From the EMA Financial Services Regulatory Centre of Excellence.
Fintech is once again a hot topic for the sector as the European Commission sets out its ambition (in the form of an action plan) around how to harness the opportunities presented by fintech. Regulators are becoming more active in this space in order to understand the risks and concerns associated with this ever expanding industry – a wave of fintech related legislation looms large. The same cannot be said for ‘big data’. The European Supervisory Authorities have concluded that any legislative intervention at this point would be premature, taking into account the benefits and risks associated with the use of big data.
Another forward looking action plan from the European Commission focuses on sustainable growth and the need to better align sustainability goals with economic, investment and financial stability policy-making. This action plan comprises a number of substantial proposals, with tight delivery times. All firms should pay very close attention to how these proposals progress, as they could require significant changes to firms’ processes, governance and disclosures.
In other news, the European Commission has issued three proposals aimed at promoting alternative sources of financing and removing barriers to cross-border investments – as part of the Capital Markets Union (CMU) initiative. The Commission is pushing for quick adoption of these proposals by the European Parliament and Council, along with other outstanding proposals. However, given that there are now nine CMU-related proposals that have still to be agreed with the co-legislators, it is questionable whether adoption of all elements of this package will be speedy.
Also this month we look at the Basel Committee consultation paper on Pillar 3 disclosure by banks and the associated implications for firms; the EBA consultation on its draft guidelines on the management of non-performing and forborne exposures; and the highlights from the Basel 3 monitoring exercise by the Basel Committee and the EBA.
Finally, as firms continue to assess and analyze the implications of Brexit, we look at how the loss of passport rights will impact those EEA insurers that want continued access to the UK market post-Brexit.