On November 16, the UK’s HM Treasury, Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) jointly published a statement on the introduction of the new Investment Firms Prudential Regime (IFPR) and the UK implementation of Basel standards reflecting the CRR II Regulation (the Statement).
The European Union’s own reforms of regulatory capital/ prudential rules (the Investment Firms Directive and Regulation (collectively IFR)) are scheduled to go into effect on June 26, 2021; however, the UK Government has not committed to implementing the IFR in the UK in light of the Brexit transition period ending at 23:00 UK time on December 31. This is, in part, because of what the Statement refers to as “the general volume of regulatory reform in 2021”. However, HM Treasury, the FCA and the PRA have set a target to implement UK-specific and similar reforms by January 1, 2022. This does not affect the target implementation date for the final Basel III reforms (known as Basel 3.1) of January 1, 2023.
In the Statement, HM Treasury indicates that it will ensure the relevant legislation will be introduced in good time, and the FCA and the PRA collectively aim to provide the industry with as much insight on the final rules as possible ahead of January 1, 2022.
The legislative framework for these reforms will be introduced through the Financial Services Bill 2019-21.
The Statement is available here.