The Financial Conduct Authority has published guidance on the challenges and expectations for principal firms with overseas appointed representatives. The AR regime allows authorized firms to appoint representatives to conduct certain regulated activities on their behalf. The FCA updated its AR rules and expectations at the end of 2022, which included introducing a requirement for principal firms to report additional information about the business conducted by their ARs and amending its rules and guidance on its expectations of principals and their responsibilities, such as the expectation that principals manage their arrangements with ARs so that there are no conflicts of interest and enhance their monitoring of a delegated task or function, and to specify that the principals' activities should not result in undue risk of harm to consumers or market integrity. The new rules also require principals annually to assess the fitness and propriety and competency and capability of individuals at ARs.

Read more.

The Council of the European Union agreed its negotiating mandate on the proposed Regulation amending the European Systemic Risk Board (ESRB) Regulation (1092/2010), EBA Regulation (1093/2010), EIOPA Regulation (1094/2010), ESMA Regulation (1095/2010), and InvestEU Regulation ((EU) 2021/523) regarding certain reporting requirements in the fields of financial services and investment support. The proposal updates existing rules on data sharing between the European Supervisory Authorities and other financial sector authorities with the aim of reducing the administrative burden for authorities in the financial sector. Changes to the European Commission proposal highlighted by the Council of the European Union include: (i) clarification that responsibility for the exchange of information should lie with the ESAs and the ESRB, which should share the information received from the national regulators with other ESAs and EU and national authorities and that it should concern only data stemming from reporting requirements under EU, not national, law; and (ii) removing the newly created AML/CTF Authority from the scope of the authorities that are allowed to issue a request for data sharing at this stage, with a reassessment of its inclusion within two years. As the European Parliament adopted its negotiating mandate on March 12, 2024, interinstitutional negotiations may now begin.

On April 18, 2024, the Financial Services and Markets Act 2000 (Disapplication or Modification of Financial Regulator Rules in Individual Cases) Regulations 2024 were made. The Financial Services and Markets Act of 2023 (discussed in our client note, "A Boost for UK Financial Services") provides a framework for the revocation of retained EU law (now known as "assimilated law") in financial services, much of which will be replaced by rules of the U.K. regulators. Transferring the detailed rules to the U.K. regulator's rulebooks promotes a more nimble approach by the U.K.'s regulators. The FSM Act 2023 gave new delegated power to the U.K.'s regulators for detailed rulemaking, subject to enhanced oversight by Parliament and HM Treasury, and provided various mechanisms for the operation of the regulatory framework, including granting HM Treasury the power to make regulations bestowing on each of the regulators the ability to disapply or modify its rules.

The Regulations also give the Prudential Regulation Authority the ability to disapply or modify the application of any of its rules made under the Financial Services and Markets Act 2000, where appropriate, and in accordance with the procedural requirements set out in the Regulations. The power will allow the PRA to consider the circumstances and business models of individual firms, further enhancing the agile approach to regulation. The Regulations enter into force on June 30, 2024.

The U.K. Financial Conduct Authority has published its Rule Review Framework, setting out how it will set, measure and monitor the outcomes of its Handbook rules. The Rule Review Framework was mandated under the Financial Services and Markets Act 2023 (discussed in our client note, A Boost for UK Financial Services). The FSM Act 2023 transferred responsibility for making detailed rules to the U.K.'s regulators, significantly increasing their powers. To ensure proper oversight of the use of those powers, the FSM Act 2023 provides for an enhanced regulatory accountability framework, which includes requiring the FCA (and the Prudential Regulation Authority, which consulted on its proposed in 2023) to keep their rules under review and publish a statement of policy on how they conduct those reviews.

Read more.

The U.K. Government has signed the Berne Financial Services Agreement with Switzerland, confirming mutual recognition of aspects of the financial services regulatory and supervisory regimes in each jurisdiction. The Agreement permits specified financial services providers in one jurisdiction to supply specified services to wholesale or sophisticated clients in the other jurisdiction in various sectors (including asset management, banking, investment services activities and insurance) on the basis of deference, domestic law or other arrangements.

Read more. 

HM Treasury has published a consultation response and draft statutory instrument on reforms to the high net worth and sophisticated investor exemptions under the financial promotions regime. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for UK Financial Services") made amendments to the Financial Promotion Restriction, banning authorized firms from approving the financial promotions of unauthorized firms unless they have received approval from the FCA to have the prohibition removed in whole or in part. The gateway will apply from February 7, 2024. However, the restriction does not apply where exemptions exist, such as those for high net worth or sophisticated investors.

Read more.

The U.K. Financial Conduct Authority published a Policy Statement on 12 September 2023 setting out how it intends to implement the new regulatory gateway for financial promotions. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services") amends the Financial Promotion Restriction, banning authorized firms from approving financial promotions of unauthorized firms unless they have received approval from the FCA to have the prohibition removed in whole or part. The gateway will apply from February 7, 2024, with authorized firms able to apply to the FCA for permission from November 6, 2023 until February 6, 2024. There are exemptions from the gateway, entering into force on September 27, 2023, which permit the approval of financial promotions by authorized firms, for communication by unauthorized firms, in certain circumstances.

Read more.

The Financial Services and Markets Act 2023 (Commencement No. 3) (Amendment) Regulations 2023 were made on August 25, 2023, postponing the revocation of the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013.

The Commencement No. 3 Regulations amend the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023, which were made on July 10, 2023 and provide for the entry into force of certain provisions of the Financial Services and Markets Act 2023 (which we discuss in our client note, A Boost for UK Financial Services: The UK Financial Services and Markets Act 2023). This included provisions revoking retained EU legislation relating to financial services, including the CITS Regulations. The CITS Regulations establish a fund vehicle for the U.K. investment management industry which makes U.K. domiciled funds for collective investment in transferable securities more competitive. The CITS Regulations will now be revoked on a day appointed by the Treasury in a later instrument.

The Financial Services and Markets Act 2023 (Commencement No. 2 and Transitional Provisions) Regulations 2023, made on August 22, 2023, bring into force certain provisions of the Financial Services and Markets Act 2023 and create a number of transitional regimes. We discuss the FSM Act in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023."

Read more.

The U.K. Financial Conduct Authority, Prudential Regulation Authority and Bank of England have jointly published their revised Complaints Scheme, which governs how complaints against the U.K. regulators should be made and handled. The changes include:

• The introduction of specific discretionary compensation bands for non-financial loss arising from the regulators' actions or inactions. The bands range from £100 for a relatively low level of stress or inconvenience, up to over £2,500 in exceptional circumstances, for example, where the consequences of the regulators' failings are particularly severe.

Read more

The U.K. Financial Conduct Authority has published a statement setting out how its work to support the 'key drivers' of productivity will facilitate delivery of its new secondary objective and how it intends to report on progress embedding the new objective. The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023") introduces a new secondary statutory objective, obliging the FCA and U.K. Prudential Regulation Authority in carrying out their functions to support the long-term growth and international competitiveness of the U.K.'s economy in the medium and long term. This obligation enters into force on August 29, 2023, under Commencement Regulations made on July 10, 2023. Each regulator must report at two intervals to HM Treasury setting out how it has complied with its duty to advance the new objective. The reports are due 12 and 24 months after the new objective applies (August 29, 2024 and August 29, 2025 respectively).

Following finalization of the Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023"), HM Treasury published a Delivery Plan for the Building a Smarter Financial Services Regulatory Framework for the UK. The Delivery Plan compliments the Policy Paper published as part of the Edinburgh Reforms (discussed in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services").

Read more

The U.K. Prudential Regulation Authority opened a consultation on June 30, 2023, on its proposed approach to reviewing its rules, including a proposed statement of policy. The Financial Services and Markets Act 2023 transfers responsibility for making detailed rules to the U.K.'s regulators, significantly increasing their powers, and provides for an enhanced regulatory accountability framework, subjecting the regulators to additional oversight by Parliament and HM Treasury. One of those regulatory accountability measures requires the PRA and Financial Conduct Authority to keep their rules under review and to publish a statement of policy on how they conduct such reviews.

The PRA's consultation sets out its proposed framework for conducting rule reviews, stakeholder engagements, transparency and communicating the outcomes of reviews. Responses to the consultation may be submitted until September 29, 2023.

The FCA has also published a draft Rule Review Framework, for which feedback may be submitted until September 15, 2023.

The U.K. Financial Conduct Authority launched a consultation on July 14, 2023, on its proposed Rule Review Framework. The Financial Services and Markets Act 2023 transfers responsibility for making detailed rules to the U.K.'s regulators, significantly increasing their powers. To ensure proper oversight of the use of those powers in practice, the FSM Act provides for an enhanced regulatory accountability framework, subjecting the regulators to additional oversight by Parliament and HM Treasury. Among other things, the FCA and Prudential Regulation Authority must keep their rules under review and publish a statement of policy on how they conduct such reviews.

The FCA is proposing a draft Rule Review Framework based on the use of data to assess the effects of a rule change. The draft Framework sets out three types of review that the FCA could conduct, describing their purpose. The three types of review are an evidence assessment, a post-implementation review and an ex post impact evaluation. The FCA's draft Framework also describes the steps it could take if the data shows that a rule is not working as had been intended. Comments on the FCA's draft Rule Review Framework may be submitted until September 15, 2023.

The PRA is also consulting on its proposed approach to reviewing its rules, including a proposed statement of policy. Responses to the PRA's consultation may be submitted until September 29, 2023.

HM Treasury has published its response to the Short Selling Regulation Review, which sought views on the proposed U.K. short selling regime. Once the new U.K. regime for short selling is finalized, the retained EU Short Selling Regulation will be revoked under the revocation framework established by the U.K. Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023"). A draft statutory instrument for the new U.K. regime is expected to be published before the end of 2023, with the final S.I. being delivered during the course of 2024. The U.K. Financial Conduct Authority will also consult on proposed rules for the new framework in 2024.
 
The proposed regime is intended to represent a "lighter-touch" approach that will facilitate short selling and its benefits while managing the associated risks. The changes will: (i) increase the net short position disclosure threshold from 0.1% to 0.2%; (ii) replace the current requirement to disclose all short positions over 0.5% with a new disclosures model, whereby the FCA will publish aggregated short positions in each company's shares (removing the need to reveal the identity of individual sellers); and (iii) empower the FCA to make rules on areas such as exempt share arrangements, the market maker exemption requirements and prohibitions on uncovered short selling.

Read more.

HM Treasury has published a near-final draft statutory instrument and related Policy Note setting out its proposed reforms to the U.K. prospectus regime. The U.K. Financial Conduct Authority has also published a series of six Engagement Papers seeking views on its proposed rules under the new regime.

Once the new U.K. regime is finalized, the retained EU Prospectus Regulation will be repealed under the revocation framework established by the U.K. Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023").

Read more

On May 9, 2023, the U.K. government published a Call for Proposals on which metrics the Financial Conduct Authority and the Prudential Regulation Authority should be required to publish for the new secondary growth and competitiveness objectives. The new secondary objectives, which will be brought in under the Financial Services and Markets Bill, will compel the FCA and PRA in carrying out their functions to support long-term growth and international competitiveness. For the PRA, the new growth and international competitiveness objective will operate in conjunction with its existing secondary objective to facilitate effective competition in the markets for services provided by PRA-authorized firms (banks, large investment firms, insurers and credit unions). For the FCA, the new objective will go together with the FCA's three existing operational objectives of consumer protection, market integrity and competition.

Read more.

The U.K. Government has announced on a series of initiatives, billed as the Edinburgh Reforms, to reform the laws for the U.K. financial services sector. The proposals cover:

• Reforms to Ring-Fencing Regime;
• Implementation of Post-Brexit Financial Regulatory Framework;
• Growth and Competitiveness Remit for U.K. Regulators;
• Reforms to Wholesale Markets;
• Faster Settlement;
• Senior Manager's and Certification Regime;
• Changes to Promote Investment and Growth in Financial Services;
• Sustainable Finance;
• FinTech and Digital Assets; and
• Consumer Credit.

We discuss these reforms in detail and what they might mean for the direction of travel for financial services regulation in the U.K. in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services".

HM Treasury has published its final response to the Financial Services Future Regulatory Framework Review in which it sets out the government's policy approach to reforming the U.K.’s regulatory architecture post-Brexit. The response is published on the same day as the Financial Services and Markets Bill is introduced to Parliament, which will implement in legislation these significant reforms.

Read more.

HM Treasury has announced the appointment of Ashley Alder as Chair of the U.K. Financial Conduct Authority. Mr Alder will succeed interim chair Richard Lloyd, who has served as interim Chair since Charles Randell stepped down from his post in May 2022. Mr Alder, a former lawyer who is currently CEO of the Securities and Futures Commission of Hong Kong and Chair of the International Organisation of Securities Commissions, will take up his post from January 2023.

The House of Commons Treasury Committee has announced the creation of a new sub-committee that will scrutinize financial services regulatory proposals and has published a report setting out the approach that Parliament will take to its scrutiny role now that the U.K. has left the EU. The new sub-committee will be called the Sub-Committee on Financial Services Regulations, and its members will initially be all the members of the Treasury Committee. The sub-committee has been set up because Parliament's examination of regulatory proposals is likely to increase when existing EU regulations are moved to the rulebooks of the U.K. regulators, resulting in an assessment by the regulators as to whether those rules are appropriate for the U.K. Among other things, the new Sub-Committee on Financial Services Regulations will have powers to "send for persons, papers and records", to seek and take evidence and report on its findings.

The House of Commons Treasury Committee has published a report on the Future of Financial Services Regulation setting out its view on the priorities for regulatory change in the U.K. now that the U.K. has left the EU. The report considers some of HM Treasury's proposals in the Future Regulatory Framework Review and presents its related recommendations. It also makes specific recommendations for the Financial Conduct Authority and the Prudential Regulation Authority.

Read more.

The U.K. Financial Conduct Authority has made three appointments to its senior leadership team:

Mel Gunewardena has been appointed to Senior Advisor, and will join the FCA from his role as Chief Market Intelligence Officer at the US Commodities and Futures Trading Commission;
 

• Graeme Reynolds has been appointed Director of Competition and will move from his current role as an FCA deputy chief economist; and
• Simon Walls has been appointed Interim Wholesale Director and will take up the role from his current position of Head of Wholesale Markets. The FCA is recruiting two permanent Wholesale Directors.

The U.K. Financial Conduct Authority has published a three-year Strategy on improving outcomes of regulation and its 2022/23 Business Plan. In the 2022-2025 Strategy, the FCA outlines its expectations of financial services across all sectors, with a view to the overall outcomes that firms should achieve. There are three outcomes for both the wholesale and retail markets, which are fair value, access and confidence. An additional outcome of suitability and treatment applies for the retail markets, to ensure that consumers are treated well and are sold products and services that are suitable for them. The 2022/23 Business Plan sets out the detailed work that the FCA will undertake over the next year to meet the commitments made in its Strategy.

Read more.

The U.K. Financial Conduct Authority has made three new appointments:
 

• Laura Dawes will be appointed to one of two newly created Director of Authorisations roles. The new Director roles are part of the FCA's commitment to create a more robust and efficient authorisation process, where more decisions will be made by individual senior managers as opposed to committees. Laura currently works within the FCA's Enforcement and Market Oversight Division.

Read more.

The Financial Stability Board has published a letter to G20 Finance Ministers and Central Bank Governors outlining its work priorities for 2022, which are:
 

• Supporting financial market adjustment to a post-COVID-19 world: the FSB observes vulnerabilities in the financial system, such as embedded leverage in some parts of the system and rising real estate and other asset valuations, which could pose risks to stability in the event of tightening financial conditions. Uneven unwinding of pandemic support measures is also a risk and the FSB will prepare an interim report in July and final report in October on policy considerations to support a more even global pandemic recovery.

Read more.

The U.K. Financial Conduct Authority has appointed Richard Lloyd OBE as its interim Chair of the FCA. He will assume the position on June 1, 2022 and will continue until a permanent successor for former Chair Charles Randell takes up the position.

Read more.

The European Securities and Markets Authority has opened a consultation in which it proposes to amend the requirements on EU CCPs relating to an additional charge related to the procyclicality of margin. Responses to the consultation should be submitted by March 31, 2022. The European Market Infrastructure Regulation requires CCPs to impose, call and collect margins to limit their credit exposures from clearing members. A CCP must also regularly monitor and, if necessary, revise the level of its margins to reflect current market conditions considering any potentially procyclical effects of those revisions. Procyclicality of margin is the term used to describe the fact that margin requirements for the same portfolio are higher in times of market stress and lower in calm conditions. Regulatory Technical Standards under EMIR set out requirements for CCPs to use at least one of three options to limit procyclicality to the extent that the financial soundness of the CCP is not negatively affected. Generally, the EU imposes higher (more costly) margin charges than most other jurisdictions, including the U.S. and other major financial centres, which have essentially no extra procyclicality charge for CCPs.

Read more.

HM Treasury has announced that Gwyneth Nurse has been appointed as Director General, Financial Services. She will replace Katharine Braddick from January 2022.

The Bank of England has written to the CEOs of all regulated U.K. financial market infrastructures notifying them that they are no longer expected to discuss prospective shareholder distributions with the BoE.

Read more.

HM Treasury has launched a consultation, the Financial Services Future Regulatory Framework Review: Proposals for Reform. The consultation paper presents the government's response to the feedback received to the October 2020 FRF Review consultation and numerous proposals to progress the approach. Responses to the consultation may be submitted until February 9, 2022. 

Read more.

An international consultation has been launched on the review of margining practices in the centrally and non-centrally cleared markets. The consultation is being run jointly by the Basel Committee for Banking Standards, the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions. In March 2020, around the start of the COVID pandemic, large increases in margin occurred in the centrally and non-centrally cleared markets, furthering the so-called "dash for cash".

The consultation is considering a range of potential changes to the international framework, such as:

• increasing transparency in the centrally cleared market;
• enhancing liquidity preparedness of market participants as well as liquidity disclosures;
• identifying data gaps in regulatory reporting;
• streamlining variation margin processes in centrally and non-centrally cleared markets;
• further work on evaluating the responsiveness of centrally cleared initial margin models to market stresses with a focus on impacts and implications for CCP resources and the wider financial system; and
• evaluating the responsiveness of non-centrally cleared initial margin models to market stresses.

The European Securities and Markets Authority has announced that Verena Ross will take up the position of Chair of ESMA from November 1, 2021. Ms. Ross will replace Steven Maijoor, the former Chair. Her appointment is for a five-year term, renewable once.

The U.K. Financial Conduct Authority has issued a press release announcing that its current chair, Charles Randell CBE, will be resigning early from his position in Spring 2022. Mr. Randell wrote to the Chancellor informing him of the decision to step down as chair of the FCA and the Payment Systems Regulator. Mr. Randell has been Chair of the FCA and PSR since April 1, 2018. The resignation comes just 10 days after the FCA was provided with a preliminary report by the Financial Regulators Complaints Commission concerning the FCA's handling of the London Capital & Finance scandal, which is due to be published in the next month and has been reported by the press to be critical of the FCA.

The U.K. Financial Conduct Authority has published a consultation paper on proposals to change its decision-making process. The objective of these proposals is to make the FCA a nimbler regulator that can make faster and more effective decisions. Responses to the consultation may be submitted until September 17, 2021. The FCA intends to publish a Policy Statement before the end of the year, likely in November, and envisages that the revised decision-making framework would start in November, too. Any cases that are being considered by the Regulatory Decisions Committee would remain with the RDC under the existing processes.

Read more.

The Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructure and the International Organization of Securities Commissions has published a survey on margin calls as part of an investigation into liquidity shortfalls during the early stages of the COVID-19 pandemic. The combined effect of government measures to contain the pandemic in March 2020, together with market uncertainty, job losses and travel restrictions triggered a pullback in economic activity and stress on market liquidity. The non-bank financial intermediation sector was found to be particularly vulnerable to the liquidity shock.

Read more.

The U.K. Financial Services Bill has received Royal Assent from Her Majesty the Queen and has become an Act of Parliament, the Financial Services Act 2021. Some provisions of the Act came into force on the date of Royal Assent, with a limited number following on June 29, 2021. The majority of the Act will come into force on a date specified in regulations yet to be made by HM Treasury.

Read more.

The U.K. Financial Conduct Authority has appointed Sacha Sadan as its Director of Environment, Social and Governance, a new role which will develop the FCA's approach to sustainable finance domestically and internationally. Ms Sadan was formerly Director of Investment Stewardship at Legal and General Investment Management.

Read more.

The U.K. Prudential Regulation Authority and Financial Conduct Authority have published a joint Dear CEO letter addressed to CEOs of U.K. banks and building societies on the risks of accepting deposits from deposit aggregators.

Read more.

HM Treasury has published its response to the call for evidence on Phase I of the U.K. Financial Services Future Regulatory Framework Review. The FRF Review was announced in March 2019 and will assess whether the U.K. financial services regulatory framework is fit for purpose, taking into account the U.K.'s exit from the EU, climate change and other global and technological challenges. The call for evidence on Phase I of the Review focussed on how the Government and regulators work together to ensure the best outcome for the financial services sector.

Read more.

The FICC Markets Standards Board has appointed Ed Davey as its Chief Operating Officer. The FMSB is responsible for setting standards for the wholesale, fixed income, currencies and commodities markets.
 
View the FMSB's announcement.

The U.K. Financial Conduct Authority has made four new appointments to its executive team:
 

• Stephanie Cohen will be the FCA's Chief Operating Officer, responsible for the FCA's operations and business performance, systems and infrastructure and finances;
• Jessica Rusu will be the FCA's Chief Data, Information and Intelligence Officer, leading the transformation of the FCA's data intelligence and information;
• Sarah Pritchard will be the FCA's Executive Director for Markets, delivering the FCA's statutory market integrity objective within the Supervision, Policy and Competition division; and
• Emily Sheppherd will be the Executive Director for Authorizations, overseeing authorizations for firms and individuals applying to undertake regulated financial services activity in the U.K.

Read more.

The Bank of England has published a plan to transform its ability to collect data from the financial services sector over the next decade. Three key principles of the plan are: (i) defining and adopting common data standards that are consistent across the financial sector; (ii) modernizing reporting instructions to improve how they are written and implemented; and (iii) integrating reporting to facilitate a more efficient approach to data collection. The Transformation Plan was prompted by Huw Van Steenis' 2019 report on the "Future of Finance", which highlighted the importance of data standards and protocols and the value of harnessing data. The BoE published a response to the "Future of Finance" report, in which it undertook to deliver a world-class data strategy.

Read more.

The U.K. Financial Conduct Authority has published a letter addressed to the CEOs of retail banks setting out the FCA's approach to retail bank supervision in light of the COVID-19 pandemic.

In the letter, the FCA identifies the key risks of harm that retail banks' activities may pose over the next two years, sets out its expectations of the actions retail banks need to take to mitigate the risks and discusses the work that the FCA will undertake to ensure firms are meeting the expectations. The risks are grouped into the following four priority supervisory areas:
 

1. ensuring fair treatment of borrowers, including those in financial difficulties;
2. ensuring good governance and oversight of customer treatment and outcomes during business change over the next two years;
3. ensuring operational resilience over the next two years and beyond; and
4. minimizing fraud and other financial crime.

View the FCA's letter.

The U.K. Financial Conduct Authority has published its final Approach to international firms, setting out its approach to authorization and supervision of international firms providing or seeking to provide financial services that require authorization in the U.K. The FCA has also published a feedback statement summarizing its response to the submissions received in response to its consultation last year. The Approach Document sets out the conditions against which a firm will be assessed and discusses the circumstances in which firms may present higher risks and how the risks could be mitigated. It generally proposes that U.K.-authorized firms should have a U.K. place of business, so would not result in any new regime for EU firms which are currently using the "temporary permissions regime".

The FCA's Approach Document is not relevant to firms that are operating in the U.K., but do not need authorization to do so, for example, those firms using the Overseas Persons Exclusion. It is not also not relevant for payment services firms, e-money institutions, depositaries, trustees and managers of U.K. authorized funds, international alternative investment fund managers and international benchmark administrators.

Firms that are or would be subject to dual regulation, should also consider the approach of the Prudential Regulation Authority to the supervision and authorization of firms.

View the FCA's Approach to International Firms.

View the FCA's feedback statement.

View details of the PRA's consultation on its approach to supervising international banks.

EU Regulatory Technical Standards postponing the implementation deadline of the settlement discipline regime under the Central Securities Depositories Regulation have been published in the Official Journal of the European Union. The RTS delay the application date of the settlement discipline rules from February 1, 2021 to February 1, 2022, by amending the existing RTS (Commission Delegated Regulation (EU) 2018/1229). The settlement regime was originally due to apply from September 13, 2020. However, that date was changed to February 1, 2021, amid calls from industry associations and other stakeholders to delay the application date so that systems, procedures and measures could be put in place. The latest delay arises from the impact of the COVID-19 pandemic on the financial services industry. The RTS cover measures for preventing settlement fails through automated matching, a hold and release mechanism and partial settlement. The RTS also provide measures for monitoring and addressing settlement fails, such as a mechanism for cash penalties and a buy-in process.

View the amending Delegated Regulation.

HM Treasury has opened a consultation on the proposed U.K. approach to crypto-assets and stablecoins, in particular a proposal to bring stablecoins into the U.K. regulatory perimeter. Responses to the consultation may be submitted until March 21, 2021. The government will consider the responses to the consultation and publish a response with further details on how the approach would be implemented in law. If the policy approach is followed, the regulators would consult further on rules for firms.

Read more.

The European Securities and Markets Authority has renewed its decision requiring holders of net short positions in shares traded on an EU-regulated market to notify national regulators if the position reaches or exceeds 0.1% of issued share capital. ESMA originally introduced the requirement on March 16, 2020 for a period of three months and has extended it twice since then. This latest extension will apply the requirements from December 19, 2020 until March 19, 2021. The temporary transparency obligations are a response to perceived threats to market integrity arising from the COVID-19 pandemic. They apply to any natural or legal person, irrespective of their country of residence, but do not apply to shares admitted to trading on a regulated market where the principal venue for the trading of the shares is located in a third country, market making activities, or stabilization activities.

The European Free Trade Association's Surveillance Authority published a decision on the same day renewing its decision imposing the same transparency obligations for shares admitted to trading on an EEA regulated market. The renewed requirements also apply from December 19, 2020 until March 19, 2021.

View ESMA's decision.

View the EFTA decision.

HM Treasury has launched a call for evidence on the U.K.'s framework for cross-border financial services. HM Treasury is considering policy approaches for ensuring the U.K. framework is fit for the future given the U.K.'s exit from the EU, including consideration of how effective and proportionate regulation can support attracting investment and liquidity to the U.K. Responses to the consultation may be submitted until March 11, 2021.

Read more.

Following its consultation earlier this year, the U.K. Financial Conduct Authority has published its final policy statement and rules to extend certain implementation deadlines for the Certification Regime and Conduct Rules. To assist firms impacted by the COVID-19 pandemic, the U.K. has made legislation—The Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) (Amendment) Regulations 2020— extending the deadline for completion of firms' first assessments of the fitness and propriety of their Certified Persons from December 9, 2020, to March 31, 2021. This applies only to solo-regulated firms (other than benchmark administrators).

In addition to extending that date, the FCA has also extended the following deadlines from December 9, 2020, to March 31, 2021:

• the date the Conduct Rules come into force for staff that are not Senior Managers, Certification Staff or board directors;
• the date by which relevant employees must receive training on the Conduct Rules; and
• the deadline for submission of information about Directory Persons to the FS Register.

The FCA has reiterated that firms that are able to certify staff and submit information for the FS Register before March 31, 2021, should do so.

View the FCA's policy statement and amended rules.