The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019
| Year | 2019 |
2019 No. 632
Exiting The European Union
Financial Services
The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019
Made 22th March 2019
Coming into force in accordance with regulation 1
The Treasury are a government department1designated for the purpose of section 2(2) of the European Communities Act 19722in relation to financial services.
The Treasury make the following Regulations in exercise of the powers conferred by section 2(2) of the European Communities Act 1972, and section 8(1) of, paragraph 1 of Schedule 4 to, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 20183.
In accordance with paragraphs 1 and 12 of Schedule 7 to the European Union (Withdrawal) Act 2018, a draft of this instrument has been laid before, and approved by a resolution of, each House of Parliament.
PART 1
Introductory
Citation, commencement and interpretation
1.—(1) These Regulations may be cited as the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019.
(2) This regulation, Part 7, Part 8 and the following regulations come into force on the day after the day on which these Regulations are made—
(a)
(a) regulation 49(e);
(b)
(b) regulation 85(3), (6), (8), (11) and (14);
(c)
(c) regulation 87(b);
(d)
(d) regulation 88(e);
(e)
(e) regulation 130;
(f)
(f) regulation 171;
(g)
(g) regulation 179(3);
(h)
(h) regulation 187(3), in so far as it inserts paragraph (3) in article 1 of the Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 20134; and
(i)
(i) regulation 190(3), in so far as it inserts paragraph (3) in article 1 of the Financial Services and Markets Act 2000 (Qualifying EU Provisions) (No. 2) Order 20135.
(3) The other provisions of these Regulations come into force on exit day.
(4) In these Regulations, “the Act” means the Financial Services and Markets Act 20006.
PART 2
Amendments to the Act
CHAPTER 1
Part 1A of the Act: the regulators
Introduction
2. Part 1A of the Act7(the regulators) is amended as follows.
Section 1A (the Financial Conduct Authority)
3. In section 1A (the Financial Conduct Authority), in subsection (6)(d) for “qualifying EU provision” substitute “qualifying provision”.
Section 1H (further interpretative provisions for sections 1B to 1G)
4.—(1) Section 1H8(further interpretative provisions) is amended as follows.
(2) In subsection (2)(d), for “credit institutions” substitute “qualifying credit institutions”.
(3) In subsection (8)—
(a)
(a) omit the definition of “credit institution”9;
(b)
(b) in the definition of “relevant ancillary service”, for “Section B of Annex I to the markets in financial instruments directive” substitute “Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001”10.
Section 1L (supervision, monitoring and enforcement)
5. In section 1L11(supervision, monitoring and enforcement), in subsection (2)(b) for “qualifying EU provision” substitute “qualifying provision”.
Section 2AB (functions of the PRA)
6. In section 2AB12(functions of the PRA), in subsection (3)(d)13for “qualifying EU provision” substitute “qualifying provision”.
Section 3E (memorandum of understanding)
7. In section 3E14(memorandum of understanding between regulators) omit subsection (3)(a).
Section 3I (power of PRA to require FCA to refrain from specified action)
8. In section 3I15(power of PRA to require FCA to refrain from specified action), in subsection (8) omit “EU obligation or any other”.
Section 3J (power of PRA in relation to with-profits policies)
9. In section 3J16(power of PRA in relation to with-profits policies), in subsection (8) omit “EU obligation or any other”.
Section 3M (directions relating to consolidated supervision of groups)
10.—(1) Section 3M17(directions relating to consolidated supervision of groups) is amended as follows.
(2) In subsection (1) (which refers to supervision required in pursuance of any of the relevant directives), for “any of the relevant directives” substitute—
“(a)
“(a) any implementing provision contained in subordinate legislation (within the meaning of the Interpretation Act 1978) made otherwise than by any of the following—
(i) statutory instrument, and
(ii) statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 ( S.I. 1979/1573 (N.I. 12)); or
(b)
(b) any other implementing provision (as amended from time to time),”.
(3) After subsection (2) insert—
“2A “Implementing provision” means an enactment that immediately before exit day implemented provisions of any of the relevant directives.”.
(4) In subsection (10) omit “EU obligation or any other”.
CHAPTER 2
Part 3 of the Act: authorisation and exemption
Introduction
11. Part 3 of the Act (authorisation and exemption) is amended as follows.
Section 39 (exemption of appointed representatives)
12.—(1) Section 39 (exemption of appointed representatives) is amended as follows.
(2) In subsection (1A)19, in paragraph (a)—
(a)
(a) for “credit institution” substitute “qualifying credit institution”;
(b)
(b) for “a person mentioned in Article 3.1 (optional exemptions) of the markets in financial instruments directive” substitute “a firm which has a Part 4A permission to carry on regulated activities as an exempt investment firm within the meaning of regulation 8 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 ( S.I. 2017/701)”.
(3) In subsection (1AA)20—
(a)
(a) in paragraph (a), for “credit institution” substitute “qualifying credit institution”;
(b)
(b) in paragraph (b) omit “as defined by Article 4.1.43 (definitions) of the markets in financial instruments directive”.
(4) In subsection (1B)21, for the words after ““the applicable register” is” substitute “the record maintained by the FCA by virtue of section 347(1)(ha)”.
(5) In subsection (1BA)22, in paragraph (b)—
(a)
(a) after “of a kind” insert “that”;
(b)
(b) in sub-paragraph (i), before “specified” insert “is”;
(c)
(c) for sub-paragraph (ii) substitute—
“(ii)
“(ii) relates to mortgage agreements entered into on or after 21st March 2016,”.
(6) In subsection (4)23, for “qualifying EU provision” substitute “qualifying provision”.
(7) For subsection (7)24substitute—
“7 A person carries on “investment services business” if, under the full and unconditional responsibility of only one investment firm on whose behalf the person acts, the person—
(a) promotes investment services or ancillary services to the firm’s clients or prospective clients,
(b) receives and transmits instructions or orders from clients in respect of investment services or financial instruments,
(c) places financial instruments, or
(d) provides advice to clients or prospective clients in respect of investment services or financial instruments.”.
(8) For subsection (8)25substitute—
“8 In this section—
“ancillary services” means any of the services and activities listed in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ( S.I. 2001/544);
“financial instruments” means those instruments specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
“investment services” means any of the services and activities listed in Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, relating to any of the instruments listed in Part 1 of that Schedule;
“structured deposit” has the meaning given by Article 2.1.23 of the markets in financial instruments regulation.”.
Section 39A (certain tied agents operating outside United Kingdom)
13.—(1) Section 39A27(certain tied agents operating outside United Kingdom) is amended as follows.
(2) In subsection (1)(a), for the words after “who is” substitute “established in the United Kingdom; and”.
(3) In subsection (4), for the words after “Condition B is that” substitute “the FCA is satisfied that no such business is, or is likely to be, carried on by the agent in the United Kingdom.”.
(4) In subsection (6)(c)28omit sub-paragraph (ii).
(5) In subsection (6)(d)29omit “or register”.
(6) For subsection (8)30substitute—
“8 Section 39(7) applies for the purposes of this section.”.
(7) In subsection (9) omit the definition of “competent authority”31.
(8) The amendments made by paragraphs (2), (3) and (7) do not apply during the three-year transitional period in relation to contracts entered into before exit day.
(9) In relation to such contracts, section 39A(6)(d) has effect during the three-year transitional period as if “or on the register of tied agents of an EEA State maintained pursuant to Article 29 of Directive 2014/65/EUof the European Parliament and of the Council of 15 May 2014 on markets in financial instruments” were inserted after “entered on that record”.
(10) In paragraphs (8) and (9) “the three-year transitional period” means the period that—
(a)
(a) begins with exit day, and
(b)
(b) ends at the end of the period of three years starting with the first day after exit day.
CHAPTER 3
Part 4A of the Act: permission to carry on regulated activities
Introduction
14. Part 4A of the Act32(permission to carry on regulated activities) is amended as follows.
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