March 2023

Welcome to the latest edition of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Regulatory Horizons

Our new issue of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Regulatory Horizons brings you the latest industry and regulatory updates affecting financial services firms across the EU and UK. This publication complements our UK-specific Regulatory Radar series.

The bigger picture

As the cost-of-living crisis continues to squeeze consumers and global geopolitical tensions rise/persist, financial services firms are functioning within an increasingly challenging environment.

In its latest trends, risks and vulnerabilities  (PDF 930 KB), ESMA noted that risks in its remit remain elevated, with particular concerns around markets and liquidity. Despite similar issues also impacting insurers (notably relating to the macro and market environment), EIOPA's latest found that the sector remains resilient.

The EU-UK relationship continues to evolve but the long-term implications for market access and any potential equivalence decisions remain highly uncertain. A recent  (PDF 1.33 MB) commissioned by the European Parliament's Committee on Economic and Monetary Affairs (ECON) foresees only a “limited useâ€� of the EU equivalence regime for the UK.

Within this broader context, governments and supervisors have been publishing new policies and frameworks, alongside clarifications and supplementary guidance for existing and legacy rules.

The volume of publications by regulators on both sides of the Channel points towards increased divergence between UK and EU regulatory regimes. In the UK, the Government published its proposed Edinburgh Reforms package, regulators updated their “â€�, the FCA launched a discussion paper on a broad range of  regarding the future of UK asset management regulation, and the PRA is  on the liquidity and disclosure requirements for its “Strong and Simpleâ€� regime for non-systemic banks.

Meanwhile, the EU co-legislators continue to progress negotiations on various important files. These include the CRR3 proposals, AIFMD review, the Corporate Sustainability Due Diligence Directive, MiFIR and MiFID II. We are tracking the progress of these developments and regulatory divergence in the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Regulatory Barometer.

Focus on the detail � articles in this edition

This edition of Regulatory Horizons focuses on some of the most critical developments. Read more via the links below:

Highrise glass mirror building
Highrise glass mirror building
EIOPA takes aim at brass plates and empty shells
EIOPA takes aim at brass plates and empty shells
EIOPA has published a supervisory statement on the use of governance arrangements in third countries. It aims to ensure that insurers and intermediaries have appropriate substance in the EEA.

EIOPA has published a supervisory statement on the use of governance arrangements in third countries. It aims to ensure that insurers and intermediaries have appropriate substance in the EEA.

EIOPA has published a supervisory statement on the use of governance arrangements in third countries. It aims to ensure that insurers and intermediaries have appropriate substance in the EEA.

EIOPA has published a supervisory statement on the use of governance arrangements in third countries. It aims to ensure that insurers and intermediaries have appropriate substance in the EEA.

circular white abstract spiral
circular white abstract spiral
Basel 4 | Moving the dial
Basel 4 | Moving the dial
Despite other jurisdictions (like the UK) remaining closely aligned to the original Basel text, MEPs� proposals are significantly watered down –consequently leaving the EU at risk of being labelled ‘an international outlier� or even ‘non-compliant�.

Despite other jurisdictions (like the UK) remaining closely aligned to the original Basel text, MEPs� proposals are significantly watered down –consequently leaving the EU at risk of being labelled ‘an international outlier� or even ‘non-compliant�.

Despite other jurisdictions (like the UK) remaining closely aligned to the original Basel text, MEPs� proposals are significantly watered down –consequently leaving the EU at risk of being labelled ‘an international outlier� or even ‘non-compliant�.

Despite other jurisdictions (like the UK) remaining closely aligned to the original Basel text, MEPs� proposals are significantly watered down –consequently leaving the EU at risk of being labelled ‘an international outlier� or even ‘non-compliant�.

Man snow hiking on mountain banner
Man snow hiking on mountain banner
PRA consultation on final Basel reforms
PRA consultation on final Basel reforms
After a long wait, the PRA has published its proposals for implementing remaining Basel 3 standards. Compared to the EU’s CRR3 proposals, this UK interpretation is much more closely aligned to the original Basel standards. The consequent divergence will mean that firms operating in both jurisdictions will either need to align to the UK’s stricter regime across all models or run two sets of standards.

After a long wait, the PRA has published its proposals for implementing remaining Basel 3 standards. Compared to the EU’s CRR3 proposals, this UK interpretation is much more closely aligned to the original Basel standards. The consequent divergence will mean that firms operating in both jurisdictions will either need to align to the UK’s stricter regime across all models or run two sets of standards.

After a long wait, the PRA has published its proposals for implementing remaining Basel 3 standards. Compared to the EU’s CRR3 proposals, this UK interpretation is much more closely aligned to the original Basel standards. The consequent divergence will mean that firms operating in both jurisdictions will either need to align to the UK’s stricter regime across all models or run two sets of standards.

After a long wait, the PRA has published its proposals for implementing remaining Basel 3 standards. Compared to the EU’s CRR3 proposals, this UK interpretation is much more closely aligned to the original Basel standards. The consequent divergence will mean that firms operating in both jurisdictions will either need to align to the UK’s stricter regime across all models or run two sets of standards.

caluculating
caluculating
Fund liquidity risk management
Fund liquidity risk management
The Financial Stability Board and IOSCO have concluded their reviews regarding open-ended funds but have also set out further work for 2023. We cover the key findings from the reviews and their implications, as well as developments in specific countries around the world.

The Financial Stability Board and IOSCO have concluded their reviews regarding open-ended funds but have also set out further work for 2023. We cover the key findings from the reviews and their implications, as well as developments in specific countries around the world.

The Financial Stability Board and IOSCO have concluded their reviews regarding open-ended funds but have also set out further work for 2023. We cover the key findings from the reviews and their implications, as well as developments in specific countries around the world.

The Financial Stability Board and IOSCO have concluded their reviews regarding open-ended funds but have also set out further work for 2023. We cover the key findings from the reviews and their implications, as well as developments in specific countries around the world.

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