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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.

©2019 Katten Muchin Rosenman LLP

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John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
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Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
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Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
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Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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