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FCA update – postponed deadlines – Basel 3.1 and bilateral margin obligations

FCA update – postponed deadlines – Basel 3.1 and bilateral margin obligations

Background

  • The Financial Services Regulatory Intiatives Forum (“the Forum”) is made up of representatives of the Bank of England, Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), Payment Systems Regulator (PSR), Competition and Markets Authority (CMA), and HM Treasury (HMT; as an observer member).
  • To reduce operational burdens in response to Covid-19, Forum members have taken action during 2020 to help regulated firms deal with Covid-19.
  • Authorities have worked closely with regulated firms and the UK Government to co-ordinate this response in the most effective way.
  • One part of this response has been to cancel or delay several initiatives to reduce operational burdens on firms.

Impacts

Relevant examples of these changes include the revised (delayed) date for some international implementation, e.g. the implementation date for Basel 3.1 and the timings for phases five and six of enhanced bilateral margin obligations.

The revised dates are as follows:

  • Bilateral margin obligations phases 5 & 6

New requirements for non-cleared over the counter derivative contracts.

1 September 2021: Implementation of phase 5

1 September 2022: implementation of phase 6

  • Implementation of the remaining Basel III standards (Basel 3.1)

Implementation of the reformed Basel III banking standards (also known as Basel 3.1) by the international deadline.

1 January 2023: Basel implementation deadline

The FCA notes that further adjustment actions will be included in the UK’s upcoming Financial Services Bill.

Timeline with relevant dates to be logged on regulatory calendar

  • 1 September 2021: Implementation of phase 5 of bilateral margin obligations
  • 1 September 2022: implementation of phase 6 of bilateral margin obligations
  • 1 January 2023: Basel implementation deadline for remaining Basel 3.1 standards

Next steps

All firms need to focus on delivery against these known regulatory initiatives and must also note the revised implementation dates.

Detailed information is available on the FCA website for all these regulatory changes and initiatives.  For any further queries or to discuss further, the FCA Supervision Hub on 0300 500 0597 is the primary contact for a firm’s day-to-day interactions with the FCA.

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