March 2023

Welcome to the latest edition of KPMG Regulatory Horizons

Our new issue of KPMG Regulatory Horizons brings you the latest industry and regulatory updates affecting financial services firms across the EU and UK. This publication complements our UK-specific Regulatory Radar series.

The bigger picture

As the cost-of-living crisis continues to squeeze consumers and global geopolitical tensions rise/persist, financial services firms are functioning within an increasingly challenging environment.

In its latest trends, risks and vulnerabilities report (PDF 930 KB), ESMA noted that risks in its remit remain elevated, with particular concerns around markets and liquidity. Despite similar issues also impacting insurers (notably relating to the macro and market environment), EIOPA's latest risk dashboard found that the sector remains resilient.

The EU-UK relationship continues to evolve but the long-term implications for market access and any potential equivalence decisions remain highly uncertain. A recent report (PDF 1.33 MB) commissioned by the European Parliament's Committee on Economic and Monetary Affairs (ECON) foresees only a “limited use” of the EU equivalence regime for the UK.

Within this broader context, governments and supervisors have been publishing new policies and frameworks, alongside clarifications and supplementary guidance for existing and legacy rules.

The volume of publications by regulators on both sides of the Channel points towards increased divergence between UK and EU regulatory regimes. In the UK, the Government published its proposed Edinburgh Reforms package, regulators updated their “Initiatives Grid”, the FCA launched a discussion paper on a broad range of considerations regarding the future of UK asset management regulation, and the PRA is consulting on the liquidity and disclosure requirements for its “Strong and Simple” regime for non-systemic banks.

Meanwhile, the EU co-legislators continue to progress negotiations on various important files. These include the CRR3 proposals, AIFMD review, the Corporate Sustainability Due Diligence Directive, MiFIR and MiFID II. We are tracking the progress of these developments and regulatory divergence in the KPMG Regulatory Barometer.

Focus on the detail — articles in this edition

This edition of Regulatory Horizons focuses on some of the most critical developments. Read more via the links below: