On the 19th February 2021, the European Central Bank (“ECB”) published its Memorandum of Understanding (“MoU”) with the Bank of England and the Financial Conduct Authority (“UK Authorities”) on post-Brexit supervisory cooperation, effective from 1st January 2021.
The MoU is one of more than 20 MoUs that the ECB has concluded with banking and market supervisory authorities in Europe and beyond in order to establish stable cooperation and information-sharing frameworks for the coordinated supervision of banks and their cross-border subsidiaries and branches.
The purpose of the MoU with the UK Authorities is to formalise the supervisory cooperation and information sharing arrangements between the authorities following the withdrawal of the United Kingdom from the European Union. Such cooperation is essential to promote the integrity, stability and efficiency of the supervised entities and financial system and focuses on the field of prudential supervision of supervised entities and their cross-border establishments.
Under the terms of the MoU, where the supervised entities and their cross-border establishments are both part of a group headquartered in a third country, the UK Authorities acknowledge to inform the third-country group supervisor of any specific arrangements agreed between the UK Authorities for cooperation and exchange of information.
The MoU sets out the principles regarding the exchange of information and assistance, the rules governing the data protection and specific provisions on certain subject matters. The circumstances in which onward disclosure of any confidential information received under the MoU may be made are set out in Article 4, along with the process which will be followed in such cases.
Moreover, the MoU represents a statement of intent between the Authorities and does not constitute a legally binding agreement. Furthermore, the MoU is neither intended to create commitments for the UK Authorities in relation to each other nor for the ECB in relation to the EU National Competent Authorities.
The MoU as well as the ECB’s legal and operational framework, published on a dedicated page on the ECB’s banking supervision website, can be directly accessed from the following link: https://www.bankingsupervision.europa.eu/press/pr/date/2021/html/ssm.pr210219~ae49c81a2a.en.html
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