Changes to lease accounting take effect: IFRS 16 comes into effect for accounting periods beginning on or after 1 January 2019. The new accounting standard aligns the treatment of operating leases and finance leases.

Read our overivew here.

EU insolvency harmonisation directive: The EU is expected to agree its position on the proposed EU Directive on business insolvency reform (the EU insolvency law harmonisation project).

Read more on the proposed directive here and on EU insolvency harmonisation benefits here.

Bank recovery and resolution: The EU is expected to finalise proposed amendments to the Bank Recovery and Resolution Directive. Changes include new pre-resolution moratoria, clarification on the contractual recognition of bail-in requirement and alignment of European MREL requirements with TLAC.

EU NPL reforms: In March 2018, the European Commission published a draft Directive and Regulation, aimed at accelerating the reduction of NPLs in Europe. The proposals in the draft Directive would require implementation by 2021. The UK has opted-out of some of the proposals.

Read our overview of the NPL drafts.

Airline insolvency review: In April, the Government announced a review to examine protection for air passengers in the event of an airline’s insolvency. The Government is looking at what practical arrangements are needed to get passengers home if sufficient capacity does not exist in the market and how passengers and taxpayers can best be protected from the financial impacts of an airline failure. An interim report was published in July, with a final report expected by early 2019.

Sustainable finance: Further developments are expected in relation to the EU’s sustainable finance action plan. The plan includes a proposed Regulation which would introduce disclosure obligations on how institutional investors and asset managers integrate environmental, social and governance factors in their risk processes and a proposal for a Regulation amending the Benchmark Regulation to create a new category of benchmarks comprising low-carbon and positive carbon impact benchmarks.

Merger control: In July 2017, the European Commission issued Statements of Objections to each of Merck/Sigma-Aldrich and General Electric for allegedly providing incorrect or misleading information during a merger review, and to Canon for the alleged early implementation of Toshiba Medical Systems Corporation before notification and clearance. The long-awaited decisions are expected in all three of these cases in 2019.

Read our overview of the cases.

Shareholders Rights Directive: Rules for more transparency of ownership, voting and investment strategies and Europe-wide ‘say on pay’ are expected to enter UK law by June 2019.

Prospectus Regulation: The remaining parts of the EU Prospectus Regulation are due to be implemented in July 2019. Key areas of change will be the exemptions from the requirement to produce a prospectus, the treatment of risk factors and the regime for secondary issuances.

Corporate governance: The Government is set to publish further reform proposals focussing on reducing the risk of major company failures through poor governance or stewardship and strengthening the UK insolvency regime.

High court disclosure: In January, a new disclosure regime will come into force in the Business & Property Courts, designed to encourage greater flexibility in process and co-operation between litigants.

Foreign investment control: The EU institutions have reached a political agreement on the content of a new regulation to screen foreign investments in the EU, which is expected to become law in 2019. In the UK, the National Security and Investment White Paper published in July proposes far-reaching reforms to foreign investment deals which raise national security concerns and primary legislation is expected in 2019.

Read more here and here...

ePrivacy Regulation: During 2019 the EU is expected to adopt this Regulation which supplements the General Data Protection Regulation and contains specific rules on the use of cookies and electronic marketing.

Global reach of the “right to be forgotten”: In 2014, the EU Court of Justice decided that individuals had a right to ask that their personal information be removed from Google search engine in certain circumstances. In 2019 the EU Court of Justice is expected to decide if that right just applies to search engines available in the EU or should apply on a global basis.

EMIR: Changes to EMIR under the REFIT proposal are expected to come into force early in 2019 and amendments to CCP supervision are anticipated later in the year.

Read our update on the EMIR REFIT proposal.

EU Securitisation Regulation: The Regulation which consolidates existing risk retention, disclosure and due diligence requirements and establishes a new regime for simple, transparent and standardised (STS) securitisations will apply from 1 January 2019.

Anti-money laundering: MLD5 came into force in July and will need to be implemented by January 2020.

Read our alert on the directive.

SMCR extension: The Senior Managers and Certification Regime will be extended to insurers in December 2018 and to all other regulated firms in December 2019.

Explore more on our SMCR microsite.

Payment services: The revised Payment Services Directive (PSD2) applied from January 2018 (except for the security measures on Strong Customer Authentication and Secure Communication, which is scheduled for September 2019). The FCA is consulting on proposed standards and communication requirements for PSPs and e-money issuers.

Clarity on co-operation with regulators: The FCA is expected to publish its finalised Approach to Enforcement and will review its penalty policy and Enforcement Guide.

Read our overview of the FCA's approach.

CRR 2 & CRD 5: The adoption of this update to EU bank prudential rules is expected in 2019. The legislation will implement agreed Basel standards such as the leverage ratio and net stable funding ratio. However, the legislation also includes EU specific measures including requirements for non-EU banking groups active in the EU to establish EU intermediate parent undertakings. Many provisions will be subject to a two-year phase-in, potentially applying from 2021.

Prudential regulation of investment firms: The new EU prudential framework for investment firms is expected to be concluded in the first half of 2019. The framework includes new remuneration rules and simpler capital rules for smaller investment firms.

PRIIPs regime review: EU institutions are expected to take legislative action to avoid the duplicating information requirements from 1 January 2020 under UCITS KIID and PRIIPs KID, and to address issues that have arisen from the practical application of the PRIIPs Delegated Regulation on KID. An amendment to PRIIPs Regulation pushing back the review deadline and the UCITS exemption is expected to be adopted by mid-2019. The European Commission is also expected to adopt targeted amendments to PRIIPs Delegated Regulation on KID by mid-2019.

Interest rate reform: With continued regulatory emphasis on transition away from LIBOR, and IBORs more generally, further developments are expected during the course of 2019, including the publication of ESTER (the euro risk-free rate). Initiatives to support market participants in this transition, including work to identify appropriate adjustment spread methodologies and consideration of term risk-free rate structures for use in certain cases, in particular corporate borrowing and securitisations, are expected to continue. Read more.

Expanding FOS jurisdiction: The Financial Ombudsman Service will assume jurisdiction from 1 April 2019 over complaints by larger SMEs, charities and trusts. A corresponding increase to its maximum compensation from £150,000 to £350,000 is also proposed.

Supervision of internationally active insurance groups: In November 2019, the International Association of Insurance Supervisors is expected to adopt requirements on the supervision of “Internationally Active Insurance Groups”, alongside a new capital standard that will apply to such groups.

Read our alert.

Overseas entities register: The Registration of Overseas Entities Bill, which will introduce a new register of the beneficial owners of overseas entities that own or wish to buy or let UK property, is expected to be laid before Parliament in early 2019 with the new register operational in 2021.

Read our briefing on overseas owners.

CGT for non-resident investors disposing of UK property: From April 2019, non-resident investors will be subject to UK tax on gains from disposals of both residential and commercial UK real estate. Direct disposals and certain disposals of other assets (such as shares) which derive 75% or more of their value from UK land will be caught.

Read our overview.

Digital services tax: A proposal for an EU Directive on the common system of a digital services tax on revenues resulting from the provision of certain digital services could be adopted by April 2019. The UK is also consulting on its own domestic 2% DST to apply from April 2020.

Read our UK Budget overview for more information.