On 5 February 2019, HM Treasury published a draft of the Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations together with an explanatory memorandum.

The draft statutory instrument (SI) makes a number of minor amendments to various UK statutory instruments to ensure that the legislation it amends continues to operate effectively following the UK’s withdrawal from the EU.

The draft SI is separated into six key areas:

  • amendment of primary legislation (including The Financial Services and Markets Act 2000 and the Income Tax Act 2007);
  • amendment and revocation of secondary legislation (including The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019);
  • amendments of retained EU law;
  • revocations of retained EU law; and
  • transitional and saving provisions.

A full list of the SIs amended by the draft SI can be found on pages 1 and 2 of the draft SI, and 2.4 – 2.9 of the draft explanatory memorandum.

Part 2 of the draft SI makes minor amendments and technical amendments to primary legislation, this includes such changes as omitting references to the EEA and associated EEA obligations. Similar amendments are made to secondary legislation in Part 3 of the draft SI to reflect the UK’s position outside of the EU in the event of a no-deal Brexit following exit day. Part 3 also makes amendments to financial services EU exit statutory instruments in which errors were identified after they were made, and further makes amendments to ensure there is consistency between EU exit instruments.

Chapter 1 of Part 4 of the draft SI makes amendments to several pieces of retained EU law to ensure consistency with other financial services EU exit instruments; chapter 2 of Part 4 revokes several pieces of retained EU law that will become redundant once the UK leaves the EU.

Part 5 of the draft SI implements a number of transitional and saving provisions to address deficiencies that arise from the UK’s withdrawal from the EU. This includes:

  • Regulation 37 makes transitional provisions to ensure continuity of supervisory and enforcement powers when “qualifying EU provisions” become “qualifying provisions” after exit;
  • Regulation 38 makes transitional provisions waiving the requirement in FSMA that, when recognising an EEA overseas investment exchange, there must be co-operation arrangements in place with the exchange’s home regulator, for a period of two years. This is required to give time for new co-operation agreements to be entered into after exit;
  • Regulation 39 makes transitional provisions in relation to CSDs which are, before exit day, EEA or third country CSDs (as defined before exit day in section 285 of FSMA) while they transition to the new arrangements for third country CSDs post-exit; and
  • Regulation 40 makes a transitional provision with reference to the Consumer Credit (Amendment) (EU Exit) Regulations 2018. These provisions relate to the amendments of the Consumer Credit (Disclosure of Information) Regulations 2010 made by regulation 3 of the Consumer Credit (Amendment) (EU Exit) Regulations 2018.

You can track the financial services Brexit EU Exit statutory instruments (as well as gain access to our Brexit resources) on our Brexit Pathfinder hub. Registration is free via the NRF Institute portal. Conformed copies of the EU Exit statutory instruments are available exclusively through our PathfinderPLUS service. To gain access to PathfinderPLUS, please contact Jochen Vester or Simon Lovegrove.