Regulation 4 Amendments to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001

in Part 1 (recognition requirements for investment exchanges), after paragraph 9I M5 insert—

“Reporting of infringements

9J

(1)

The exchange must have in place appropriate procedures for its employees to report actual or potential infringements of the CSD regulation and any directly applicable EU regulation made under that regulation internally through a specific, independent and autonomous channel.

(2)

The protections set out in points (b), (c) and (d) of Article 65(2) of that regulation (reporting of infringements) must be applied in relation to those procedures.”;

in Part 2 (recognition requirements for investment exchanges: default rules in respect of market contracts)—

in Part 4 (recognition requirements applying to clearing houses: default rules in respect of market contracts)—

in Part 5 (recognition requirements for central counterparties), after paragraph 31 insert—

“Reporting of infringements

31A

(1)

The central counterparty must have in place appropriate procedures for its employees to report actual or potential infringements of the CSD regulation and any directly applicable EU regulation made under that regulation internally through a specific, independent and autonomous channel.

(2)

The protections set out in points (b), (c) and (d) of Article 65(2) of that regulation (reporting of infringements) must be applied in relation to those procedures.”;

after Part 6 M10 (recognition requirements applying to central counterparties: default rules) insert—

“ PART 7

Recognition requirements for Central Securities Depositories

Requirements of the CSD regulation

37

The central securities depository must meet the requirements set out in the CSD regulation and any directly applicable EU regulation made under that regulation.

Access to settlement facilities

38

(1)

The central securities depository must make transparent and non-discriminatory rules, based on objective criteria, governing access to settlement facilities provided by it.

(2)

The rules under sub-paragraph (1) must enable an investment firm or a credit institution authorised by the competent authority of another EEA State (including a branch established in the United Kingdom of such a firm or institution) to have access to those facilities on the same terms as a UK firm for the purposes of finalising or arranging the finalisation of transactions in financial instruments.

Reporting of infringements

39

(1)

The central securities depository must have in place appropriate procedures for its employees to report actual or potential infringements of the CSD regulation and any directly applicable EU regulation made under that regulation internally through a specific, independent and autonomous channel.

(2)

The protections set out in points (b), (c) and (d) of Article 65(2) of that regulation (reporting of infringements) must be applied in relation to those procedures.

Investment services and activities

40

(1)

A central securities depository providing investment services and activities in addition to the services explicitly listed in Sections A and B of the Annex to the CSD regulation must comply with—

(a)

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (recast) M11 except for Articles 5 to 8, 9(1), (2) and (4) to (6) and 10 to 13 of that directive, and

(b)

Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments M12.

(2)

Until 3rdJanuary 2018—

(a)

the reference in sub-paragraph (1)(a) to Articles 5 to 8, 9(1), (2) and (4) to (6) and 10 to 13 of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (recast) is to be read as a reference to Articles 5 to 10b of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments M13, and

(b)

sub-paragraph (1)(b) does not apply.”.