The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018

JurisdictionUK Non-devolved
CitationSI 2018/1403

2018 No. 1403

Exiting The European Union

Financial Services

The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018

Made 19th December 2018

Coming into force in accordance with regulation 1(2) and (3)

The Treasury are a government department designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to financial services.

The Treasury, in exercise of the powers conferred by section 2(2) of the European Communities Act 1972 and section 8(1) of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 20183, make the following Regulations.

A draft of these Regulations has been approved by a resolution of each House of Parliament in accordance with paragraph 1 of Schedule 7 to the European Union (Withdrawal) Act 2018.

1 General

PART 1

General

S-1 Citation and commencement

Citation and commencement

1.—(1) These Regulations may be cited as the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018.

(2) This regulation, regulations 2, 3, 15(5), for the purpose only of inserting regulation 47B into the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 20174, and regulation 20 come into force on the day after the day on which these Regulations are made.

(3) The other provisions in these Regulations come into force on exit day.

2 Amendment of secondary legislation: European Communities Act 1972

PART 2

Amendment of secondary legislation: European Communities Act 1972

S-2 The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017

The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017

2. After regulation 2 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017, insert—

S-2A

References to EU Regulations etc

2A. Any reference in these Regulations to any EU Regulation, EU decision or EU tertiary legislation (within the meaning of section 20 of the European Union (Withdrawal) Act 2018) is, unless the contrary intention appears, to be treated as a reference to that EU regulation, EU decision or EU tertiary legislation as it has effect on the day on which the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 are made.”.

S-3 The Data Reporting Services Regulations 2017

The Data Reporting Services Regulations 2017

3. After regulation 2 of the Data Reporting Services Regulations 20175, insert—

S-2A

References to EU Regulations etc

2A. Any reference in these Regulations to any EU Regulation, EU decision or EU tertiary legislation (within the meaning of section 20 of the European Union (Withdrawal) Act 2018) is, unless the contrary intention appears, to be treated as a reference to that EU regulation, EU decision or EU tertiary legislation as it has effect on the day on which the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 are made.”

3 Amendment of secondary legislation: European Union (Withdrawal) Act 2018

PART 3

Amendment of secondary legislation: European Union (Withdrawal) Act 2018

CHAPTER 1

The Regulated Activities Order

S-4 Amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

Amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

4.—(1) The Financial Services and Markets Act 2000 (Regulated Activities) Order 20016is amended as follows.

(2) For the heading to Schedule 2, substitute “Financial Instruments and Investment services and activities”.

(3) In Part 1 of Schedule 2—

(a)

(a) omit the heading “Section C of Annex 1 to the Markets in Financial Instruments Directive”;

(b)

(b) in paragraph 67

(i) for “regulated market, an MTF or an OTF” substitute “UK regulated market, a UK MTF or a UK OTF (as defined by Article 2(1)(13A), (14A) and (15A) respectively of the markets in financial instruments regulation)”;

(ii) for “traded on an OTF” substitute “traded on a UK OTF”;

(c)

(c) in paragraph 78, after “commercial purposes” insert “or wholesale energy products traded on an EU OTF (as defined by Article 2(1)(15B) of the markets in financial instruments regulation)”;

(d)

(d) in paragraph 10, for “regulated market, OTF, or an MTF” substitute “a UK regulated market, a UK OTF, or a UK MTF (as defined by Article 2(1)(13A), (15A) and (14A) respectively of the markets in financial instruments regulation)”.

(4) In Part 2 of Schedule 29

(a)

(a) in Article 5—

(i) in the opening words of paragraph 1, for “Section C(6) of Annex 1 to Directive 2014/65/EU” substitute “paragraph 6 of Part 1 of Schedule 2 to this Order”;

(ii) in paragraphs 3, 4, 5, 6 and 7, for “Section C(6) of Annex 1 to Directive 2014/65/EU” substitute “paragraph 6 of Part 1 of Schedule 2 to this Order”;

(b)

(b) in Article 6, in paragraphs, 1, 2 and 3 for “Section C(6) of Annex 1 to Directive 2014/65/EU” substitute “paragraph 6 of Part 1 of Schedule 2 to this Order”;

(c)

(c) in Article 7—

(i) in paragraph 1—

(aa) in the opening words, for “Section C(7) of Annex 1 to Directive 2014/65/EU” substitute “paragraph 7 of Part 1 of Schedule 2 to this Order”;

(bb) for sub-paragraph (a)(i), substitute—

“(i)

“(i) it is traded on a third country trading venue which is a regulated market, an MTF or an OTF (as defined by Article 2(1)(13), (14) and (15) respectively of the markets in financial instruments regulation);”;

(cc) in sub-paragraph (a)(ii), for “a regulated market, an MTF, an OTF”, substitute “a UK regulated market, a UK MTF, a UK OTF (as defined by Article 2(1)(13A), (14A) and (15A) respectively of the markets in financial instruments regulation);”;

(dd) in sub-paragraph (a)(iii), for “a regulated market, MTF, an OTF”, substitute “a UK regulated market, a UK MTF, a UK OTF”;

(ii) in paragraph 3—

(aa) in the opening words, for “Section C(10) of Annex 1 to Directive 2004/39/EC” substitute “paragraph 10 of Part 1 of Schedule 2 to this Order”;

(bb) in sub-paragraph (b), omit the words from “, or a third country” to the end of the sub-paragraph;

(iii) in paragraph 4, in the opening words—

(aa) for “Section C(7) of Annex I to Directive 2014/65/EU” substitute “paragraph 7 of Part 1 of Schedule 2 to this Order”;

(bb) for “Sections C(7) and (10) of that Annex” substitute “paragraphs 7 and 10 of Part 1 of Schedule 2 to this Order”;

(iv) in paragraph 4, in point (b), for “Article 2(4) of Directive 2009/72/EC” substitute “Article 5(8)”;

(d)

(d) in Article 8—

(i) in the heading, for “Section C(10) of Annex 1 to Directive 2014/65/EU” substitute “paragraph 10 of Part 1 of Schedule 2”;

(ii) in the opening words—

(aa) for “Section C(10) of Annex I to Directive 2014/65/EU” substitute “paragraph 10 of Part 1 of Schedule 2 to this Order”;

(bb) for “that Section”, both times it appears, substitute “that Part”;

(iii) in point (d), for “Section C(4) of Annex I to Directive 2014/65/EU” substitute “paragraph 4 of Part 1 of Schedule 2 to this Order”;

(iv) in point (e), for “units recognised for compliance with the requirements of Directive 2003/87/ECof the European Parliament and of the Council” substitute “emission allowances referred to in paragraph 11 of Part 1 of Schedule 2 to this Order”;

(e)

(e) in Article 10, in paragraph 1, for “Section C(4) of Annex 1 to Directive 2014/65/EU” substitute “paragraph 4 of Part 1 of Schedule 2 to this Order”;

(f)

(f) in Article 11—

(i) renumber the existing paragraph as paragraph 1;

(ii) in paragraph 1, as renumbered, omit “in accordance with Article 4(1)(17) of Directive 2014/65/EU,”;

(iii) after paragraph 1, insert—

S-2

“2 For the purposes of this Article, “money market instruments” means those classes of instruments which are normally dealt with on the money market, such as treasury bills, certificates of deposit and commercial papers and excluding instruments of payment.”

(5) After Part 3 of Schedule 2, insert—

PART 3A

ANCILLARY SERVICES

S-1

1. Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash or collateral management and excluding providing and maintaining securities accounts at the top-tier level (“central maintenance service”) referred to in point (2) of Section A of the Annex to the Regulation (EU) No 909/2014 of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories.

S-2

2. Granting credits or loans to an investor to allow the investor to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction.

S-3

3. Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings.

S-4

4. Foreign exchange services where these are connected to the provision of investment services.

S-5

5. Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments.

S-6

6. Services relating to underwriting.

S-7

7. Investment services and activities included in Part 3 of this Schedule as well as ancillary services of the type included in this Part related to the underlying of the derivatives included in paragraphs 5, 6, 7 or 10 of Part 1 of this Schedule where these are connected to the provision of investment or ancillary services.”.

(6) In Part 4 of Schedule 2, in the opening paragraph, for the words from the beginning to “ Directive 2014/65/EU”, substitute “For the purposes of the list of investment services and activities in Part 3 of this Schedule, “investment advice” means the provision of personal recommendations to a client, either upon its request or at the initiative of the investment firm, in respect of one or more transactions relating to financial instruments. For these purposes”.

(7) After Article 9, insert—

PART 5

Interpretat...

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