The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019
| Year | 2019 |
2019 No. 341
Exiting The European Union
Financial Services
The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019
Made 21th February 2019
Coming into force in accordance with regulation 1(2) and (3)
The Treasury, in exercise of the powers conferred by section 8(1) of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 20181, and section 2(2) of the European Communities Act 19722, make the following Regulations.
The Treasury are designated3for the purpose of section 2(2) of the European Communities Act 1972 in relation to financial services.
A draft of these Regulations has been laid before, and approved by a resolution of, each House of Parliament in accordance with paragraph 1(1) of Schedule 7 to the European Union (Withdrawal) Act 2018 and paragraph 2(2) of Schedule 2 to the European Communities Act 1972.
PART 1
Introduction
Citation, commencement and interpretation
1.—(1) These Regulations may be cited as the Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019.
(2) This regulation and Part 4 come into force on the day after the day on which these Regulations are made.
(3) The other provisions of these Regulations come into force on exit day.
(4) In these Regulations—
“the 2000 Act” means the Financial Services and Markets Act 20004;
“the 1999 Regulations” means the Financial Markets and Insolvency (Settlement Finality) Regulations 19995.
PART 2
Amendment of primary legislation
Part 7 of the Companies Act 1989
2.—(1) The Companies Act 19896is amended as follows.
(2) In section 170A7(EEA central counterparties and third country central counterparties)—
(a)
(a) in the heading, for “EEA central counterparties and third” substitute “Third”;
(b)
(b) in subsection (1)—
(i) omit paragraphs (b) and (c);
(ii) in paragraph (e), for “an EEA central counterparty or” substitute “a”;
(c)
(c) in subsection (2), omit “an EEA central counterparty or”;
(d)
(d) in subsection (3)—
(i) in subsection (1) of the substituted section 157 (change in default rules), for “An EEA central counterparty or a” substitute “A”;
(ii) in subsection (3) of the substituted section 157, for “an EEA central counterparty or” substitute “, a”;
(e)
(e) in subsection (4), omit “an EEA central counterparty or”;
(f)
(f) in subsection (5), for “an EEA central counterparty or” substitute “a”.
(3) In section 170B8(EEA central counterparties and third country central counterparties: procedure)—
(a)
(a) in the heading, for “EEA central counterparties and third” substitute “Third”;
(b)
(b) in subsection (1), for “An EEA central counterparty or” substitute “A”;
(c)
(c) in subsections (5), (9), and (10) omit “EEA central counterparty or” in each place it occurs;
(d)
(d) in subsection (11), omit “, the EBA or ESMA”.
(4) In section 170C9(EEA CSDs and third country CSDs)—
(a)
(a) in the heading, for “EEA CSDs and third” substitute “Third”;
(b)
(b) omit “an EEA CSD or ” in each place it occurs.
(5) In section 176(2)(aa)10(power to make provision about certain other charges), omit “an EEA CSD or”.
(6) In section 183(3)11(insolvency proceedings in other jurisdictions), omit the words “or Regulation” to the end.
(7) In section 190(1)12(minor definitions), in the definition which begins “EEA CSD”—
(a)
(a) omit ““EEA CSD”,”;
(b)
(b) before “and” insert “, “third country central counterparty””.
(8) In section 19113(index of defined expressions), in the table—
(a)
(a) omit the entry for “EEA CSD”;
(b)
(b) insert at the appropriate place—
“third country central counterparty |
Section 190(1)”. |
The Banking Act 2009
3.—(1) The Banking Act 200914is amended as follows.
(2) In section 48D(1)15(general interpretation of section 48B), for the definition of “designated settlement system” substitute—
““designated settlement system” means a system which is designated in accordance with the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 ( S.I. 1999/2979);”.
(3) In section 255 (regulations about financial collateral arrangements)—
(a)
(a) in subsection (3)—
(i) omit paragraph (a);
(ii) in paragraph (b), for “provision required in connection with the Directive, and” substitute “doing things done or purported to be done by the Financial Collateral Arrangements (No. 2) Regulations 2003 ( S.I. 2003/3226), but”;
(b)
(b) in subsection (4)(h), for “Directive” substitute “Financial Collateral Arrangements (No. 2) Regulations 2003”.
PART 3
Amendment of secondary legislation
4. The 1999 Regulations are amended in accordance with regulations 5 to 10.
Interpretation
5.—(1) Regulation 2 (interpretation) is amended as follows.
(2) In paragraph (1)—
(a)
(a) for the definition of “central bank” substitute—
““central bank” means–
(a) the Bank of England; or
(b) any central bank (or other monetary authority) of a country or territory outside the United Kingdom that is a central bank (or other monetary authority) of an EEA state (including the European Central Bank) or a member of the Bank for International Settlements (including the Bank for International Settlements), as may be notified by the Bank of England to the Treasury from time to time;”;
(b)
(b) for the definition of “credit institution” substitute—
““credit institution” means a body corporate or unincorporated association whose head office is in the United Kingdom and whose business is to take deposits or other repayable funds from the public and to grant credits for its own account;”;
(c)
(c) for the definition of “designated system” substitute—
““designated system” means—
(a) a system which is declared by a designation order for the time being in force to be a designated system for the purposes of these Regulations; or
(b) a system which has temporary designation in accordance with Part 4 of the Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019;”;
(d)
(d) omit the definition of “ESMA”;
(e)
(e) in the definition of “institution”—
(i) for sub-paragraph (aa) substitute—
“(aa)
“(aa) an electronic money institution within the meaning of regulation 2(1) of the Electronic Money Regulations 201116;”;
(ii) in sub-paragraph (ab) omit “, or a person whose head office, registered office or place of residence, as the case may be, is outside the United Kingdom and whose functions correspond to those of such an institution”;
(iii) for paragraph (b) substitute—
“(b)
“(b) an investment firm as defined in Article 2.1A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012;”;
(iv) for sub-paragraph (d), substitute—
“(d)
“(d) any undertaking whose head office, registered office or place of residence is outside the United Kingdom and whose functions correspond to those of a credit institution, an electronic money institution, an authorised payment institution, a small payment institution, or an investment firm as defined in sub-paragraphs (a), (aa), (ab), and (b) respectively above; or”;
(f)
(f) for the definition of “securities” substitute—
““securities” means (except for the purposes of the definition of “charge”) any instruments referred to in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 200117;”;
(g)
(g) in the appropriate place, insert new definitions as follows—
““insolvency proceedings” means any collective measure provided for in the law applicable within the United Kingdom or any part of the United Kingdom, or a third country, either to wind up the participant or to reorganise it, where such measure involves the suspending of, or imposing limitations on, transfers or payments;”;
““system” means a formal arrangement—
(a) between two or more participants, without counting a settlement agent, a central counterparty, a clearing house or an indirect participant, with common rules and standardised arrangements for the clearing, whether or not through a central counterparty, or execution of transfer orders between the participants; and
(b) governed by the law of a country or territory chosen by the participants; the participants may, however, only choose the law of a country or territory in which at least one of them has its head office;”;
““third country” means a country or territory other than the United Kingdom;”.
(3) In paragraph (2A)18—
(a)
(a) omit “under the recovery and resolution directive”;
(b)
(b) in sub-paragraph (a) for the words “a contract to which that undertaking is a party” substitute “the rules of the system in which the undertaking is a participant”.
(4) In paragraph (2B)19, omit sub-paragraph (b).
(5) Omit paragraph (3).
(6) In paragraph (5), insert a sub-paragraph (d) as follows—
“(d)
“(d) section 121 of, and Schedule 6 to, the Financial Services (Banking Reform) Act 201320.”.
(7) Insert a new paragraph (6) as follows—
“6 For the purposes of these Regulations—
(a) a reference to a system governed by the law of the United Kingdom is a reference to a system of which the governing law is the law of England and Wales, Northern Ireland, or Scotland;
(b) a reference to a system being designated in Gibraltar means designated under a Gibraltar law corresponding to these Regulations;
(c) a participant is regarded as established in the United Kingdom if its head office, registered office or place of residence is in the United Kingdom or if it has a branch in the United Kingdom (within the meaning of section 1046(3) of the Companies Act 2006)21.”.
(8) After new paragraph (6) insert—
“7 For the purposes of sub-paragraph (b) of the definition of “central bank”, the designating authority must publish on its website a list of...
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