Bank of England Consults on Changes to Brexit Onshoring Legislation
09/22/2020The Bank of England has launched a consultation on proposed changes to the BoE and Prudential Regulation Authority's Brexit onshoring legislation. The U.K. left the EU on January 31, 2020. Under the terms of the EU Withdrawal Agreement, the U.K. agreed that EU legislation continues to apply in the U.K. until the end of the transition or implementation period on December 31, 2020 (known as "IP completion day"). The existing Brexit onshoring legislation ensures that, after EU law ceases to apply in the UK at the end of the transition or implementation period, U.K. legislation remains functional. Further updates to the onshoring legislation and regulatory rules are needed, however, to take account of the transition or implementation period (which delayed the entry into force of the onshoring legislation) and of additional EU legislation that will apply in the U.K. prior to the end of that period.
The consultation is relevant to all PRA-regulated firms and financial market infrastructures that are recognized and supervised by the BoE, including those that expect to have a deemed PRA permission or BoE recognition under the U.K.'s temporary permissions and recognition regimes. The consultation paper is divided into two key sections: (i) Part A, which provides an update on the BoE and PRA's intended use of their temporary transitional powers (the powers granted to U.K. financial services regulators to enable firms to adjust to changes made by onshoring legislation); and (ii) Part B, which sets out the BoE and PRA's proposed amendments to U.K. onshoring legislation and regulatory rules. The proposed amendments include:
- Updating references to "exit day" in existing BoE and PRA Exit Instruments (which should now refer instead to IP completion day); and
- Amendments to the PRA rulebook and PRA and BoE Binding Technical Standards that implement retained EU Technical Standards into U.K. BTS. These include taking account of new EU TS that are expected to come into force and be applicable prior to IP completion day and so will need to be transposed correctly into U.K. law.
Responses to the consultation should be submitted by November 17, 2020. The changes proposed in the consultation paper are intended to take effect from the end of the Brexit transition period on December 31, 2020.
View the BoE's consultation on changes to Brexit onshoring legislation.
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