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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | June 2023
On June 19, 2023, the Bank of England announced the launch of its first system-wide exploratory scenario (SWES) exercise and published a new webpage setting out relevant information.
The Bank has asked a group of banks and non-bank financial institutions (NBFIs) to provide information on how they react to turbulence in financial markets, such as the gilts crisis in autumn 2022.
The Bank hopes to enhance its understanding of the risks to and from NBFIs, and the behaviour of NBFIs and banks in stress, including what drives those behaviours. It also hopes to investigate how those behaviours and market dynamics can amplify shocks in markets and potentially pose risks to UK financial stability.
Participating entities include large banks, insurers, central counterparties and a variety of funds (including pension funds, hedge funds and funds managed by asset managers). It will publish a list of participants later in 2023.
The Bank has worked with the FCA and the Regulator on the SWES, which is not intended to be a test of the resilience of the individual participants. Instead, the Bank is focusing system-wide and aims to examine the resilience in times of stress of important UK financial markets, such as the gilt market, gilt repo market, sterling corporate bond market and associated derivative markets.
The initial information gathering phase of the SWES will help the Bank in designing and executing an effective stress scenario. Later in 2023, it will ask those involved to evaluate the impact of a severe but plausible stress to global financial markets.
A full list of participants is due to be published later in 2023, with a concluding report due in 2024.
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On 21 November 2023 and following extensive consultation periods, the amendment to the Climate Delegated Act (Delegated Regulation (EU) 2021/2139 of 4 June 2021) (the Climate Delegated Act) was formally adopted by the European Commission and published in the EU Official Journal (Delegated Regulation (EU) 2023/2485 of 27 June 2023) (the Climate Delegated Act Amendment).
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