March 2, 2021

Volume XI, Number 61

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March 02, 2021

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March 01, 2021

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Bank of England and PRA Publish Brexit Package of Consultations and Communications

On October 25, the Bank of England (BoE) and the UK Prudential Regulation Authority (PRA) published a package of Brexit-related communications and consultation papers which propose changes to the relevant onshored binding technical standards (BTS), the rules for financial market infrastructure providers (FMIs) and the PRA Rulebook, which arise from the UK’s withdrawal from the European Union.

The package of communications and consultations includes the following:

  • Three “Dear CEO” letters, the first to all firms authorized and regulated by the PRA, as well as European Economic Area (EEA) firms undertaking cross-border activities into the United Kingdom from the rest of the EEA via passporting. The other letters are addressed to non-UK central counterparties and non-UK central securities depositories, updating them on the BoE’s approach to their preparations for withdrawal from the EU;

  • A joint BoE/PRA consultation paper that sets out the general approach to making changes to rules and BTS, including the proposed use of transitional powers. It also contains a draft Supervisory Statement (SS) indicating their expectations of firms and FMIs in relation to EU guidelines and recommendations;

  • A PRA consultation paper which sets out the key changes to PRA rules and relevant BTS. The consultation covers changes related to EU legislation where HM Treasury has either published its policy intention, published the related legislation in draft or has laid it before Parliament;

  • An FMI consultation paper which sets out the key changes to FMI-related binding technical standards and rules. The consultation also contains a draft SS on the BoE’s expectations of FMIs in relation to existing non-binding domestic material; and

  • A resolution consultation paper which sets out changes to BTS in relation to resolution. It also proposes how firms should interpret existing BoE Statements of Policy on resolution in light of any deficiencies arising from the UK’s withdrawal from the EU.

The proposed changes set out in the consultation papers are intended to ensure that there is a functioning legal framework for UK regulation when the UK leaves the EU. The package of measures does not reflect any policy changes other than those related to EU withdrawal, and builds on previous communications to firms on their preparations around EU withdrawal.

The deadline for comments on all four consultation papers is January 2, 2019.

A press release with links to each of the items in the package is available here.

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©2020 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 307
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About this Author

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...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

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...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

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...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

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...

44-0-20-7776-7666
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