Please see the Prudential Regulation section for an update on the HoC European Scrutiny Committee’s latest report.

UK government guarantees Gibraltar financial services firms' access to UK markets

On 8 March, DExEU published a statement guaranteeing Gibraltar financial services firms' access to UK markets as now until 2020. The government states that, in the meantime, it will work closely with the government of Gibraltar to design a replacement framework that will last beyond 2020. This framework will be based on common high standards of regulation and regulatory enforcement, and underpinned by modern arrangements for information-sharing, transparency and regulatory co-operation.

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Chancellor of Exchequer speech on UK-EU free trade

On 7 March, the Chancellor of the Exchequer, Philip Hammond, gave a speech on Brexit and financial services. In the speech, Mr Hammond argued that a post-Brexit FTA between the UK and the EU should contain extensive provisions on financial services. The FTA should establish a partnership between the UK and the EU enabling the ongoing delivery of cross-border financial services between the two jurisdictions, while protecting financial stability as well as consumers, businesses, and taxpayers.

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Insurance Europe updated position paper on insurance contracts

On 5 March, Insurance Europe published an updated version of its position paper on the consequences of Brexit on existing insurance contracts. Insurance Europe calls on the UK and the EU to reach an agreement on the grandfathering of existing insurance and reinsurance contracts, to give legal certainty and sufficient time to reorganise businesses, set up branches and subsidiaries and transfer policies. It is critical that grandfathering provisions apply to reinsurance contracts, to ensure continuation of service until their termination.

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Theresa May speech on future UK-EU economic partnership: financial services aspects

On 2 March, the Prime Minister, Theresa May, gave a speech on the UK's future economic partnership with the EU. In the speech, Mrs May confirmed that the UK intends to agree a FTA with the EU, covering financial services. She stated that the UK and the EU should establish the ability to access each other's markets, based on the two jurisdictions maintaining the same regulatory outcomes over time, with a mechanism for determining proportionate consequences where they are not maintained. She argued that there should be a collaborative, objective framework that is reciprocal, mutually agreed, and permanent and reliable for businesses.  Mrs May also stated that the UK would not seek to retain existing passporting arrangements, as these would depend on membership of the single market and consequently the UK implementing new EU financial services legislation automatically.

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EC communication on completing capital markets union: financial services aspects

On 8 March, the EC published a communication: Completing the Capital Markets Union by 2019 - time to accelerate delivery (COM(2018) 114). It has also published an Annex to the communication.

In the action plan, the EC summarises its progress to date, including pending initiatives, on completing the CMU by mid-2019. It states that it intends to adopt the following proposals and other documents relating to the CMU in March 2018: (i) proposal for a Regulation on the law applicable to the third-party effects of assignments of claims and a communication on the applicable law to the proprietary effects of transactions in securities; (ii) proposals for a Directive on the issue of covered bonds and covered bond public supervision and a Proposal for a Regulation on exposures in the form of covered bonds; (iii) proposals for a Directive on the cross-border distribution of collective investment funds and a Regulation on facilitating cross-border distribution of collective investment funds; and (iv) proposal for a Directive on credit servicers, credit purchasers and the recovery of collateral. The EC states that, by May 2018, it will have presented all the legislative initiatives that were announced in the September 2015 CMU action plan and in the June 2017 mid-term review. It calls on the EP and the Council of the EU to accelerate work on all pending legislative proposals to ensure their adoption before the elections to the Parliament in mid-2019 at the latest.

Read the communication

Read the annex

IOSCO consultation on mechanisms for trading venues to manage extreme volatility

On 7 March, IOSCO published a consultation paper (CR03/2018) requesting feedback on proposed recommendations relating to mechanisms for trading venues to manage extreme volatility. IOSCO discusses the measures used by trading venues to address the risks posed by extreme volatility, and concludes that those mechanisms can be an effective way to mitigate the effects of such volatility and to maintain orderly trading. It makes a number of recommendations designed to help trading venues and regulatory authorities when making decisions about the implementation, operation and monitoring of volatility control mechanisms. The deadline for comments is 6 May.

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TARGET 2–Corrigenda to ECB guideline on exercise of options and national discretions under EU law for less significant institutions and to ECB Target2 decision published in OJ

On 2 March, the following corrigenda were published in the OJ: (i) Corrigendum to guideline (EU) 2017/697 of the ECB of 4 April 2017 on the exercise of options and discretions available in Union law by national competent authorities in relation to less significant institution(ECB/2017/9); and (ii) Corrigendum to decision (EU) 2017/2081 of the ECB of 10 October 2017 amending decision ECB/2007/7 concerning the terms and conditions of TARGET2-ECB (ECB/2017/30).

Read corrigendum to guideline (EU) 2017/697

Read Corrigendum to decision (EU) 2017/2081


ABI framework for "gone away" customers in life and pensions market

On 7 March, the ABI published a framework for the management of "gone away" customers in the life and pensions market. The framework is designed to support providers in developing, maintaining and improving their own strategy and procedures for dealing with gone aways and reducing the number of new gone aways. The framework sets out 11 principles for providers to consider when deciding how to avoid losing contact with customers, and how to re-establish contact with and re-engage gone aways. The framework is voluntary, not intended to be prescriptive or exhaustive and aims to complement providers' existing practices, while encouraging ongoing refinement and improvement. Among other things, the principles provide that providers should have: (i) a clear definition of what constitutes a gone away customer. The framework sets out a suggested definition; (ii) systems and controls to identify and deal proactively with new gone away customers; (iii) targets relating to the level of re-engagement of gone away customers; (iv) clearly defined and documented roles and responsibilities across their organisation in relation to gone away customer management; and (v) agreed and documented governance controls for the management of gone away customers. The ABI will review the framework in April 2019 to ensure it remains up to date and takes account of technological developments.

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FCA webpage on review of product governance in small and medium-sized retail banks

On 5 March, the FCA published, on a webpage, the findings from its thematic review of product governance in small and medium-sized retail banks. The FCA's review involved a sample of small to medium-sized banks and focused particularly on how firms' product governance frameworks help them identify and manage the ongoing conduct risks of their two-year fixed-rate savings products. The FCA did not seek to test how well firms were complying with its rules. The FCA encountered a number of examples of good practice, including around the most effective governance frameworks, seeking customer feedback and management information. Though the FCA did not find any breach of rules or guidance, it identified several areas where firms can improve their practices to help achieve good outcomes. In particular, it found that some firms need to strengthen their product review processes or provide greater clarity in their product information.

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JMLSG AML and CTF revised guidance

On 6 March, the JMLSG updated its webpage on its AML and CTF guidance to state that it has received ministerial approval of Parts I, II and III of the latest versions of its guidance. Technically, the guidance is not legally binding. However, as the JMLSG guidance has been approved by HMT compliance with it can provide a safe harbour in the event of prosecution under certain parts of the UK AML and CTF regime.

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HM Treasury AML and CTF supervision report 2015-17

On 5 March, HM Treasury published its AML and CTF supervision report 2015-17 (dated March 2018). The report considers AML supervisory activity in 2015/16 and 2016/17 and sets out the next steps, including the intended impact of the MLRs 2017, which came into force on 26 June 2017, and the OPBAS, which came into being on 18 January. In the report, HM Treasury describes 2017 as "a year of considerable challenge and unprecedented change". The report focuses on key areas that demonstrate a supervisory regime is effective, including: (i) Supervisors' understanding of money laundering and terrorist financing risk within their sector; (ii) How supervisors' understanding impacts on their supervisory approach, ensuring resources are deployed according to risk; (iii) Engagement with law enforcement to share information and facilitate investigations; (iv) The impact of initiatives intended to promote awareness on compliance; and (v) Whether remedial actions, including effective, proportionate and dissuasive sanctions, are applied to penalise breaches and promote compliance.

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EC communication on FinTech action plan

On 8 March, the EC published a communication (COM(2018) 109 final) setting out its FinTech action plan, which includes measures to create a more competitive and innovative European financial sector. The EC has concluded that the case for broad legislative or regulatory action or reform at EU level at this stage is limited. However, while it wishes to avoid introducing overly prescriptive regulation that could stifle innovation, it is aware that refraining from intervention may place EU financial services providers at a disadvantage in an increasingly global market. It is also keen to ensure that key risks relating to consumer protection and financial stability do not remain unaddressed. The EC has therefore concluded that a number of targeted initiatives are necessary to enable innovative business models to scale up, to support the uptake of new technologies, and to increase cyber security and the integrity of the financial system. The FinTech action plan initiatives include: (i) blockchain and DLT; (ii) cyber resilience; (iii) crowdfunding; (iv) outsourcing to the cloud; (v) regulatory framework; and (vi) regulatory sandboxes. The EC will present a report with best practices by the first quarter of 2019.

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See our Consumer/Retail section for an update on the recent ABI framework for "gone away" customers in life and pensions markets.

EIOPA letter to European Commission on supervisory reporting requirements consultation

On 6 March, EIOPA published a letter from Gabriel Bernardino, EIOPA Chair (dated 5 March 2018) to Olivier Guersent, European Commission Director-General, DG FISMA, relating to the EC's consultation paper on supervisory reporting, which was published in December 2017. Mr Bernardino explains that with the implementation of the Solvency II Directive (2009/138/EC), the European insurance sector has had a new supervisory reporting framework in place since 2016. Points of interest in the letter include the following: (i) Mr Bernardino highlights the importance of supervisors receiving meaningful data in terms of granularity, coverage, frequency and within proper timelines to identify and early assess the risks the industry face, both at micro and macro levels. The harmonisation of the information to supervisory authorities throughout Europe is an essential instrument to promote supervisory convergence; and (ii) although Mr Bernardino agrees that consideration needs to be given to the cost and burden of reporting, he raises the issue of common misunderstandings regarding the origin of costs, which are usually attributed solely to reporting requirements. In a risk-based regime like Solvency II, undertakings have to hold adequate data to properly identify, assess, manage, mitigate and report the risks they face. The need for data availability and data quality is therefore not mainly driven by reporting obligations, but by the sound prudential requirements on risk management, technical provisions and capital requirements. The letter concludes by Mr Bernardino referring to the review of the implementing technical standards on Solvency II supervisory reporting that EIOPA is currently planning.

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Risks in insurance sector – IAIS speech

On 5 March, IAIS published a speech by Jonathan Dixon, IAIS Secretary General, on its role in times of turbulence. Mr Dixon focused on the role of the IAIS in addressing three areas of turbulence: the buffeting received from the global financial crisis, current changes in the environments of both insurers and regulators and the future potential of turbulence and disruption from emerging risks. He emphasised that at times like this, the IAIS, with the involvement of its stakeholders, has been successful in achieving global consensus on critical issues affecting the insurance sector and moving it towards greater regulatory convergence.

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Council of EU publishes text of proposed Directive delaying IDD

On 2 March, the Council of the EU published the text of the proposed Directive amending the IDD as regards the date of application of member states' transposition measures (PE-CONS 1/18). The text has been published in advance of the Council's formal adoption of the Directive. The Council announced that it had agreed to delay the IDD's transposition and application dates on 14 February. The EP voted in plenary to adopt the Directive on 1 March and published the provisional text the following day.

Read the Council text

Read the EP’s provisional text


ESMA publishes double volume cap data under MiFID II

On 8 March, ESMA published trading volumes and calculations relating to the DVC under MiFID II. The DVC mechanism, which is set out in Article 5 of MiFIR, is intended to limit the amount of trading under certain equity waivers to ensure that the use of those waivers does not harm price formation for equity instruments. It does this by limiting the amount of dark trading under the reference price waiver and the negotiated transaction waiver. ESMA reminds NCAs that they should suspend, within two working days, the use of waivers in those financial instruments where the caps have been exceeded. This means that the use of the waivers should be suspended for these instruments for a period of six months starting from 12 March. ESMA intends to publish the DVC data for March 2018 on 9 April, including any data received after the cut-off date for data submissions of 1 March. ESMA announced in January 2018 that it was delaying the implementation of the DVC until March 2018, due to data quality and completeness issues. The data published by ESMA therefore covers both January 2018 and February 2018.

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FSB reporting guidelines for implementing global securities financing data standards

On 5 March, the FSB published reporting guidelines for implementing its global securities financing data standards. The reporting guidelines: cover the main elements of the FSB's securities financing data collection (that is, scope, frequency and reporting deadlines) include a data template for national and regional authorities to report to the global aggregator that contains all the data elements envisaged under the standards; and set out the classification codes.

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MiFID II – FCA updates webpage on LEI implementation

On 2 March, the FCA updated its webpage for firms subject to transaction reporting obligations under the MiFID II and MiFIR. The FCA refers to a statement issued by ESMA in December 2017 outlining temporary measures in respect of the LEI for clients that are legal persons and for issuers. It explains that the approach described in ESMA's statement requires the FCA to amend the LEI validation rule in its market data processor (MDP). The FCA had informed the industry that the change would not be possible before 3 January and it would provide further information in due course. It now confirms that the amendment to the LEI validation will be implemented in the MDP on 10 March 2018 and firms should (re)submit from 12 March any outstanding transaction reports where the trade date precedes the LEI registration date.

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See our Other section for an update on the FCA’s latest quarterly consultation.


See our Consumer/Retail section for an update on the recent ABI framework for "gone away" customers in life and pensions markets.

ECON draft report on proposed Regulation on pan-European personal pension product

On 5 March, ECON published its draft report (PE618.225v1-00) (dated 28 February) on the EC’s proposal for a Regulation on a pan-European personal pension product (PEPP) (2017/0143 (COD)). The draft report contains a EP legislative resolution, the text of which sets out suggested amendments to the EC’s proposal. The next step is for ECON to vote on the draft report, before it is considered by the EP in plenary.

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Corrigendum to Regulation relating to reporting of supervisory financial information published in OJ

On 8 March, a corrigendum to Regulation (EU) 2017/1538 of the ECB amending Regulation (EU) 2015/534 on reporting of supervisory financial information (SSM Financial Reporting Regulation) was published in the OJ. The corrigendum amends paragraph 2(b) of Annex I to Regulation (EU) 2017/1538. The SSM Financial Reporting Regulation applies to credit institutions in the SSM. It supplements Commission Implementing Regulation 680/2014, which sets out financial reporting requirements within the scope of the CRR.

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EBA consults on draft guidelines on non-performing and forborne exposures

On 8 March, the EBA has published a consultation paper on draft guidelines for credit institutions on the management of NPEs and FBEs (EBA/CP/2018/01). In the consultation paper, the EBA explains that the financial crises contributed to a build-up of NPEs in many banks' balance sheets. The guidelines are designed mainly to reduce the number of NPEs and FBEs on banks' balance sheets. They include the following key areas: (i) NPE strategy, governance and operations; (ii) forbearance, recognition of NPEs, impairment measurement; (iii) collateral valuation; and (iv) supervisory evaluation of management of NPEs and FBEs. The EBA aims to finalise the proposed guidelines during summer 2018 and expects to implement them by 1 January 2019.

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HoC European Scrutiny Committee sixteenth report on prudential framework

On 6 March the HoC European Scrutiny Committee published its sixteenth report of the 2017-19 parliamentary session. Amongst other issues, the report considers the EC’s legislative proposals for a new framework for the prudential regulation of investment firms that were adopted in December 2017. The committee asks the government to clarify its approach on a number of issues relating to the proposals, namely: (i) whether UK-based class 1 investment firms will be required to establish an independently capitalised intermediate parent undertaking in the EU and if so, how many UK-based firms would be affected; (ii) what changes the Government will seek to the “definitions and designations” for classifying “class 1” investment firms, so that these “work for UK financial stability”; (iii) whether the government intends to seek any changes to the prudential regime for other investment firms; (iv) the committee also raises general questions about the interaction between the proposals and the UK's approach to Brexit and financial services. It comments that, given the continued uncertainty about the maximum length of transitional arrangements, the UK may be required to apply the new prudential regime for investment firms, even though the regime is unlikely take effect before 2021. The committee concludes that, as things stand, the EC’s proposals could have a constraining effect on the UK's regulatory autonomy post-Brexit as a consequence of either the UK needing to observe regulatory convergence with the EU as a condition of market access or the modification of the MiFID II equivalence regime.

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BCBS report on Basel III monitoring exercise as of 30 June 2017

On 6 March, the BCBS published a report (BCBS433) and an accompanying press release, which summarise the aggregate results of the latest Basel III monitoring exercise, using data as of 30 June 2017. The report covers analysis relating to matters including the following: (i) Capital ratios; (ii) Capital shortfalls; (iii) Composition of capital; (iv) Leverage ratio; (v) TLAC requirements for G-SIBs; (vi) LCR; and (vii) NSFR. The report is based on reporting processes set up by the BCBS to periodically review the implications of the Basel III standards for financial markets.

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EBA reports on Basel III monitoring exercise as of 30 June 2017

On 6 March, the EBA published a report and an accompanying press release, which summarise the results of the latest EU Basel III monitoring exercise, using data as of 30 June 2017. The report is based on a sample of 138 banks, comprising 45 Group 1 banks (that is, internationally active banks that have tier 1 capital of more than EUR3 billion) and 93 Group 2 banks (that is, all other banks). The EBA highlights an improvement of EU banks' capital positions, with a total average CET1 ratio of 13.8%, in comparison with a 13.4% ratio as of 31 December 2016. It also notes that the average LCR was 143.1% as of 31 December 2016, in comparison with 139.5% as of December 2016, and the overall average NSFR ratio was 112.3%, in comparison with 112.0% as of December 2016.

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CRR – FCA webpage on transitional arrangement for exemption from certain large exposures limits

On 5 March, the FCA published a webpage on the transitional arrangement under Article 493 of the CRR for the exemption from large exposure limits. The webpage explains that the CRR has been updated by article 1(2) of the IFRS 9 Regulation, which incorporates the new paragraphs 4 to 7 in Article 493 of the CRR. As a result, the CRR now provides for a transitional arrangement for the exemption from large exposure limits. This exemption relates to exposures to certain public sector debt of member states denominated in the domestic currencies of any member states. The transitional period is three years, starting from 1 January 2018 for exposures of this type incurred on or after 12 December 2017.

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HM Treasury letters on Council of EU progress on CRD V, CRR II and BRRD II

On 2 March, DExEU published letters (dated 28 February 2018) from John Glen, Economic Secretary to the Treasury, setting out details of the progress within the Council of the EU of the legislative proposals for CRR II, CRD V and BRRD II. The letter provides details of the current proposals relating to issues including: (i) Pillar 2; (ii) IPUs; (iii) Remuneration; (iv) MREL; and (v) Contractual recognition of bail-in. The Presidency of the Council intends for the Council to agree on its general approach on these reforms at the meeting of ECOFIN on 13 March.

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ECB consults on draft guides on ICAAP and ILAAP

On 2 March, the ECB published two consultation papers on the draft principles underlying its expectations for banks' ICAAPs and ILAAPs. The draft ECB guide to ICAAP and the draft ECB guide to ILAAP are accompanied by a set of FAQs, which, among other things, explain what the ICAAP and ILAAP are, and the purpose and legal nature of the guides. The consultation closes on 4 May. The ECB will hold a public hearing on 24 April by telephone conference. It will publish the comments it receives, together with a feedback statement.

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See our Prudential Regulation section for an update on HM Treasury letters on Council of EU progress on CRD V, CRR II and BRRD II.

Implementing Regulation on ITS on MREL reporting by resolution authorities published in OJ

On 2 March, Commission Implementing Regulation (EU) 2018/308 laying down ITS on procedures and templates for the identification and transmission of information by resolution authorities to the EBA on MREL was published in the OJ. Article 45(16) of BRRD requires resolution authorities to inform the EBA of the MREL that they have set for each institution under their jurisdiction. The ITS set out minimum procedural obligations covering reporting periods and submission dates, as well as templates to be used by resolution authorities when informing the EBA of the MREL requirements that they have set. Article 45(17) of BRRD mandated the EBA to develop ITS setting out procedures and templates for the identification and transmission of this information. The EBA submitted its final draft ITS to the Commission in September 2017. The Implementing Regulation will enter into force on 22 March 2018 (that is, 20 days after its publication in the OJ).

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EC adopts proposals for regulation on European crowdfunding services providers

On 8 March, the EC published a proposal (COM(2018) 113 final) it has adopted for a Regulation on European crowdfunding service providers for business, together with an annex and FAQs. Crowdfunding is currently mainly conducted on the basis of national legislation, which means that platforms are subject to diverging rules depending on the country in which they operate. This makes it particularly difficult for platforms to provide their services cross-border. The proposal: (i) establishes a one-stop-shop access to the EU market with the aim of helping crowdfunding platforms to overcome the barriers they face operating cross-border; (ii) provides tailored rules for EU crowdfunding services providers covering both investment-based and lending-based business models; (iii) gives more opportunities to EU investors while safeguarding a high level of investor protection in relation to crowdfunding services. For example, investors will be informed about the risks associated with crowdfunding and warned about the inadequacy of these instruments as saving products. Also, before being able to invest, investors will need to take a knowledge test that will aim to assess their understanding of financial products; and (iv) defines the requirements crowdfunding service providers will have to meet to receive authorisation and provides a single point of entry for authorisation and supervision by a single authority (ESMA). ESMA will also have the power to impose fines and to withdraw the authorisation in case of serious infringements of the rules. To complement the new regulation on crowdfunding, the EC has also adopted a proposal (COM(2018) 99 final) for a Directive amending MiFID II. In the interest of legal certainty and to avoid the application of MiFID II requirements to the provision of crowdfunding services, the proposal explicitly specifies that MiFID II does not apply to persons authorised as crowdfunding service providers. The proposal forms part of a package of measures relating to deepening the CMU.

Read the proposal

Read the annex

Read the FAQs

EC communication on financing sustainable growth action plan

On 8 March, the EC published a communication on its action plan (COM(2018) 97 final) for financing sustainable growth, together with FAQs. The action plan aims to reorient capital flows towards sustainable investment to achieve sustainable and inclusive growth. This is to address the fact that current levels of investment are not sufficient to support an environmentally and socially sustainable economic system. It will also manage financial risks stemming from climate change, resource depletion, environmental degradation and social issues, and foster transparency and long-termism in financial and economic activity. In particular, actions relating to matters including the following are identified in the plan: (i) establish an EU classification system for sustainable activities; (ii) create standards and labels for green financial products; (iii) incorporate sustainability when providing financial advice; (iv) develop sustainability benchmarks; (v) foster better integration of sustainability in ratings and market research; (vi) clarify institutional investors' and asset managers' duties; (vii) incorporate sustainability in prudential requirements. In the short term, the action plan calls on the ESAs to provide direct support to the EC’s implementation by performing specific tasks, along the lines suggested in the strategy. In the longer term, the EC will consider setting up a more stable governance structure, to be operational once the legal framework on taxonomy is in place. The action plan is part of the EC’s package of proposals relating to the CMU.

Read the communication

Read the FAQs

Financial Services Act 2012 (Mutual Societies) Order 2018 published

On 8 March, the Financial Services Act 2012 (Mutual Societies) Order 2018 (2018/323) was published on together with an explanatory memorandum. The Order transfers the registration functions of the Registrar of Credit Unions for Northern Ireland to the FCA. The registration functions are exercised in relation to Northern Ireland credit unions and co-operative and community benefit societies (collectively known as "mutuals"). The registration function is being transferred to the FCA to streamline the registration process and provide greater consistency throughout the mutuals sector. Mutuals in Northern Ireland should also benefit from the increased expertise of the FCA in the sector.

The Order will come into force on 6 April 2018.

Read the SI

Read the explanatory memorandum

Building Societies (Restricted Transactions) (Amendment to the Prohibition on Entering into Derivatives Transactions) Order 2018 published

On 7 March, the Building Societies (Restricted Transactions) (Amendment to the Prohibition on Entering into Derivatives Transactions) Order 2018 (SI 2018/314) was published, together with an explanatory memorandum. This Order amends section 9A (1)(c) of the BSA 1986. Section 9A of the BSA 1986 imposes restrictions on certain types of transactions building societies and their subsidiaries can enter into, including a prohibition on trading derivatives (unless for hedging against certain external factors, such as interest rates or exchange rates). The order comes into force on 6 April.

Read SI 2018/314

Read the Explanatory Memorandum

ECB opinion on proposed Regulation amending ESRB Regulation

On 5 March, the ECB published an opinion (CON/2018/12) (dated 2 March) on the proposed Regulation amending the Regulation on EU macro-prudential oversight of the financial system and establishing a ESRB. The opinion sets out the ECB's general observation that the ESRB has played a central and successful role in preventing or mitigating systemic risks to financial stability in the EU. On this basis, the ECB supports the limited number of targeted changes to the ESRB's governance and operational framework that are proposed by the EC, with the aim of further strengthening the ESRB's efficiency and effectiveness and enabling it to better fulfil its mandate.

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FSB global shadow banking monitoring report 2017

On 5 March, the FSB published its global shadow banking monitoring report 2017.The report presents the results of the FSB’s seventh annual monitoring exercise to assess global trends and risks in the shadow banking system. It covers data up to the end of 2016 from 29 jurisdictions (including eight countries in the euro area), which together account for over 80% of GDP. The report compares the size and trends of financial sectors across jurisdictions, based on sector balance sheet data. The report then focuses on the parts of non-bank credit intermediation that may pose financial stability risks (the "narrow measure of shadow banking" or "narrow measure"), including, for the first time, a classification of non-bank financial entities in China.

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FCA quarterly consultation 20

On 2 March, the FCA published its 20th quarterly consultation paper (CP18/6). CP18/6 invites comments on proposed changes to the FCA Handbook, including: (i) changes to chapter 3 and chapter 11 of IFPRU 3.2 and 11.5; (ii) changes to reporting requirements in SUP; (iii) changes to the FCA Handbook to reflect the new London address for the FCA when it relocates in summer 2018; and (iv) the FCA's approach to applying the EBA's final guidelines on security measures for operational and security risks of payments services under PSD2 and its expectations on payment services providers (PSPs) future reporting requirements. Depending on the proposals, comments can be made until 3 April, 13 April or 3 May.

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Cryptocurrencies – BoE Governor Speech

On 2 March, the BoE published a speech by Mark Carney, BoE Governor, in which he considers: (i) what is defined as money; (ii) the advent of cryptocurrencies; (iii) how well cryptocurrencies fulfil the role of money; (iv) policymakers response to cryptocurrencies; (v) whether to isolate, regulate or integrate crypto-assets and their associated activities; (vi) the future of cryptocurrencies; (vii) the foundation of better payments; and (viii) the future of money.

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