On 23 November 2018, HM Treasury issued explanatory information on The Benchmarks (Amendment) (EU Exit) Regulations 2018. The draft statutory instrument is yet to be published.
HM Treasury explains that the draft statutory instrument is part of its wider work to prepare for the UK’s withdrawal from the EU. The draft statutory instrument is not intended to make policy changes, other than to reflect the UK’s new position outside the EU, and to smooth the transition. The changes made in the draft statutory instrument will not take effect on 29 March 2019, if the Withdrawal Agreement is ratified and the implementation period occurs.
The draft statutory instrument will make amendments to retained EU law related to the EU Benchmarks Regulation to ensure that it continues to operate effectively in the UK once the UK has left the EU. UK-located benchmark administrators seeking authorisation or registration will continue to apply to the FCA. However, the draft statutory instrument will:
- clarify that the scope of the onshored Regulation is the UK, and not the whole of the EU; and
- ensure that EU located administrators are subject to the onshored third country regime, which requires third country administrators or benchmarks to become approved via recognition or endorsement applications to the FCA to allow use of their benchmarks in the UK by supervised entities (unless and until an equivalence determination is made).
The draft statutory instrument will deal with certain other issues including:
- creating a UK register of benchmarks;
- migrating UK approved benchmarks and benchmark administrators onto the UK register on exit day; and
- temporarily migrating EU27 approved benchmarks onto the UK register on exit day.
The FCA will be updating its Handbook and relevant Binding Technical Standards to reflect the changes introduced by the draft statutory instrument.