Financial Stability Board
Regulation of non-bank financial intermediation - FSB publishes progress report on reforms - 18 January 2023
The Financial Stability Board (FSB) has published a progress report on the implementation of reforms to strengthen the oversight and regulation of non-bank financial intermediation (NBFI).
Among other things, the report refers to the ongoing implementation of Basel III “to mitigate spillovers between banks and non-bank financial entities”, the adoption of the International Organization of Securities Commissions’ (IOSCO) recommendations to reduce the run risk of money market funds, as well as IOSCO’s recommendations on incentive alignment approaches for securitisation. It also considers the implementation of the FSB’s recommendations for dampening procyclicality and other financial stability risks associated with securities financing transactions, which is incomplete and continues to face significant delays in most jurisdictions.
FSB Progress Report: Implementation of G20 Non-Bank Financial Intermediation Reforms
Press release
UK Government
UK net zero target - BEIS publishes final report - 13 January 2023
The Department for Business, Energy and Industrial Strategy (BEIS) has published a final report by Chris Skidmore MP, which has emerged from an independent review of the UK government’s approach to delivering its net zero target. Under the Climate Change Act 2008, the UK has a legally binding target to achieve 100% (net zero) reduction in greenhouse gas (GHG) levels by 2050.
Among the 129 recommendations is a suggestion that there should be a review of how the UK could become the most competitive financial centre for green and transition listings, capital raising and project financing. The report also notes that the government and the FCA should take the opportunity of the ongoing reform of the prospectus and listing regimes to review the rules and encourage growth in the market for green finance instruments. In addition, the report recommends that the FCA build on the proposed Sustainability Disclosure Requirement and investment labels to counter greenwashing.
Final report: Mission Zero: Independent Review of Net Zero
Financial Regulators and Complaints Commissioner
Complaints Commissioner, the FCA and the Bank of England - updated protocols - 18 January 2023
The Financial Regulators Complaints Commissioner (Commissioner) has published updated protocols, dated December 2022, governing how each of the FCA and the Bank of England interacts with the Commissioner.
The recital to each protocol explains that the Complaints Scheme applies to the relevant regulator in relation to the exercise of, or failure to exercise, certain relevant functions. The protocols address, among other things, the relationship between the Commissioner and the relevant regulator, how a complaint is investigated (including the Commissioner’s access to information and individuals and criticism of individuals), the Commissioner’s report and confidentiality.
The FCA stated in July 2022 that it was reviewing its agreed protocol with the Commissioner, and that the protocol was last reviewed in 2018.
Protocol for the relationship between the Office of the Complaints Commissioner and the Bank of England
Protocol for the relationship between the Office of the Complaints Commissioner and the FCA
Science Based Targets Initiative
Science based targets financial sector and TCFD reporting - SBTi publishes guidance - 18 January 2023
The Science Based Targets initiative (SBTi) has published new guidance to support investors in identifying overlaps between its SBTi financial institutions framework and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The guidance - developed in collaboration with Carbon Intelligence - considers the experiences of financial institutions in South Korea, the UK, China and Sweden.
The guidance provides financial institutions with a framework for assessing, disclosing and managing the climate risks to which they are exposed, and maximising opportunities for portfolio companies to cut emissions and reduce their climate impact. It also provides practical ways to harmonise science-based target setting with the preparation of robust climate-related risk and opportunity disclosures in line with institutions’ net zero transition plans.
The TCFD recommendations consider climate impact from ‘the outside-in’, focusing on the climate risks and opportunities a financial institution, its portfolios and underlying assets are exposed to. The SBTi financial institutions guidance considers climate impact from ‘the inside-out’, using backward-looking emission-based metrics to quantify financed emissions - together with forward-looking target-based metrics, such as greenhouse gas targets - to identify carbon intensive holdings.
Science Based Targets: SBTi Financial Sector and TCFD Reporting Guidance
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