On 19 July 2022, HM Treasury published, The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2022. The primary purpose of this statutory instrument is to make consequential changes as a result of the Financial Services Act 2021.
Key points include that the statutory instrument:
- Includes further consequential amendments following the introduction of the Investment Firm Prudential Regime (IFPR) and Basel 3 standards on 1 January 2022. In particular, the Banking Act 2009 (Exclusion of Investment Firms of a Specified Description) Order 2014 is repealed on the basis that it is redundant following the removal of FCA-regulated investment firms from the UK resolution regime.
- Makes transitional provision in respect of risk retention requirements for certain securitisations following the implementation of the IFPR. These requirements relate to the retention of a material net economic interest in a securitisation by the originator, sponsor, or original lender to better align their interests with those of investors.
- Makes amendments to ensure that short term liabilities owed to both PRA-regulated and FCA-regulated investment firms with permission to underwrite or deal on own account will continue to be exempt from bail-in.
- Addresses further deficiencies arising from the withdrawal of the United Kingdom from the European Union.
The statutory instrument comes into force on 17 August 2022.