Bank of England and FCA Provide Updates on Post-Brexit Market Infrastructure Transitional Arrangements and Applications
On January 24, the Bank of England updated its financial market infrastructure supervision websites with interim lists of entities and systems that will enter into the various temporary or transitional arrangements on exit day should the United Kingdom leave the European Union with no implementation period. The lists consist of:
Third-country central counterparties (CCPs) that will offer clearing services and activities in the UK under the temporary recognition regime of the Central Counterparties (Amendments, etc., and Transitional Provision) (EU Exit) Regulations 2018;
Third-country central securities depositories (CSDs) that will provide CSD services in the United Kingdom using the transitional provisions of the Central Securities Depositories (Amendment) (EU Exit) Regulations 2018; and
European Economic Area (EEA) systems whose operators have indicated their intention for such systems to receive settlement finality protection in the United Kingdom pursuant to the draft temporary designation regime of the Draft Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019.
Each of the lists is non-exhaustive, containing only those entities that have consented to their inclusion and disclosure on such lists which will be updated periodically. The final lists will be published after exit day.
Separately, on January 30, the UK Financial Conduct Authority (FCA) published a list of EEA market operators (as defined in the revised Markets in Financial Instruments Directive (MiFID II)) that have applied or have given notice of their formal intention to apply to become recognized overseas investment exchanges (ROIEs) in the United Kingdom.
The FCA has published the list in response to its September 2018 direction that clarified how market operators from the EEA can apply to become ROIEs (for further details, see the September 14, 2018 edition of Corporate & Financial Weekly Digest). ROIE status allows EEA market operators to continue to provide their UK-based members with access to their market, should they no longer be able to rely on MiFID II passport rights once the United Kingdom leaves the European Union.
The FCA warns that just because a market operator is on the list, it should not be taken as evidence that its application to become an ROIE is likely to succeed. The FCA will update the list from time to time.
The list of CCPs is available here.
The list of CSDs is available here.
The list of EEA systems is available here.
The list of ROIE applicants is available here.