United Kingdom (and EU regulation)

The Bank of England’s amendments under the European Union (Withdrawal) Act 2018: Changes before the end of the transition period

By Simon Lovegrove (UK) on December 21, 2020 Posted in Brexit, United Kingdom

On 18 December 2020, the Bank of England (BoE) and PRA co-published a Policy Statement entitled The Bank of England’s amendments under the European Union (Withdrawal) Act 2018: Changes before the end of the transition period (PS27/20).

In PS27/20 the BoE / PRA provide feedback to the responses to Consultation Paper 13/20: UK withdrawal from the EU: Changes before the end of the transition period (CP13/20) and Consultation Paper 18/19: UK withdrawal from the EU: Changes following extension of Article 50. It also contains the BoE’s and PRA’s final and near-final policies (CP18/19).

The substantive sections of PS27/20 are as follows:

Section 2 of PS27/30 sets out updates and clarifications made to the BoE’s final and PRA’s near-final transitional directions. The transitional directions are essentially the same as the draft directions published as part of CP13/20, aside from the few minor changes. The BoE’s final and PRA’s near-final transitional directions are in Appendices A.1 and A.7.
Section 3 provides updated guidance on EU guidelines and recommendations. In particular, the BoE and the PRA have also added some additional examples where guidelines and recommendations may no longer be relevant after the end of the transition period.
Section 4 covers changes to the PRA Rulebook and binding technical standards (BTS), and nationalising the acquis (NtA) non-binding materials
Sections 5 and 6 cover, respectively, Final Bank (Resolution and Financial Market Infrastructure (FMI)) BTS and Final Resolution BTS.
Section 7 deals with Final FMI BTS and NtA non-binding materials. In particular, the final BoE supervisory statement has been updated to reflect the transition period. There has also been the addition of certain BoE materials in relation to the supervision of FMIs that were not included in the previous April 2019 version.

The BoE and PRA Technical Standards (EU Exit) Instruments, nationalising the acquis (NtA) non-binding materials, and the BoE transitional direction and related guidance documents are published as final as part of PS27/20. The PRA transitional direction, PRA Rulebook (EU Exit) Instrument, and related guidance documents are published as ‘near-final’. This means that the direction and Instrument have been approved by the PRA’s governance committees, but they have not been formally made. The PRA cannot make its final transitional direction and PRA Rulebook (EU Exit) Instrument until after the PRA’s rules implementing CRD V have been made.

The transitional directions and Technical Standards (EU Exit) Instruments will all commence on IP completion day (11pm on Thursday 31 December 2020). Most provisions of the updated PRA Rulebook (EU Exit) Instrument will also commence on IP completion day, although a small number of provisions will take effect at different times as explained in the commencement provision. All NtA non-binding materials will become applicable on IP completion day.

The final instruments will sit alongside the other final EU Exit Instruments published in Section B of the April 2019 version of Policy Statement 5/19. These instruments will also commence on IP completion day.