (FCA) published its 2024/25 Business Plan on 19 March, setting out how it will deliver the final year of its three-year strategy. To fulfil the FCA’s objectives [1], the strategy seeks to reduce and prevent serious harm, set and test higher standards and promote competition and positive change.
Implementing the IFPR: key lessons for firms
On November 27th, the Financial Conduct Authority (FCA) published a second and final report with further observations on how firms are implementing requirements on the Internal Capital Adequacy and Risk Assessment (ICARA) process and reporting under the Investment Firms Prudential Regime (IFPR).
Operational opportunities and challenges
With the introduction of the Strong & Simple (S&S) regime, UK banks will be predominantly categorised as under either the S&S regime or the Capital Requirement Regulation (CRR). For firms considering whether to apply to the S&S regime a thorough evaluation of the respective regulatory implications of either approach is required.
Suspension of GAP sales & fair value
The agreement to pause sales of Guaranteed Asset Protection (GAP) insurance for 80% of the market was a big headline in February. It may have come as a shock to some but the FCA’s concerns with GAP insurance are nothing new, dating back to its 2014 Market Study. The FCA pointed to its 2022 value measures data and had given GAP firms a stark warning in September 2023 over fair value.
Anti-greenwashing rule & the insurance industry
The FCA introduced the anti-greenwashing rule (AGR), which comes into effect on 31 May 2024, as part of its supervisory kit to create a common understanding of the sustainability characteristics of products and services.
FS regulatory affairs newsletter – Q4 2023
In this instalment of the FS regulatory affairs newsletter, our experts present their analysis of regulatory developments of the fourth quarter of 2023.
FCA intervenes in the Motor Finance Sector
On 11 January, following the first decisions from the Financial Ombudsman Service (“FOS”) upholding complaints relating to “discretionary commission arrangements”, the FCA published its long-expected intervention relating to historic commission issues in the motor finance sector.
FS regulatory affairs newsletter – Q3 2023
Welcome to our recent instalment of the FS regulatory affairs newsletter. In this edition, we delve into the regulatory developments of the second quarter of 2023.
How can you support customers when handling claims
In July 2023, the Financial Conduct Authority (FCA) made changes to its handbook [1] to embed guidance on good outcomes for customers experiencing financial difficulties. This sits in ICOBS 2.7 and, whilst claims handling is not specifically mentioned, it is relevant to how you support your customers at the point of claim.
FS regulatory affairs newsletter – Q2 2023
In continuation of our previous FS regulatory affairs newsletter, this edition highlights the key regulatory updates from the second quarter of 2023.
IFPR - enhancing firms’ risk management practices
On February 27th, the Financial Conduct Authority (FCA) published a report highlighting key observations on the implementation of the Investment Firms Prudential Regime (IFPR) and its relation to the Internal Capital Adequacy and Risk Assessment (ICARA) process. This article outlines the four major themes in the FCA’s report and provides insights into how firms can improve their next ICARA process...
BoE's regulatory capital frameworks
The Bank of England (the Bank) shared its latest thinking on climate-related risks and regulatory capital frameworks in a report released on March 13, 2023. The report elaborates on six key findings and identifies areas for future research and discussion. However, the Bank does not introduce any policy changes in response to the report. Instead, it suggests further analysis is needed before introducing...
FS Regulatory affairs newsletter - Q1 2023
Following on from our previous edition of the FS regulatory affairs newsletter, this edition covers regulatory developments in the first quarter of 2023.
Introducing a UK Insurance Resolution Regime
In January 2023, HM Treasury published its consultation paper setting out proposals for the introduction of an Insurance Resolution Regime (IRR) for the UK insurance sector.
FCA’s Business Plan 2023/24
On 5 April 2023, the Financial Conduct Authority (FCA) published the 2023/24 Business Plan which sets out how the regulator will deliver the second year of its three-year strategy. We highlight the key areas of focus from the Business Plan below.
The CFRF’s Scenario Analysis Guide for Banks
The Climate Financial Risk Forum (CFRF) has shared a non-regulatory practitioner’s guide for banks and building societies on how to use scenario analysis to assess the financial impact of climate change and inform their strategy and business decisions.
FS regulatory affairs newsletter - Q4 2022
Following on from our Q3 2022 edition of the FS regulatory affairs newsletter, this edition covers regulatory developments in the fourth quarter of 2022.
Recovery and resolution
The 2008 Global Financial Crisis revealed that major banks were in fact ‘too big to fail’. They had grown so large and complex that they needed state support given the unfathomable economic consequences of their collapse. As a result, financial regulators have introduced robust prudential measures to try to prevent such a crisis from happening again. A critical element of these post-crisis reforms...
Bank of England Climate and Capital conference
The Bank of England formally engaged with the international financial community to discuss the role of regulatory capital in the management of climate risks.
FS regulatory affairs newsletter - Q3 2022
Following on from our Q2 edition of the FS regulatory affairs newsletter, this edition covers regulatory developments in the third quarter of 2022.
FCA Dear CEO letter: cost of living & insurance
On 29 September 2022, the FCA acknowledged the continued challenges faced by consumers and businesses alike from the rising cost of living. The latest Dear CEO letter acknowledged the recent Government measures but noted the continuing financial challenges faced, including higher costs (such as energy costs) and staffing issues.
Changes to the NGFS’s benchmark climate scenarios
The Network for Greening the Financial System (NGFS) published an amended, third set of climate scenarios on 6 September 2022. The key updates include incorporation of countries’ commitments to reach net-zero emissions, increased sectoral granularity and improved representation of physical risk, including acute risks.
FS regulatory affairs newsletter - Q2 2022
Following on from our Q1 2022 edition of the FS regulatory affairs newsletter, this edition covers regulatory developments in the second quarter of 2022.
FCA reminds lenders to support consumers
The FCA reminds lenders of expectations to support consumers in light of the rising cost of living
PRA’s 2022 priorities for banks operating in UK
The Prudential Regulation Authority (PRA) has distributed a Dear CEO letter to all international banks and deposit takers active in the UK. This letter is to ensure there is a continuous focus guided by the PRA’s supervision and highlight the PRA’s planned work for next year; and should be read in conjunction with the feedback from individual PSM letters.
FCA’s Business Plan 2022/23
On Friday 8 April 2022, the FCA released its 2022/23 Business Plan in line with its usual timings. The scene is set with Covid-19 continuing to provide uncertainty, rising costs (due to inflation, interest rates and geopolitical uncertainty) and the risk of serious financial problems for many people.
FS regulatory affairs newsletter - Q1 2022
Following on from our inaugural publication of the FS regulatory affairs newsletter in December last year, this second edition covers regulatory developments in the last three months.
PRA’s strong and simple regime
For many years, the PRA has been applying a proportional approach to both regulating and supervising smaller banks, but there is a marked difference as supervision has been more pronounced.
Priorities of the Payment Services Regulator
On 13 January 2022, the Payment Services Regulator (PSR) published its first formal strategy. The implementation of this five-year strategy will materially impact Payment Service Providers (PSPs) through increased focus on accessibility, protection, and competition.
Integrity of regulatory reporting
The end of 2021 saw the PRA deliver on its warning in the September 2021 ‘Dear CEO’ letter, that they would take a tough stance on banks and building societies that fail to meet expectations around reliable regulatory reporting.
Remuneration
All firms regulated by the PRA are required to identify Material Risk Takers, regardless of their size and must have adequate procedures and policies, including the risk assessments, allowing a proportionate identification of MRTs.
Updated reporting requirements for PRA firms
On 1 January 2022, the PRA’s Policy Statement PS22/21 'Implementation of Basel Standards' took effect.
FCA Consultation Paper CP21/36
On 7 December the FCA released CP21/36 - the highly anticipated second consultation which provides more detail on the FCA’s proposals for new standards of consumer protection and care in retail financial markets in the form of a ‘Consumer Duty’.
FCA’s Appointed Representative Regime
Following the Consultation Paper released on 3 December 2021 (CP 21/34), the FCA confirmed new rules on the Appointed Representatives regime.
FS regulatory affairs newsletter - Q4 2021
This inaugural edition covers the developments in the regulatory space over the past 12 months and highlights some of the main developments and areas of focus for the year ahead.
