On October 25, 2018, the BoE issued a press release providing an update on its regulatory and supervisory approach to Brexit. The press release refers to a package of communications and new consultations published by the BoE on October 25, 2018. Building on previous communications with firms, this package of communications includes four consultation papers:
- A joint consultation on the BoE/Prudential Regulation Authority's general approach to making changes to PRA rules and to Binding Technical Standards to implement Brexit. This consultation is to be read in conjunction with the other three consultations.
- A PRA consultation on proposed changes to PRA rules and to the onshored BTS within the PRA's remit.
- A BoE consultation on changes to Financial Market Infrastructure rules and onshored BTS within the BoE's remit as FMI supervisor, along with a draft Supervisory Statement on the BoE's expectations of FMIs in relation to existing non-binding domestic material.
- A BoE consultation on the onshored BTS within the BoE's remit as the U.K. resolution authority.
Further guidance is also given on the process for authorization and recognition for incoming EEA firms and non-U.K. Financial Market Infrastructures. The PRA has sent a "Dear CEO" letter to impacted firms and the BoE has created a website page on the proposed operation of the Temporary Permissions Regime for incoming EEA firms, setting out details on entry and exit from the TPR, the process firms should follow for notifying the PRA of their intention to make use of the regime, applicable rules during the regime and transitional relief for some rules.
Further details on the temporary recognition regime for non-U.K. CCPs and the transitional process for non- U.K. CSDs are set out in new "Dear CEO" letters that were sent to non-U.K. CCPs and non-U.K. CSDs and supplement the previous such communications issued by the BoE earlier this year.
Firms and FMIs are asked to read the published materials and to continue to engage with their BoE and PRA contacts on their ongoing planning for Brexit. The materials are particularly relevant for:
- all firms authorized and regulated by the PRA;
- EEA firms undertaking cross-border activities into the U.K. from the rest of the EU;
- U.K. FMIs regulated by the BoE; and
- non-U.K. CCPs and non-U.K. Central Securities Depositories providing cross-border services into the U.K.
The proposed changes will only take effect on exit day in a "no-deal" scenario, in which the U.K. exits the EU on March 29, 2019 without a transitional period agreed between the U.K. and the EU as part of a Withdrawal Agreement. If there is a transitional period, the BoE expects that the changes would take effect at the end of that period.
The press release also states that the BoE has restructured its website to create a dedicated "EU Withdrawal" webpage, which provides access to all information on post-Brexit authorization, recognition and temporary permissions as well as all key communications issued by the BoE.
The BoE's press release is available at: https://www.bankofengland.co.uk/-/media/boe/files/news/2018/october/boes-approach-to-financial-services-legislation-under-the-eu-withdrawal-act-october-2018.pdf and the BoE's EU Withdrawal webpage is available at: https://www.bankofengland.co.uk/eu-withdrawal.
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