As part of the preparation for a ‘hard’ Brexit, the Treasury has published a Policy Note that accompanies a draft Bill covering in-flight financial services legislation, currently progressing through Parliament.
The Policy Note comments that in scope of the Bill are pieces of EU legislation agreed or in negotiation at the point of exit, with implementation dates falling in the two years after exit. As these are not yet law, they cannot be caught by the onshoring SIs published to cover in force legislation. Failure to make provision for these future laws in advance risks the UK government being unable to pass effective onshoring legislation in time. Accordingly, the Bill provides a (limited) mechanism for the government to implement the in scope legislation.
The Bill lists the in-flight files that have been identified as necessary (in whole, part or subject to modification) for UK financial services following exit. These include:
- articles 6 and 7 of the Central Securities Depositories Regulation and the
Delegated Cash Penalties Regulation
- the provisions of the Prospectus Regulation that apply from 21 July 2019
- the Capital Requirements Regulation II
- the Bank Recovery and Resolution Directive II
- Central Counterparty Recovery and Resolution Regulation
- European Market Infrastructure Regulation (Regulatory Fitness and
- Investment Firms Review
- Cross-Border Distribution of Funds Regulation & Directive
- Covered Bonds Regulation and Directive
- SME Growth Markets Regulation