On 1 December 2020, there was published on legislation.gov.uk The Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020 together with an explanatory memorandum.
The statutory instrument:
- Sets out provisions allowing trade repositories (TRs) to submit applications for registration by the FCA in advance of the end of the transition period. This is to ensure that there is continuity of securities financing transaction (SFT) reporting services after the end of the transition period, and to ensure that counterparties of SFTs will be able to meet their reporting obligations.
- Ensures that a temporary registration regime is in place, enabling TRs to apply for registration with the FCA before the end of the transition period, provided they are a UK legal entity and part of the same group as a trade repository with an existing registration with the European Securities and Markets Authority (ESMA) under the EU SFT Regulation.
- Ensures that there is a conversion regime in place, which will allow TRs established in the UK before the end of the transition period to convert their existing ESMA SFTR registration into a registration with the FCA. These powers are similar to those set out in the Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018, which provided for registration arrangements, and a temporary registration regime and conversion regime for TRs under the European Market Infrastructure Regulation.
After the end of the transition period, firms will be required to make information on securitisations, which are not private, available through a securitisation repository authorised by the FCA. The statutory instrument contains provisions allowing the FCA to receive and consider applications from securitisation repositories before the end of the transition period, facilitating a smooth transition for securitisation repositories as they continue to provide services in the UK after the end of the transition period.
The statutory instrument also addresses deficiencies across a number of pieces of retained EU law arising as a result of the UK’s withdrawal from the EU, in line with the approach taken in other financial services EU exit instruments under the European Union (Withdrawal) Act 2018. The specific provisions of primary and secondary legislation amended are:
- Paragraph 15C (4) of Schedule 6 to the Insolvency Act 1986.
- Sections 313 and 417 of the Financial Services and Markets Act 2000.
- Sections 3, 4(4)(a) and 11A (8) of the Banking Act 2009.
- Article 35A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
- Regulation 1(4) of the Regulated Covered Bonds Regulations 2008.
- Article 1(6) of the Banking Act 2009 (Restriction of Partial Property Transfers) Order 2009.
- Regulation 2(3) of the Capital Requirements Regulations 2013.
- Regulation 1(3) of the Capital Requirements (Country-by-Country Reporting) Regulations 2013.
- Regulation 2(2A) of the Capital Requirements (Capital Buffers and Macroprudential Measures) Regulations 2014.
- Article 2(2) of the Banking Act 2009 (Banking Group Companies) Order 2014.
- Article 5(1) of the Banking Act 2009 (Restriction of Special Bail-in Provision, etc.) Order 2014.
- Article 2(4) of the Bank Recovery and Resolution (No. 2) Order 2014.
- Regulation 2 of the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016.
- The following paragraphs of the Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018— Schedule 1, paragraph 54; Schedule 2, paragraph 3(b)(ii); Schedule 3, paragraph 1(29); Schedule 4, in each of paragraphs 2(2)(c), 4(4)(2)(b) and 7(3);
- Regulation 2 of the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018.
- Regulation 3(2)(b) of the Credit Institutions and Insurance Undertakings Reorganisation and Winding Up (Amendment) (EU Exit) Regulations 2019.