The UK’s withdrawal from the European Union (EU) requires changes to be made to UK legislation to ensure that it remains functional. The European Union (Withdrawal) Act 2018 (the ‘Act’) converts directly applicable EU law (eg EU Regulations) into UK law and preserves domestic law that relates to EU membership (including domestic law that was introduced to implement EU Directives). This body of law is referred to as ‘retained EU law’. The Act also provides Government ministers with powers to make changes to the law so that it continues to operate effectively after the UK’s withdrawal from the EU – these processes are referred to as ‘onshoring’ or ‘Nationalising the Acquis’ (NtA).
This Consultation Paper (CP) contains two consultations to fix deficiencies arising from the UK’s withdrawal from the EU and make consequential changes:
- Part 1 sets out the Prudential Regulation Authority’s (PRA) proposals in relation to the PRA Rulebook and Binding Technical Standards (BTS) within the PRA’s remit that will be retained, or ‘onshored’, in UK law.
- Part 2 sets out proposals by the Bank of England (Bank) acting as resolution authority in relation to two BTS under the Bank Resolution and Recovery Directive (BRRD).
This CP is published as a part of the Bank’s consultations on amending financial services legislation under the Act. The Bank and PRA are consulting on further changes in this CP to ensure an operable legal framework after the UK leaves the EU, and to reflect onshoring changes made by HM Treasury in the relevant draft Statutory Instruments (SIs) or relevant explanatory policy materials made available by HM Treasury since the publication of the Bank’s and PRA’s consultations in October 2018.
This CP is relevant to all firms authorised and regulated by the PRA (including those that expect to have a deemed permission under the ‘temporary permissions regime’ (TPR) or Financial Services Contracts Regime (FSCR), or that seek to apply for PRA authorisation in the future. It is also relevant to firms which are treated as exempt in relation to certain regulated activities under the FSCR.
As set out in the NtA approach CP, the changes proposed in this CP would take effect at 11:00pm on Friday 29 March 2019 (‘exit day’) only in the event that there is no Implementation Period. If the Withdrawal Agreement between the UK and EU is ratified and the Implementation Period commences on exit day, the proposed changes would not take effect until after the end of the Implementation Period. Further modifications to the PRA Rulebook and onshored BTS may be required to reflect any arrangements made between the UK and EU as part of their future relationship.
This consultation closes on Monday 21 January 2019. The PRA and Bank invites feedback on the additional proposals set out in this consultation. Please address any comments or enquiries using the details provided in Chapter 8 (for proposals set out in Part 1) and Chapter 10 (for proposals set out in Part 2).
Responses to this CP will be shared with the FCA.
The CP including the Appendices runs to 150 pages. To be helpful to readers, we have included a complete and split version of the CP below.