On 19 July 2021, HM Treasury published a draft of The Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021.
HM Treasury has made this draft statutory instrument to fix deficiencies in the Markets in Financial Instruments Regulation (MiFIR) and the Benchmarks Regulation, which became part of retained EU law, and in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (FPO).
Articles 35 and 36 of MiFIR set out a non-discriminatory access regime for exchange-traded derivatives (ETDs). These provisions require trading venues and central counterparties to grant each other non-discriminatory and transparent access. It was originally designed to improve cross-border capital markets by increasing competition and facilitating access across the EU’s single market. However, it has never been used by market participants in the UK. HM Treasury has conducted a review of the regime and concluded that it is not suitable in a UK-only context.
The low carbon benchmarks regime sets out requirements and voluntary standards for firms that administer benchmarks under the Benchmarks Regulation. On 23 December 2020, three European Commission Delegated Acts set out certain standards that are necessary for the operation and implementation of the low benchmarks regime. The amendments introduced by the draft statutory instrument are designed to provide for the effective operation of the legislation introduced by the EU delegated acts in a UK-only context.
The amendments made by the draft statutory instrument to the FPO are intended to ensure that exemptions contained in the FPO can apply to UK markets, as well as EEA and Gibraltar markets.
The draft statutory instrument states that it would come into force on 13 October 2021.