On 1 December 2020, the Bank of England (the Bank) updated its webpage regarding information on the effect of the UK’s withdrawal from the EU on financial market infrastructure (FMI) supervision.
New text under the heading “Recognition of non-UK CSDs” has been inserted which states:
“On 25 September 2020, the UK parliament has further approved legislation, and the Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020 (“Equivalence Determinations SI”) came into force on 30 September 2020. Under this legislation, if HMT makes any equivalence decisions in relation to the EEA during the transition period, EEA CSDs will be able to apply to the Bank for recognition before the end of the transition period and, in any event, must submit a formal recognition application within 6 months from the end of the transition period. As equivalence decisions in relation to each EEA state have been made by HMT on 9 Nov 2020, the Bank further published a letter to EEA CSDs to notify them of the actions that they need to take, including the guidance that sets out the manner in which such a recognition application may be made and the information that must accompany it.
The Equivalence Determinations SI supplements existing legislation that provides for equivalence and recognition decisions after the end of the transition period. The procedure for other non-UK (excluding EEA) CSDs remains unchanged and no equivalence decisions will be made by HMT until after the end of the transition period. As the end of transition period is approaching, the Bank has also published a letter to non-EEA CSDs to remind them the action they need to take to prepare for the end of transition period.
The Bank has published an interim list of CSDs that intend to provide CSD services in the UK using transitional provisions. These provisions come into operation at the end of the transition period. This is an interim list as of the date listed in the document. It is subject to change and will be updated periodically until the end of transition period. The final list will be published on the Bank’s website at the end of the transition period.”
The Bank has also added hyperlinks to the documents it mentions in the new section above.
The Bank has also inserted the following new text under the heading “Non-UK recognition fees”:
“Following the consultation and having considered the feedback received, the Bank has decided to introduce a recognition fee of £30,000 for each non-UK CSDs recognition. The fee will be payable once the non-UK CSD has been recognised by the Bank.”