UK Government Sets Out Plan for Revoking EU Financial Services Laws08/02/2023
Following finalization of the Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023"), HM Treasury published a Delivery Plan for the Building a Smarter Financial Services Regulatory Framework for the UK. The Delivery Plan compliments the Policy Paper published as part of the Edinburgh Reforms (discussed in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services").
The FSM Act creates the framework for implementing the government's post-Brexit policy of revoking financial services retained EU law. The list of laws to be revoked is set out in Schedule 1 to the FSM Act and includes many EU Regulations, for example, the Markets in Financial Instruments Regulation, the Short Selling Regulation, the European Market Infrastructure Regulation, the Market Abuse Regulation, the Prospectus Regulation, the Packaged Retail and Insurance-Based Investment Products Regulation and the Sustainability Disclosures Regulation. Numerous pieces of U.K. subordinated legislation that implemented EU Directives are also included, such as the Settlement Finality Regulations and the Payment Services Regulations.
HM Treasury's Delivery Plan sets a clear path for implementing the revocation and restatement process which will occur over several phases. The intention is to divide the legislation listed in Schedule 1 of the FSM Act into different tranches, and prioritize the revocation and replacement of those where new legislation will most benefit the U.K. The Prospectus Regulation, the Securitisation Regulation, the Data Reporting Service Regulations 2017 (for development of a consolidated tape) and the Solvency II Directive are priorities. Draft statutory instruments and policy notes have been published for each of these. The government intends to lay the legislation before Parliament before the end of the year, subject to Parliamentary timings.
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