On 21 January 2019, there was published on legislation.gov.uk a draft of The Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019, together with an explanatory memorandum. The draft statutory instrument (SI) has now been laid before Parliament. Explanatory information for the draft SI was published on 22 November 2018 (our blog is here) and a first draft of the SI was published by HM Treasury in December 2018.

The draft SI addresses deficiencies in the UK’s financial services’ regime arising from the UK’s withdrawal from the EU and is made under the European Union (Withdrawal) Act 2018. Specifically, the draft SI addresses deficiencies in relation to the onshored EU Prospectus Directive, Transparency Directive and Consolidated Admissions and Reporting Directive.

The draft SI does not make policy changes other than to reflect the UK’s position outside the EU. The key changes include:

  • requiring all prospectuses for securities to be offered to the public in the UK or admitted to trading on a UK regulated market to be approved by the FCA, rather than allowing prospectuses approved by another EEA regulator to be passported in for use in the UK as is currently the case;
  • introducing grandfathering arrangements that will allow any prospectus approved by the regulator in an EEA State prior to exit to continue to be used in the UK, and supplemented where necessary, after exit up to the end of their validity (up to 12 months after the prospectus is first approved);
  • extending the existing exemption from the requirement to produce a prospectus and certain exemptions under the Transparency Directive that currently apply to certain EEA public bodies, to certain third country public bodies;
  • transferring responsibilities and functions that currently sit with EU bodies to the appropriate UK body. This includes transferring responsibility for equivalence determinations to HM Treasury, and responsibility to make and amend certain Binding Technical Standards and provide technical assessments of third countries’ regimes to the FCA; and
  • removing obligations for UK authorities to cooperate and share information with EU authorities.

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.