FCA Legislation Update

On 26 April 2013, the FCA published its first Policy Development Update (PDU) for April 2013 which details forthcoming FCA publications relating to a number of areas, including RRP, client assets and EMIR, as detailed below.

High level standards

Initiative

Current Expected Publication Date

Previous Expected Publication Date

Recovery and Resolution Plans: policy statement to CP11/16

Q2 2013

Q2 2013

Policy statement on non-EEA national depositor preference regimes

TBC

Business Standards

Initiative

Current Expected Publication Date

Previous Expected Publication Date

Client assets regime – multiple client money pools – policy statement to part 2 of CP12/22

June 2013

Q2 2013

Client assets review – consultation paper

June 2013

Review of the client money rules for insurance intermediaries – policy statement to CP12/20

Q3/4 2013

Q3/4 2013

CRD IV – consultation paper on strengthening capital standards

Q3/4 2013

TBC

 

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RRPs for CCPs within the EU by the end of 2012

On 26 June 2012, the FSA published a speech on the issue of derivatives reform given by David Lawton, Acting Director of Markets, to the IDX International Derivatives Expo in London.

Mr Lawton noted that good progress had been made in reforming derivatives markets, but that issues were outstanding in four main areas:

  • rules for bilateral collateralisation of uncleared trades;
  • recovery and resolution plans for central counterparty clearing houses (CCPs);
  • promoting consistent cross-border application of requirements; and
  • ensuring the readiness of firms, both financial and non-financial, which are not currently clearing OTC derivative trades.

Mandatory clearing will increase the amount of risk concentrated in CCPs.  In turn, this brings into focus the importance of effective recovery and resolution planning for CCPs, which will be the subject legislation at an EU level before the end of 2012.  In addition, the Committee on Payment and Settlement Systems (CPSS) and International Organisation of Securities Commissions (IOSCO) are due to publish a consultation paper on this issue.  This is likely to be based on the FSB’s “Key Attributes of Effective Resolution Regimes for Financial Institutions”, which were published in October 2011.  The consultation paper will seek to identify whether and how each Key Attribute applies to a Financial Market Infrastructure (FMI) and what special guidance may be needed for FMIs, authorities and other parties.

The text of the speech is available here.