On 7 May 2020, the Financial Services Regulatory Initiatives Forum (the Forum) published the Regulatory Initiatives Grid (the Grid). The Grid was published earlier than originally planned in response to the pressures the financial services industry is under as a result of the COVID-19 crisis. The Grid maps out the regulatory pipeline by quarter over the next 12 months and is intended to assist firms and other stakeholders with their understanding of regulatory changes that may have a significant operational impact on them, and their preparations for implementing such changes. It will run initially as a pilot and is expected to be published at least twice a year.
We set out below an overview of:
The Forum is made up of representatives from the Bank of England, the FCA, the PRA, the Payment Systems Regulator, the Competition and Markets Authority, and HM Treasury (as an observer member), and aims to strengthen regulatory coordination.
The Forum was launched in response to the Financial Services Future Regulatory Framework Review, which confirmed the benefits of effective regulatory coordination, and was also intended to respond to the recommendation for an 'air traffic control' forum in the Future of Finance report.
The Grid provides a vehicle for circulating information on the expected timing of regulatory initiatives at the date of publication, but it is not a substitute for Forum members' publications on the substance of initiatives. As a mechanism for sharing information and supporting coordination between authorities, the Forum itself does not have decision-making powers, and the content of regulation is the responsibility of individual Forum members.
Forum members may continue to change the timing and substance of initiatives and announce new initiatives going forward.
The Grid's foreword explains that authorities have cancelled or delayed several initiatives that were in the pipeline to reduce operational burdens on regulated firms. Key examples include:
The Forum confirms that it will "keep these plans under review as the situation develops, and consider whether some initiatives should be delayed further, once the longer term impact of Covid-19 on the sector, and the economy, is better understood".
The Grid's executive summary and key initiatives timeline encourages readers to consider its contents within three discrete periods: the near-term, the medium-term, and the longer-term.
Near-term (i.e. from now through the summer)
The Grid shows that during this period, the key initiative was the start of registration for the new data collection platform, replacing GABRIEL.
The Forum's main focus during this period is on responding to the impact of Covid-19 and mitigating its negative effects; relatively few policies will enter into force to free up operational capacity. This aims to allow "industry manoeuvrability" to support businesses and customers.
Medium-term (i.e. from the end of the summer to March 2021)
The Grid shows that during this period, key initiatives include:
The extension of a number of consultation periods to October may lead to the finalisation of a substantial volume of policy at around the turn of the year. This period also includes the end of the Brexit transition period which will require further regulatory initiatives. In this context, and in light of the uncertainty around the impact of COVID-19, the timing for a number of initiatives in this period has not yet been confirmed. This will require further reprioritisation by Forum members, who will continue to review the planning of policy finalisation and implementation dates to manage operational demand.
The longer term (i.e. April 2021 and beyond)
During this period, key initiatives include:
Considerable implementation lead-time has been provided for most high impact initiatives, many of which relate to globally agreed regulatory objectives and the implementation of international standards. The Grid notes that even for some of these longer-term initiatives, Forum members may need to reconsider implementation milestones.
The Grid is organised by sector, and also includes a 'multi-sector' chapter covering cross-sectoral initiatives.
The sectors are as follows:
Chapters generally include a brief introduction, highlighting the most significant initiatives in connection with the operational impact on firms.
For each initiative, the Grid sets out information about:
Criteria for inclusion
Initiatives may be included in the Grid if they meet two criteria: they must represent "public information" i.e. information which has been made available through each of the Forum members' regular communication channels, and also have an individually significant operational impact during their implementation by firms. This second requirement means that the initiative is one that the Forum believes is likely to consume a "meaningful amount" of firms' time and resources.
Initiatives led by international bodies, where Forum members are not playing a substantial role in their implementation in the UK, are not included. Similarly, the Grid does not include enforcement actions and most supervisory activities which are firm-specific.
Changes in future
Owing to the pilot's early launch in the context of the global pandemic, certain features are likely to change in future editions. For example, such editions are likely to cover a period of 24 rather than 12 months, and will have fewer indicative or indeterminate timing projections.
The Forum encourages firms and other stakeholders to provide feedback on the pilot by contacting FSRIFSecretariat@fca.org.uk.
If you have any questions regarding the regulatory pipeline or are interested in hearing more about initiatives affecting specific sectors, please get in touch.