The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019

Made: 27th March 2019

Coming into force in accordance with regulation 1

A draft of these Regulations has been approved by a resolution of each House of Parliament in accordance with paragraph 1(3) of Schedule 7 to the European Union (Withdrawal) Act 2018 .

The Treasury, in exercise of the powers conferred by section 8(1) of, and paragraph 21 of Schedule 7 to, that Act, make the following Regulations.

PART 1 — Introduction

Citation and commencement

1

• (1) These Regulations may be cited as the Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019.

• (2) Regulation 38 comes into force on the day before the day on which exit day falls.

• (3) Regulations 1 and 13 to 24 come into force immediately before exit day.

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

PART 2 — Amendment of primary legislation

The Insolvency Act 1986

2

Omit sections 124B (petition for winding up of SE) and 124C (petition for winding up of SCE) of the Insolvency Act 1986 .

The Financial Services and Markets Act 2000

3

• (1) The Financial Services and Markets Act 2000 is amended as follows.

• (2) In section 425(1)(a) (expressions relating to authorisation elsewhere in the single market) omit “ “EEA AIFM”,” and “ “EEA authorisation”,”.

• (3) In Part 1 of Schedule 3 (defined terms) omit paragraphs 6 (EEA authorisation) and 11D (EEA AIFM).

Income Tax Act 2007

4

In section 886 of the Income Tax Act 2007 (interest paid by recognised clearing houses etc.), in subsection (3), in the definition of “relevant entity”, omit paragraphs (c) and (f).

Corporation Tax Act 2009

5

In section 697 of the Corporation Tax Act 2009 (exceptions to section 696)—

• (a) in subsection (1)(a), omit “, EEA central counterparty”;

• (b) in subsection (6), omit “, EEA central counterparty”.

PART 3 — Amendment and revocation of secondary legislation

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

6

In article 7 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001—

• (a) in paragraph (2)—

• (i) at the end of sub-paragraph (c), insert “or”,

• (ii) in sub-paragraph (d) for “registered European lawyer” substitute “a Swiss lawyer who is a registered European lawyer”, and

• (iii) omit sub-paragraph (e) and the “or” which precedes it;

• (b) in paragraph (3)—

• (i) at the end of sub-paragraph (c), omit “and”,

• (ii) at the end of sub-paragraph (d), insert “and”, and

• (iii) after sub-paragraph (d), insert—

(e) “Swiss lawyer” means a national of the United Kingdom or a Swiss national who— (i) immediately before IP completion day was authorised in Switzerland to pursue professional activities under the professional title of Avocat, Advokat, Rechtsanwalt, Anwalt, Fürsprecher, Fürsprech or Avvocato, or (ii) had started training towards but not yet obtained their professional qualifications before IP completion day in order to be authorised in Switzerland to pursue professional activities under one of the professional titles referred to in paragraph (i) but who completed their qualifications and were so authorised before the end of the period of four years beginning with IP completion day.

The Financial Services and Markets Act 2000 (Exemption) Order 2001

7

• (1) The Financial Services and Markets Act 2000 (Exemption) Order 2001 is amended as follows.

• (2) In article 2, omit the definition of “credit institution” and insert in the appropriate place—

“qualifying credit institution” has the meaning given by article 3 of the Regulated Activities Order ;

• (3) In the Schedule in paragraph 40(3) , for “credit institution” substitute “ qualifying credit institution ”.

The Building Societies Act 1986 (Modification of the Lending Limit and Funding Limit Calculations) Order 2004

8

In article 2(1) of the Building Societies Act 1986 (Modification of the Lending Limit and Funding Limit Calculations) Order 2004 , for the definition of “credit institution”, substitute—

“credit institution” means an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account;

The Financial Services and Markets Act 2000 (Prescribed Financial Institutions) Order 2013

9

In article 1(2) of the Financial Services and Markets Act 2000 (Prescribed Financial Institutions) Order 2013 omit the definition of “credit institution”.

The Payment to Treasury of Penalties (Enforcement Costs) Order 2013

10

• (1) In article 2 of the Payment to Treasury of Penalties (Enforcement Costs) Order 2013 , omit paragraph (1)(i).

• (2) The omission of paragraph (1)(i) of article 2 does not affect the ability of the Financial Conduct Authority to deduct expenses incurred before IP completion day in connection with the exercise, or the consideration of the possible exercise, of its powers under regulation 5A of the Recognised Auction Platforms Regulations 2011 in accordance with paragraph 20(1) of Schedule 1ZA to the Financial Services and Markets Act 2000 .

The Small and Medium Sized Business (Credit Information) Regulations 2015

11

In regulation 7(3) of the Small and Medium Sized Business (Credit Information) Regulations 2015 , in sub-paragraph (b)—

• (a) in paragraph (iv), after “elsewhere;” insert “ or ”;

• (b) omit paragraph (vi), and the “or” preceding it.

The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018

12

• (1) The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 are amended as follows.

• (2) In regulation 2—

• (a) in paragraph (1), for the definition of “third country” substitute—

“third country” means a country other than the United Kingdom.

• (b) in paragraph (2), at the end of the definition of “senior management” insert “ as it had effect immediately before IP completion day”.

• (3) For the heading to regulation 3, substitute “ Retained direct EU legislation ”.

• (4) In regulation 3, for “directly applicable EU regulation” substitute “ retained direct EU legislation ”.

• (5) Omit regulation 4.

• (6) In regulation 8, in paragraphs (2), (3) and (5), for “an EU obligation” substitute “ a retained EU obligation ”.

• (7) In regulation 34, for paragraph (2) substitute—

(2) The FCA must determine the application within 90 working days of receipt of the completed application.

• (8) In regulation 35(1), for “outside the EU” substitute “ in a third country ”.

• (9) In regulation 61 —

• (a) in paragraph (1), after “does not”, the second time it occurs, insert “ , subject to paragraph (3), ”;

• (b) after paragraph (2) insert—

(3) Paragraph (1) does not apply if the benchmark may not be used by virtue of Article 51(1C) of the EU Benchmarks Regulation 2016.

• (10) In regulation 62—

• (a) in paragraph (1), after “does not”, the second time it occurs, insert “ , subject to paragraph (3), ”;

• (b) after paragraph (2) insert—

(3) Paragraph (1) does not apply if the benchmark may not be used by virtue of Article 51(1C) of the EU Benchmarks Regulation 2016.

The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019

13

In the Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019—

• (a) in regulation 10(8)(b), omit paragraph (ii);

• (b) in regulation 20(3)(a)(v), for paragraph (aa), substitute—

(aa) for paragraph (b) of the new definition of “UK AIFM” substitute— (b) has its registered office in a third country but has been given permission by the FCA under Part 4A of the Act to carry on the regulated activity of managing an AIF.

• (c) in regulation 36(8)(c)(i), before subparagraph (aa) insert—

(zaa) for “EU AIFs” substitute “UK and EU AIFs;

The Bank of England (Amendment) (EU Exit) Regulations 2018

14

In regulation 8 of the Bank of England (Amendment) (EU Exit) Regulations 2018 , omit paragraph (4).

The Central Securities Depositories (Amendment) (EU Exit) Regulations 2018

15

In regulation 8(b)(ii) of the Central Securities Depositories (Amendment) (EU Exit) Regulations 2018 , for “authorities competent for” substitute “ authorities competent ”.

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

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• (1) The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 are amended as follows.

• (2) In regulation 4—

• (a) in paragraph (3)(c), after “regulation)” insert “ that must be physically settled ”;

• (b) in paragraph (4)—

• (i) in sub-paragraph (a)(i) and (ii), for “paragraph 6”, each time it occurs, substitute “ paragraphs 6 and 7 ”;

• (ii) for sub-paragraph (b), substitute—

(b) in Article 6— (i) in paragraphs 1 and 2, 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 paragraph 3, for “Section C(6) of Annex 1 to Directive 2014/65/EU” substitute “ paragraphs 6 and 7 of Schedule 2 to this Order ”;

• (iii) in sub-paragraph (c), omit paragraph (iv);

• (c) in paragraph (8), in new Schedule 3, in paragraph 6, for “paragraph 1(e)”, substitute “ paragraph 1(d) ”.

• (3) In regulation 6, for paragraph (b), substitute—

(b) in paragraph (3)(b)— (i) for “directly applicable EU regulation”, both times it occurs, substitute “ retained EU law ”; (ii) in paragraph (i), at the beginning insert “ any UK legislation which was relied on by the United Kingdom before IP completion day to implement ”;

• (4) In regulation 7(1)(s), in the new definition of “multilateral trading facility”—

• (a) after “UK multilateral trading facility” insert “ or “UK MTF” ”;

• (b) after “EU multilateral trading facility” insert “ or “EU MTF” ”.

• (5) In regulation 8(13)(a), omit “(“a more restrictive position limit”)”.

• (6) In regulation 15—

• (a) after paragraph (3), insert—

(3A) In the heading to regulation 47, omit “the markets in financial instruments directive or”.

• (b) in paragraph (5), in new regulation 47B(3)(b), for “standards” substitute “ obligations ”.

• (7) In regulation 18—

• (a) in paragraph (1)(n), in the new definition of “senior management”, after “a market operator” insert “ (as defined in Article 2(1)(10) of the markets in financial instruments regulation) ”;

• (b) after paragraph (2), insert—

(3) In regulation 4— (a) for the heading, substitute “ Retained EU law ”; (b) in paragraph (1), for “directly applicable EU regulation” substitute “ retained EU law ”; (c) in paragraph (2)(a), for “a directly applicable EU regulation” substitute “ any retained EU law ”.

• (8) In regulation 19—

• (a) for paragraph (6), substitute—

(6) In regulation 9(1)— (a) in sub-paragraph (b), for “European Union” substitute “ United Kingdom ”; (b) in sub-paragraph (c)(iii), for “directly applicable EU regulations” substitute “ retained EU law ”.

• (b) in paragraph (8), after sub-paragraph (b), insert—

(c) in paragraph (iv), for “a directly applicable EU regulation” substitute “any retained EU law.

• (9) For regulation 23, substitute—

(23) (1) In regulation 45(b), for “directly applicable EU regulations” substitute “ retained EU law ”. (2) Omit regulation 46. (3) In regulation 48, omit paragraph (2).

• (10) In regulation 25—

• (a) in paragraph (3), in the substituted paragraph 2D(a), for “ this Regulation as it applies in the EEA ” substitute “Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments as it has effect in EU law”;

• (b) in paragraph (4), omit sub-paragraph (c);

• (c) in paragraph (6)(a), for “Debt Management Office” substitute “ Treasury ”.

• (11) In regulation 27—

• (a) in paragraph (2)(d), in the new paragraph 3D(a)(ii) for “this Regulation as it has effect in the European Union” substitute “ Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments as it has effect in EU law ”;

• (b) in paragraph (5)(c), in the new paragraph 2B(a)(ii), for “Article 13” substitute “ Article 16 ”.

• (12) In regulation 28(10)(b)(i), before “authorised” insert “ is ”.

• (13) In regulation 29(3)—

• (a) in sub-paragraph (b), after “UK” insert “ , Gibraltar ”;

• (b) in sub-paragraph (g)(i), after sub-paragraph (bb), insert—

(cc) in point (f), for “Member States” substitute “ the United Kingdom; ”;

• (c) after sub-paragraph (h), insert—

(i) after paragraph 10, insert— (11) For the purposes of paragraph 2— (a) ‘Gibraltar trading venue’ means a Gibraltar regulated market, a Gibraltar multilateral trading facility or a Gibraltar organised trading facility; (b) for the purposes of subparagraph (a)— (i) ‘Gibraltar regulated market’ means a regulated market which is authorised and functions regularly and in accordance with Part 3 of the Financial Services (Markets in Financial Instruments) Act 2018 of Gibraltar (as amended from time to time) ; (ii) ‘Gibraltar multilateral trading facility’ means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments (in the system and in accordance with non-discretionary rules) in a way which results in a contract in accordance with Part 2 of the Financial Services (Markets in Financial Instruments) Act 2018 of Gibraltar (as amended from time to time); (iii) ‘Gibraltar organised trading facility’ means a multilateral system— (aa) which is not a regulated market or an MTF; (bb) in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract, in accordance with Part 2 of the Financial Services (Markets in Financial Instruments) Act 2018 of Gibraltar (as amended from time to time).

• (14) In regulation 30(7), in paragraph 2 of the substituted Article 34, for “ this Article as it applies in the European Union ” substitute “Article 34 of Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments as it has effect in EU law”.

• (15) In regulation 33—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in paragraph (2)(b)(ii), after “this Regulation”, insert “ , the first time it occurs ”.

• (16) In regulation 34, in new Article 50B(3)(b), for “standards” substitute “ obligations ”.

• (17) In regulation 37, in new Schedule 3, in paragraph 8(1)—

• (a) after “regulated market” insert “ or other trading venue ”;

• (b) for “requirements resulting” substitute “ requirements applicable to that trading venue which result ”;

• (c) for “2004/65/EU” substitute “ 2014/65/EU ”.

• (18) In regulation 39—

• (a) in paragraph (2)(d), in the substituted paragraph 5(a), for “ this Regulation as it applies in the EEA ” substitute “Commission Delegated Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that directive as it has effect in EU law”;

• (b) in paragraph (5)(b), for “paragraph 1(c)” substitute “ paragraph 1(d) ”;

• (c) in paragraph (6)(b) and (c), for “paragraph 6”, both times it occurs, substitute “ paragraphs 6 and 7 ”.

• (d) in paragraph (7)—

• (i) in sub-paragraph (b), for “paragraphs, 1, 2 and 3” substitute “ paragraphs 1 and 2 ”;

• (ii) after sub-paragraph (b), insert—

(c) in paragraph 3, for “Section C(6) of Annex 1 to Directive 2014/65/EU” substitute “ paragraphs 6 and 7 of Part 1 of Schedule 2 to the Regulated Activities Order ”.

• (19) In regulation 41(3)(b), for “ “direct electronic access” substitute “ ‘direct electronic access’”.

The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018

17

In Schedule 1 to the Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 , omit paragraph 21(3).

The Credit Institutions and Insurance Undertakings Reorganisation and Winding Up (Amendment) (EU Exit) Regulations 2019

18

In regulation 1 of the Credit Institutions and Insurance Undertakings Reorganisation and Winding Up (Amendment) (EU Exit) Regulations 2019 , at paragraph (2), for “on [ date ]” substitute “ immediately before IP completion day”.

The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019

19

• (1) Regulation 147 of the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 is amended as follows.

• (2) In paragraph (7), in the new paragraph (11A)—

• (a) in subparagraph (b), for “equivalence regulations”, substitute “ an equivalence determination ”;

• (b) in subparagraph (c), for “equivalence regulations” substitute “ equivalence determination ”.