EBA Brexit Relocations Guide
On Oct. 12, EBA issued guidance on authorizing relocating Brexit firms.
- For businesses seeking to establish or enhance EU27 presence for market access.
- To provide greater certainty to firms and ultimately ensuring a level playing field.
- Address policy on authorizations, prudential, and supervision of investment firms.
- Using models, outsourcing, governance, risk transfer via back-to-back operations,
- Consider impact of later resolution and how deposit guarantee schemes can cope.
- EBA will monitor implementation, continue working on challenges following Brexit.
- Apply the existing legal framework in a consistent and harmonious way across EU.
- Avoid competition on regulatory or supervisory standards to attract new business.
- Do not impose unnecessary rule burden on firms, but maintain existing standards.
- Cooperation and coordination between supervisors, is important now and in future.
- Authorisation Standards
- Existing authorisation standards should not be lowered, apply ongoing standards .
- Firms seeking authorisation should have rigorous assessment on the regulations.
- Require clear explanation of choices firms are making on substance of new entity.
- Empty shell companies should not be authorised, require local presence and staff
- Minimize burden on firms by using existing information held and by cooperation.
- Prudential Standards
Provision of investment services to be subject to adequate prudential supervision.
EU firms use a updated prudential framework per EBA report on investment firms.
Systemic investment firms established in euro-zone should be supervised by ECB.
Services by third country investment firms should also adequate prudential rules.
Brexit may impact new resolution reform, or building up loss absorbing capacity.
Issuance of liabilities eligible for MREL, takes place in the UK under English laws.
Set under the minimum requirement for own funds and eligible liabilities (MREL).
Consider impact of UK departure for build-up of MREL, and take steps to mitigate.
||ECB; EU EBA; UK PRA
||EBA/Op/2017/12, PR, 10/12/2017,CRD/CRR, Dir 2013/36, Reg 575/2013, Brexit
||Financial; Reporting; Risk; Treasury
||European Union; United Kingdom; Cross-Border
Last substantive update on 10/13/2017