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Financial services

UK Developments

Latest thinking

Brexit statutory Instruments - a series of briefings

Dramatic December Election - Consequences for Financial Services Regulation

As the country processes the result of Thursday’s general election and the political drama that entailed, we reflect on what it means for financial institutions’ Brexit plans.


Online toolkit to enable EEA firms to meet their UK compliance obligations post

BrexitOur online toolkit enables EEA banks and investment firms providing wholesale services in or into the UK to identify and scope how the FCA and (where relevant) PRA rules will change for them on entry into, and on exit from, the temporary permission regime. Please click here for further details including pricing options and key contacts.


UK contractual continuity regime post 

Brexit EEA firms currently passporting into the UK are contingency planning for a “hard Brexit” on which their authorisation to continue to conduct regulated activities in the UK ends abruptly. Following publication of details around the temporary permissions regime (TPR) HM Treasury has now published the legislative framework to allow those EEA firms that do not enter the TPR or which exit the TPR without authorisation to continue to service existing contracts for a limited period to enable an orderly wind down of their UK business. This will be permitted either via Supervised Run-off with temporary limited permissions or Contractual Run-off with temporary exemptions depending upon the circumstances of the firm in question.

This bulletin helps firms to understand the availability, scope and regulatory implications of the run-off regimes. This understanding is crucial both for EEA firms that will not be authorised or deemed authorised to conduct regulated activities in the UK post Brexit and also for UK clients and counterparties of such EEA firms.


The EEA Passport Rights (Amendment, etc, and Transitional Provisions) (EU Exit) Regulations 2018 (TPR SI)

The TPR SI will provide temporary relief to allow EEA firms to be authorised with permission to continue operating in the UK after exit day for a transitional period.


Financial Regulators’ Powers (Technical Standards) (Amendment etc) (EU Exit) Regulations 2018

The purpose of this SI is to allocate responsibility for ‘onshored’ EU financial services to UK authorities.


Capital Requirements (Amendment) (EU Exit) Regulations 2018 (CRRSI)

The CRR SI is intended to ‘onshore’ the EU Capital Requirements Regulation and its delegated Regulations, which amend associated provisions in UK implementing legislation in the case of a hard Brexit.


Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (MiFID SI)

The MiFID SI seeks to provide a backstop that ensures the continued functioning of MiFID II in the UK, were the UK and EU to fail to come to agreement on a withdrawal deal by 29 March 2019.


Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2018 (BRRD SI)

The BRRD SI seeks to ensure that the UK’s Special Resolution Regime works legally and practically once the UK has left the EU. The BRRD’s policy drivers will remain central to the framework, ensuring continuity and certainty on Brexit. The BRRD SI assumes that there will be no cooperation with EU authorities. 


Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018 (AIFMD SI)

The AIFMD SI makes amendments to retained EU law related to AIFMs to ensure that it continues to operate effectively in the UK once the UK has left the EU. This SI is closely intertwined with the UCITS SI (see below).


The Collective Investment Schemes (Amendment etc) (EU Exit) Regulations 2018 (UCITS SI)

The UCITS SI makes amendments to retained EU law related to UCITS to ensure that it continues to operate effectively in the UK once the UK has left the EU.


The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, Etc., and Transitional Provision) (EU Exit) Regulations 2018 (EMIR SI)

The EMIR SI seeks to provide a backstop that ensures the continued functioning of EMIR and related UK legislation in the UK, were the UK and EU to fail to come to agreement on a withdrawal deal by 29 March 2019


 

 

The UK Regulator's Approach - our commentary

Brexit – Changes to the deadlines to notify the UK Regulators to benefit from the UK’s Temporary Permissions Regime - April 2019

Resolution in the UK post-Brexit - onshoring the Bank Recovery and Resolution Directive - December 2018

The UK regulation of EEA banks post- Brexit – some clarity on how the PRA ruleset will apply to firms that avail themselves of the temporary permissions regimes - November 2018

The UK regulation of EEA firms and funds post-Brexit - clarity on how the FCA rule-set will apply to firms that avail themselves of the temporary permissions regimes- October 2018

Brexit and the financial services - welcome clarity from the UK regulators - April 2018

The changes continue: UK financial services authorisation and supervision post-Brexit - January 2018

 

 

Other insights

Financial services regulation – what impact will Brexit have on regulated firms established in the UK, Europe & third country jurisdictions? - July 2016

Brexit impact on asset and fund managers - July 2016

Asset managers who are managing a UCITS or AIF - June 2016

 

Related links

Financial Services statutory instruments under the EU (Withdrawal) Act 2018

This table provides an up-to-date summary of those statutory instruments that have been published in draft, laid and/or approved. Please note that the table is updated every Monday

Temporary Permissions Regime - regulator publications:


FCA

CP18/29: Temporary permissions regime for inboundfirms and funds (October 2018)

Financial Conduct Authority outlines how it would use the temporary transitional power

CP19/2: Brexit and contractual continuity

Brexit - what we expect firms and other regulated persons to do now


BoE

Consultation Paper 32/18 - complete (pdf)


PRA

CP25/18: The Bank of England’s approach to amending financial services legislation under the European Union (Withdrawal) Act 2018 (October 2018)

CP26/18:UK withdrawal from the EU: Changes to PRA Rulebook and onshored Binding Technical Standards (October 2018)

 

Binding technical standards and rule-set changes:


FCA

PS 19/5: FCA Brexit Policy Statement and Transitional Directions  (March 2019)

CP18/36: Brexit: proposed changes to the Handbook and Binding Technical Standards – second consultation (November 2018)

CP18/28: Brexit: proposed changes to the Handbook and Binding Technical Standards – first consultation (October 2018)

CP18/44: Brexit – Regulatory Technical Standards for Strong Customer Authentication and Common and Secure Open Standards of Communication


BoE/PRA

Bank of England Policy Statement PRA Policy Statement 5/19  (March 2019)

CP25/18: The Bank of England’s approach to amending financial services legislation under the European Union (Withdrawal) Act 2018 (October 2018)


BoE

UK withdrawal from the EU: The Bank of England’s approach to resolution statements of policy and onshored Binding Technical Standards (October 2018)

UK withdrawal from the EU: Changes to FMI rules and onshored Binding Technical Standards (October 2018) 


PRA

PS3/18: International banks: the Prudential Regulation Authority’s approach to branch authorisation and supervision (March 2018)

SS1/18: International banks: the Prudential Regulation Authority’s approach to branch authorisation and supervision (March 2018)


PSR

CP18/3: Onshoring EU Regulatory Technical Standards under the Interchange Fee Regulation

 

EU27 Developments

 


Latest thinking

Post-Brexit options in the Luxembourg financial sector

In this publication from August 2019, our Luxembourg team provide a summary of available options for UK firms currently passporting their activities to Luxembourg or intending to provide services to Luxembourg clients in a post-Brexit environment. The summary therefore focuses on options available to UK firms currently holding a CRD 4, PSD 2, EMI 2 and MiFID 2 licence.

Read the publication here.

New French Brexit-Related Ordinance 

On 7 February 2019, ordinance no. 2019-75 relating to the preparatory measures in connection with the United-Kingdom’s withdrawal from the European Union in respect of financial services (the Ordinance) was published.

The Ordinance provides for specific measures that will be applicable as from the withdrawal from the European Union without an agreement entered into pursuant to Article 50 of the Treaty of the European Union (i.e. Hard Brexit). 

This publication sets out the ordinance no. 2019-75 and provides a summary. 

French draft bill addresses key Brexit legal concerns

 

Related links

EU27 "No deal" Brexit Law Tracker

This table summarises the domestic measures that Governments in EU27 member states are publishing in order to prepare for the UK’s withdrawal from the EU. The table monitors these developments in each member state and provides a high-level summary of the relevant provisions, particularly as they pertain to the financial services sector. These measures will not apply to a UK business which does not currently benefit from a passporting right. Please note that the table is updated every Monday.