HM Treasury Statement on the New Prudential Regime for Banks and Investment Firms

On June 23, HM Treasury published a policy statement (the Statement) on its approach to legislating for the new prudential standards in the forthcoming Financial Services Bill (the Bill).

HM Treasury intends to use the Bill to implement prudential standards for banks and other credit institutions relating to the EU’s revised Capital Requirements Regulation (CRR II) and the new Investment Firms Prudential Regime (IFPR). According to the Statement, HM Treasury will delegate the responsibility for the implementation of the Bill for firms to the UK Prudential Regulation Authority and the UK Financial Conduct Authority.

HM Treasury aims to introduce the IFPR and updated prudential standards for credit institutions based on CRR II by summer 2021, subject to the timeline for the Bill to pass through Parliament.

For a more comprehensive discussion of this topic, please see this week’s Katten podcast, available here.

The Statement is available here.

UK Government Statement on Legacy LIBOR Contracts

On June 23, the UK Government published a statement on the transition away from London Inter-bank Offered Rate (LIBOR) with a focus on legacy contracts (the Statement).

 The Statement sets out the UK Government’s intention to legislate to amend and strengthen the existing regulatory framework for benchmarks, rather than imposing legal changes on LIBOR-referencing contracts that are governed by English law. By the end of 2021, the UK Financial Conduct Authority (FCA) should be granted the appropriate regulatory powers to manage an orderly transition away from LIBOR in a way that protects consumers and ensures market integrity. In particular, the FCA may be able to help market participants identify certain legacy LIBOR contracts for specific limited continued use where there are no genuine or appropriate alternatives, and no realistic ability to be renegotiated or amended.

The Statement is available here.

FCA Statement on Cryptoasset Business Registration

On June 22, the UK Financial Conduct Authority (FCA) published a statement reminding businesses that carry out cryptoasset activities in the UK to register with the FCA by June 30, 2020 (the Statement).

In the Statement, the FCA explains that:

1. any businesses which began engaging in such activities after January 10, 2020 must be registered with the FCA before carrying out such business; and

2. any businesses that started carrying out the activities before January 10, 2020 and are not registered with the FCA by the January 10, 2021 deadline will have to cease carrying on such activities.

The Statement is available here.