The UK government is consulting on the UK's future regulatory framework, looking at how the current framework may need to adapt to be fit for the future. In particular, the consultation looks at the way in which powers to make new laws and rules should be allocated between Parliament, Treasury and the regulators, and what changes may be needed to the current position to reflect the UK's new status outside the EU. In this call, we provided an overview of the main policy options considered in the consultation and their potential implications for the future UK regulatory framework. Kikun Alo chaired the discussion with colleagues Laura Douglas and Diego Ballon Ossio.

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The Financial Services Bill was introduced to Parliament on 21 October 2020. The bill is the first step to ensure the UK's regulatory framework for financial services continues to function effectively now that the UK has left the EU, and is designed to enhance competitiveness of the sector and ensure UK customers are protected. In this series of Insights on Financial Regulation, we will look at how the Financial Services Bill will impact your firm.

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In addition to implementing EU-wide regulatory reforms, national regulators across EU Member States continue to pursue their own domestic regulatory agendas. One area where we see various Member States taking action relates to the use of new technologies in financial services, whether in relation to regulation of cryptoassets, outsourcing to cloud service providers or use of artificial intelligence in decision making. In this call, Christian Hissnauer, Riccardo Coassin and Eduardo García discussed recent domestic legislative and regulatory developments in this area in Germany, Italy and Spain, comparing and contrasting the approaches and areas of supervisory focus being taken in their respective jurisdictions.

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In addition to implementing EU-wide regulatory reforms, national regulators across EU Member States continue to pursue their own domestic regulatory agendas. One area where we see various Member States taking action relates to the use of new technologies in financial services, whether in relation to regulation of cryptoassets, outsourcing to cloud service providers or use of artificial intelligence in decision making. In this call, Hélène Kouyate, Udo Prinz and Thom Beenen discussed recent domestic legislative and regulatory developments in this area in France, Luxembourg and the Netherlands, comparing and contrasting the approaches and areas of supervisory focus being taken in their respective jurisdictions.

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The EU Securities Financing Transactions Regulation introduces requirements for counterparties to report the details of their securities financing transactions (SFTs) to trade repositories. These requirements will be phased in from April 2020, with banks and investment firms caught in the first wave. However, a number of practical questions remain outstanding about how firms are expected to implement and comply with these reporting requirements, with ESMA expected to publish its final SFT reporting guidelines shortly. EMIR Refit is also introducing changes to the EMIR reporting regime for derivatives, including mandatory delegation provisions under which financial counterparties will become legally responsible for reporting on behalf of non-financial counterparties that fall below the clearing threshold from 18 June 2020. At the same time, ESMA is due to submit revised implementing technical standards on derivatives reporting to the Commission, which may herald yet further technical changes in the way derivatives are to be reported. On this call, Caroline Dawson, Paul Lenihan and Clemens-Emanuel Gutwenger discussed some of the key questions and practical implementation challenges arising from ongoing work to prepare for SFT and EMIR Refit reporting, what firms should watch out for in the final ESMA guidelines once published and what firms can expect to see in terms of a regulatory focus on reporting going forward.

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How are outsourcing arrangements treated by UK regulators, particularly in the wider context of operational resilience? This call provided an overview of the outsourcing regulatory framework and lessons learnt from recent regulatory investigations. Monica Sah and Nick Grafton-Green discussed the current regulatory mindset, what may lie ahead and the implications for businesses.

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As we look ahead to the start of the new European Commission's term on 1 November, now is a good time to take stock of upcoming implementation challenges for firms under EU financial services legislation, as well as to review possible future legislation. The European Parliament and the Council of the EU reached agreement on more than 20 new EU directives and regulations directly affecting the financial services sector during the last sessions of the previous European Parliament before the June elections. Some of these texts received a lot of attention from firms during the negotiation stage, whereas others may have flown under firms’ radar. Clifford Chance has prepared a stocktake of this new legislation and other outstanding EU financial services legislation awaiting implementation, as well indicating what legislative proposals have been carried over to the new term and the ongoing and upcoming reviews of current legislation. During this call, Chris Bates, Caroline Dawson and Steve Jacoby discussed key implementation issues for firms arising from this new legislation and other outstanding EU financial services legislation, as well as discussing what future legislative proposals and other developments we might expect to see under the new European Commission.

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