On 30 June 2021, there was published on the legislation.gov.uk website The Financial Markets and Insolvency (Transitional Provision) (EU Exit) (Amendment) Regulations 2021.
The statutory instrument amends The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (the 2019 Regulations). The 2019 Regulations provide for the continued operation of the legal framework for settlement finality protections after the end of the Brexit transition period by introducing a temporary designation regime (TDR). This regime ensures that non-UK systems benefitting from Settlement Finality Regulations (SFR) protection (existing EEA systems designated in other EEA states) at the end of the transition period will continue to do so for three years from that point. In order to remain in the TDR, EEA systems are required to submit an application to the Bank of England for SFR designation within 6 months following the end of the transition period.
The statutory instrument amends the consequences for systems failing to submit an application within 6 months. Instead of immediately losing settlement finality protections under the TDR, systems will retain protections for a period of 30 months following the end of the transition period. This ensures that UK firms which are using EEA systems that fail to submit an application for designation under the UK SFR, will have sufficient time to find alternative providers should those systems choose to stop providing services to UK firms.
The statutory instrument comes into force on 30 June 2021.