On 22 October 2018, HM Treasury published explanatory information on the draft Ring-fenced Bodies (Amendment) (EU Exit) Regulations 2018 (the draft Regulations)
The draft Regulations will form part of a series of draft statutory instruments that HM Treasury is publishing as part of its contingency planning for a no-deal Brexit. The statutory instruments are made by HM Treasury in exercise of its powers conferred by the European Union (Withdrawal) Act 2018.
The explanatory note explains that the draft Regulations are still in development and will be published in due course. The note also states that whilst the UK ring-fencing regime is a UK initiative some of the definitions of permitted and prohibited activities in relation to ring-fencing will need to be changed as they were originally drafted to reflect the UK’s place as part of the EU single market for financial services. The draft Regulations will also ensure that ring-fenced bodies will be able to continue operating through a branch or subsidiary in the EEA in a no-deal scenario.