On 25 January 2019, the Financial Markets Law Committee (FMLC) published its latest paper in its onshoring statutory instruments comment series. The paper covers the draft Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (draft FSMA SI) which amends those provisions of the Financial Services and Markets Act 2000 (FSMA) reliant on EU legislation.
In particular the paper notes that regulation 39 of the draft FSMA SI updates the financial promotion rules provided in section 137R of the FSMA. Section 137R(4) states that the FCA may make rules applying to authorised persons in relation to communications by or approved by them if the FCA considers that such rules are required to ensure compliance with certain ”listed requirements”. Regulation 39(4) of the draft FSMA SI inserts a new clause (5A) in section 137R explaining that these “listed requirements”, mean requirements under the law of the UK which “appear to the FCA to correspond to the requirements of” various EU legislation, including specific articles in MiFID II, the UCITS Directive and the Insurance Distribution Directive. The paper states that this seems to be a definition with a significant penumbra of uncertainty, especially given the size of the acquis of modified retained EU law with which the markets will be contending. The paper suggests that a more specific list, such as that included in the original clause – albeit altered to refer to UK legislation – would be “immensely useful”.
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