On 27 June 2018, the Bank of England (BoE) issued a statement on its website concerning its approach to financial services legislation under the European Union (Withdrawal) Act 2018 (the Act).
Key points in the statement include:
- the BoE intends to consult, in coordination with the FCA when appropriate, on proposed changes to on-shored EU binding technical standards (BTS) and rules this Autumn. The BoE plans to do this following HM Treasury’s (HMT) publication in draft, or laying before Parliament, of statutory instruments relating to most of its regulatory remits;
- the changes set out in HMT’s statutory instruments, and the BoE’s changes to BTS and rules, would largely only come into force on 29 March 2019 in the eventuality that the implementation period is not put in place;
- the BoE does not expect firms providing services within the UK’s regulatory remit to have to prepare now to implement the changes given that HMT intends to provide the UK regulators with powers to grant transitional relief;
- if the implementation period does not take effect on 29 March 2019, HMT will bring forward legislation under the Act to create temporary permissions and recognition regimes for a time-limited period after the UK has left the EU; and
- during the implementation period the UK would continue to be treated as part of the EU’s single market in financial services. EU law would continue to apply to UK firms during this period, from 29 March 2019 to 31 December 2020. UK firms should plan on the assumption that requirements arising from new EU legislation that come into effect during this period will apply to UK firms and financial market infrastructures.