With the summer, such as it was, moving into the rear-view mirror and memories of the holidays (for those lucky enough to have had one) starting to fade, we are now firmly in back-to-school and back-to-work territory. In order to help with the readjustment, we thought it would be useful to provide you a round-up of some of the key regulatory developments over the summer, from mid-July to end-August. A sort of ICYMI of regulatory developments, because - as we all know - regulators and regulations never stop.
We therefore asked the relevant experts in our EMEA Centre for Regulatory Strategy to tell us which regulatory developments in their sectors had stood out most for them. The results are available to download in the PDF below and are organised by sector (banking, capital markets, insurance and investment management) and by theme (sustainable finance, FinTech, conduct, financial crime and operational resilience). We’ve set out below some of the issues that particularly caught our eye.
Sustainable finance continued to be very active, and no doubt the pace will quicken even more in the run-up to COP26 in November. The ECB’s preliminary findings from its work on banks’ progress, or in some cases lack of it, towards meeting its climate risk guidelines was a timely reminder of just how much more work remains to be done before climate is fully incorporated into banks’ risk governance frameworks. There is useful information in here for UK firms as well, given that the PRA’s deadline for banks and insurers to meet the expectations set out in its “Dear CEO” letter is the end of this year.
There was plenty of activity on the insurance front. The PRA is gearing up for the eagerly awaited review of Solvency II, the first step of which takes the form of a QIS and a qualitative questionnaire. The FCA also had a lot to say about insurance from a conduct perspective, setting out its concerns and how it expects insurers to react in a review of how general insurers have implemented its distribution chain guidance and in its supervisory strategy for life insurers.
Notably, on the conduct agenda, the FCA consulted on proposals to improve disclosure of diversity on listed company boards and executive committees. This follows its recent discussion paper with the PRA and BoE on improving diversity and inclusion in financial services, and leaves no doubt as to the importance the regulators attach to these issues.
Finally, the FPC noted that firms’ increasing reliance on a small number of CSPs and other critical third parties for vital services could increase financial stability risks in the absence of greater direct regulatory oversight of the operational resilience of the services they provide. Consequently, the FPC concluded that additional policy measures, some potentially requiring legislative change, would be needed.
Our highlights barely scratch the surface of the breadth of regulatory developments over the summer, but we hope they whet your appetite for the rest of the document.
Please click below to download our full slide deck of the summer's regulatory updates.