On 1 March 2022, HM Treasury published a draft of The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2022.

The draft statutory instrument makes consequential changes as a result of the Financial Services Act 2021 which introduced the framework for the Investment Firms Prudential Regime (IFPR) and provided for the transfer of certain prudential regulation set out in UK legislation to rules made by the Prudential Regulation Authority (PRA) so that the PRA could implement the remaining aspects of the Basel III standards through regulator rules.

In particular, the draft statutory instrument:

  • Repeals the Banking Act 2009 (Exclusion of Investment Firms of a Specified Description) Order 2014 as 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.
  • 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.