BANKING

House of Commons Treasury Committee launches inquiry into UK's economic relationship with the EU

The House of Commons Treasury Committee has launched an inquiry into the UK's economic relationship with the EU. Among other things, the Committee will focus on the following:

  • Transitional arrangements, including their negotiation, design and governance.
  • Preparedness for a "no deal" scenario.
  • The long-term economic relationship between the UK and EU after Brexit.

The Committee's first session will take place on 25 October 2017 and will hear evidence from a number of experts. The inquiry is also accepting written submissions. House of Commons Treasury Committee, 20 October 2017

FCA Handbook Notice 48

The FCA has published Handbook Notice 48, setting out the changes made to the FCA Handbook under the following instruments that were made by the FCA board in Septembebr ad October:

  • Payment Services Instrument 2017. The instrument makes changes to the FCA Handbook in the light of the UK implementation of the revised Payment Services Directive on 13 January 2018. Part of the instrument comes into force on 13 January 2018 and the remainder on 1 April 2018.
  • Financial Services Compensation Scheme (Funding and Scope) Instrument 2017 (FCA 2017/58). Instrument makes changes relating to the extension of the coverage of the Financial Services Compensation Scheme (FSCS) for some aspects of fund management. It also introduces it for certain debt management activities and structured deposit intermediation.

FCA, 20 October 2017

European Commission adopts Delegated Regulation on RTS on materiality threshold for credit obligations past due

The European Commission adopted a Delegated Regulation supplementing the Capital Requirements Regulation with regard to regulatory technical standards (RTS) on the materiality threshold of credit obligation past due.

Article 178 of the CRR specifies the definition of default used for the purposes of the internal ratings based (IRB) approach. A default is considered to have occurred when the obligor is overdue for more than 90 days on any material credit obligation to the firm, the parent undertaking or any of its subsidiaries. The competent authority sets the materiality threshold of such obligations overdue reflecting a level of risk that the competent authority considers to be reasonable. European Commission, 19 October 2017

INVESTMENT AND FUNDS

Prospectuses: ESMA Questions and Answers version 27

The ESMA published version 27 of its questions and answers on prospectuses and issued an accompanying press release. The purpose of the Q&A document is to promote common supervisory approaches and practices in the application of the Prospectus Directive and its implementing measures. One question has been deleted and four updated, including:

  • The deletion of Question 27 (Convertible or exchangeable securities), which set out ESMA's approach to using artificial convertibles to circumvent the prospectus requirement in reliance on the exemption in now repealed Article 4.2(g) of the Prospectus Directive, given that the corresponding exemption in point (b) of the first subparagraph of Article 1(5) of the Prospectus Regulation is now subject to limits.
  • The amendment of Question 29 (Conversion or exchange of non-transferable securities and exemption from publishing a prospectus) to refer to point (b) of the first subparagraph of Article 1(5) of the Prospectus Regulation, rather than Article 4.2(g) of the Prospectus Directive.

ESMA, 20 October 2017