UPDATE 2-Britain decouples from EU with delay to bank and investment rules

Mon, 16th Nov 2020 12:30

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By Huw Jones

LONDON, Nov 16 (Reuters) - New capital rules for banks and
investment firms will be implemented at the start of 2022, six
months later than originally indicated to give industry more
time to prepare, the British authorities said on Monday.

The deadline is six months after the European Union's June
2021 date for implementing its versions of the rules, showing
how Britain is decoupling from EU financial regulations as
post-Brexit transition arrangements finish at the end of 2020.

The rules comprise Britain's Investment Firms Prudential
Regime, which covers capital requirements for investment firms,
and some changes to capital requirements agreed globally by the
Basel Committee after the financial crisis a decade ago.

"We have decided to target an implementation date of 1
January 2022 for these two regimes," the Bank of England,
Financial Conduct Authority and Britain's finance ministry said
in a joint statement.

Britain previously indicated it would introduce the bank
capital rules at the same time as the EU, but had not said when
it would introduce the investment firm capital rules.

The authorities said the decision to delay was a response to
feedback from the industry, which had raised "concerns about the
general volume of regulatory reform in 2021."

The delay will be welcomed by investment firms but it pushes
back the shift to a simpler capital regime for British companies
that EU rivals will benefit from six months earlier, said Ash
Saluja, a financial services lawyer at CMS.

"This is a significant example of post-Brexit divergence
between the UK and EU regulatory regimes," Saluja said.

The Basel Committee, a global body of banking supervisors
that includes the Bank of England, said in March implementing
the final leg of its capital rules could be delayed to January
2023. UK regulators have said they will apply this new deadline.

(Reporting by Andy Bruce and Huw Jones; Editing by William
Schomberg and Edmund Blair)