XBRL – The Financial Services Authority (FSA) UK Context The FSAs perspective on the use of XBRL...
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Transcript of XBRL – The Financial Services Authority (FSA) UK Context The FSAs perspective on the use of XBRL...
XBRL – The Financial Services Authority (FSA) UK Context
The FSA’s perspective on the use of XBRL (eXtensible Business Reporting Language)
for data exchange with the industry in the UK and other financial regulators
Presented by : Ayan Kar
XBRL Cross Sector Seminar (Members only session)
Madrid, Spain, 1st Jun 2012
1Copyright © The FSA, UK, 2012
FSA Unrestricted
Agenda
1. The FSA’s scope of regulation
2. Data exchange methods
3. The historical background of XBRL in the FSA
3. Regulatory reform in the UK
4. Potential benefits
3
FSA Unrestricted
1. About the FSA
• Key characteristics:– Independent body that receives all its funding through a levy on the financial services industry
– Accountable to H.M. Treasury and, through them, Parliament
• Statutory objectives: – Market confidence
– Financial stability
– Consumer protection
– Reduction of financial crime
• Scope includes:– Any firm or individual that carries out a regulated financial service market activity in the UK must be
authorised by us, unless they are exempt.
– This includes over 27000 entities spanning across major financial organisations, small firms and independent financial advisors
• The regulatory reporting data:– Collected using proprietary XML standards and there over 80 data items collected by the FSA as specified
in out handbook
– Defined for the firms depending on its size and permissions granted to it
“The Financial Services Authority (FSA) is a non-governmental body with statutory powers given to it by the Financial Services and Markets Act 2000.” (Source www.fsa.gov.uk)
4
FSA Unrestricted
1.1. Our scope – who do we regulate?
We regulate more than 27000 entities within the UK that span different business types and are subject to different aspects of regulation. One of our key challenges lie in managing diversity of regulatory policies & the population.
Breakdown by Entities allowed to hold Client Assets (CASS)
Breakdown by Entities allowed to hold Client Assets (CASS)
Firms in scope for MIFID ϕ Markets Conduct Regulation
Firms in scope for MIFID ϕ Markets Conduct Regulation
Circa 10% of Firms are subject to Prudential Standards for Banking,
Investment Firms & Building Societies ϕϕ
Circa 10% of Firms are subject to Prudential Standards for Banking,
Investment Firms & Building Societies ϕϕ
ϕϕ Firms most impacted by EBA and EIOPA directivesϕ Firms mostly impacted by ESMA directives
Breakdown by business typesBreakdown by business types Breakdown by Legal StatusBreakdown by Legal Status
5Copyright © The FSA, UK, 2012
FSA Unrestricted
UK Regulatory Architecture (Internal Twin Peaks
Apr 2012)
FSA (Financial Services Authority)
Prudential Business Unit
(PBU)
Conduct Business Unit
(CBU)
2. Data exchange methodsThe existing data exchange arrangements are based on the Integrated Reporting Standards that were adopted in 2006, these are based on proprietary XML standards developed by the FSA.
Not SpecifiedOpen-ended investment company
(OEIC)
Insurance Firms
Deposit Takers
Investment Managers
Services (UK) of an Overseas Firm
Advising, Arranging & Dealing as agent
Others
Th
e F
SA
Re
gu
late
d E
nti
tie
s (
De
fin
ed
by
FS
MA
20
00
)
XML
So
lve
ncy
I (
cir
ca
. 6
50
firm
s)
CR
D
& C
RR
(c
irc
a.
28
00 f
irm
s)
XML
UK Regulatory Bodies
H.M. Treasury
Bank of England
HMRC
European Insurance & Occupational
Pensions Authority (EIOPA)
European Banking Authority
(EBA)
European Securities &
Markets Authority(ESMA)
XML / Ad Hoc
XML
XML
XML
TRUP
TRUP
MIF
ID (
cir
ca
46
00 f
irm
s)
6Copyright © The FSA, UK, 2012
Pru
de
nti
al
& B
usi
ne
ss
Co
nd
uc
t (
Fin
anc
ial S
erv
ice
s &
Mar
ke
ts A
ct
20
00
)
XML
FSA Unrestricted
3. Historical background of XBRL in the FSA
We decide what data to collect and how to collect it based on the following criteria, these activities span multiple years:
• Amendment of the Handbook rules through a Legal process, Cost Benefit analysis and Public consultation • Policy driven initiatives like, Integrated Regulatory Reporting, Liquidity, Solvency II and Capital Requirements
Directive by the EU
May
20
02 Sep
20
03 Mar
20
04
May
20
05 Nov
20
06 Apr
20
10 Apr
20
11Ju
l 20
11
June
20
12 Mar
20
13
2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 20132010
(All updates sourced from www.fsa.gov.uk)
7
FSA Unrestricted
4. Regulatory reform in UK
Financial markets have changed in the ten years since our inception. The Government has decided that in today’s market it is appropriate for the prudential supervision of banks and insurance companies to be carried out separately from work to protect consumers and regulate markets. The Government has therefore decided that the FSA will be divided and its activities split between two new regulators.
New revised distribution of firms
The new Financial Conduct Authority (FCA) will focus on getting a fair deal for consumers. It will regulate the conduct – the way a firm behaves and interacts with its customers – of some 27,000 firms, as well as the prudential supervision of around 24,500 firms.
The new Financial Conduct Authority (FCA) will focus on getting a fair deal for consumers. It will regulate the conduct – the way a firm behaves and interacts with its customers – of some 27,000 firms, as well as the prudential supervision of around 24,500 firms.
The new Prudential Regulation Authority (PRA), a subsidiary of the
Bank of England, will be responsible for ensuring our
financial system is stable. It will supervise the ‘safety and
soundness’ of around 2,000 firms.
The new Prudential Regulation Authority (PRA), a subsidiary of the
Bank of England, will be responsible for ensuring our
financial system is stable. It will supervise the ‘safety and
soundness’ of around 2,000 firms.
8
FSA Unrestricted
UK Regulatory Architecture (post legal
cutover Mar 2013)
Prudential Regulatory Authority
(PRA)
Financial Conduct Authority
(FCA)
Data Sharing
4.1. Impact on data exchange
Data exchange arrangements post regulatory reform, CRD IV & SII implementation are likely to get more complex.
FC
A R
eg
ula
ted Professional Entities
Insurance
Not SpecifiedOpen-ended investment company
(OEIC)
Investment Managers
Services (UK) of an Overseas FirmAdvising, Arranging & Dealing as
agent
Others
Branch (UK) of a Overseas Firm
BankingAdvising, Arranging & Dealing as
agent
Insurance
Services (UK) of an Overseas Firm
Insurance Firms
Deposit Takers
Others
PR
A /
Du
al
Re
gu
late
d
European Banking Authority
(EBA)
European Insurance & Occupational
Pensions Authority(EIOPA)
European Securities &
Markets Authority(ESMA)
UK Regulatory Bodies
H.M. Treasury
Bank of England
HMRC
MIF
ID (
cir
ca
46
00 f
irm
s)
TRUP / FPML
XML / Ad Hoc
XBRLXB
RL
XBRL
TRUP /
FPMLXBRL
CR
D I
V (
cir
ca
. 2
800
fir
ms
)
XML /
Ad Hoc a
nd
Unstru
cture
d
Co
ns
um
er
Co
nd
uc
t &
Pru
de
nti
al
Su
bm
iss
ion
s (F
ina
nc
ial S
erv
ice
s B
ill
201
2)
TBC
??
Pru
de
nti
al
no
n-C
RD
Su
bm
iss
ion
to
PR
A
XBRL
So
lve
ncy
II
(cir
ca
. 6
50
firm
s)
9Copyright © The FSA, UK, 2012
FSA Unrestricted
5. Potential benefits
10