OpenLegislation

Explanatory note

Original text. Later amendments are not shown.

(This note is not part of the Regulations)

Section 1 of, and Schedule 1 to, the Financial Services and Markets Act 2023 (c. 29) revokes Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (“the Capital Requirements Regulation”). Article 4 of the Capital Requirements Regulation (“Article 4”) sets out definitions of key terms used in that Regulation and other legislation. The full revocation of Article 4 comes into force on 1st January 2027 by virtue of the Financial Services and Markets Act 2023 (Commencement No. 13) Regulations 2026 (S.I. 2026/174 (C. 17)).

These Regulations restate some of the definitions in Article 4 by amending primary and secondary legislation, and make consequential amendments closely connected with the restatement. The definitions are restated to ensure that the relevant terms used in legislation continue to work.

Part 2 of these Regulations amends the Financial Services and Markets Act 2000 (c. 8) (FSMA 2000) in relation to the following definitions:

  • “CRR firm” in section 144B (see regulation 9);

  • “UK parent financial holding company” and “UK parent mixed financial holding company” in section 192O (see regulation 10);

  • “financial holding company”, “financial institution”, “mixed financial holding company” and “asset management company” in section 417 (see regulation 15).

Regulation 15 restates the definition of “investment firm” in Article 4 by inserting the new definition of “Part 4A investment firm” into section 417.

Regulation 18 inserts Schedule 19D to FSMA 2000, which restates a subset of activities falling within the definition of “Annex 1 activities” in Article 4.

Regulation 19 amends the definition of “own funds” in section 3 of the Banking Act 2009 (c. 1) and makes related amendments.

Part 3 of these Regulations restates the following definitions by amending secondary legislation:

  • “ancillary services undertaking” and “common management relationship” in the Financial Conglomerates and Other Financial Groups Regulations 2004 (S.I. 2004/1862) (see regulation 20);

  • “UK parent institution” in the Bank Recovery and Resolution (No. 2) Order 2014 (S.I. 2014/3348) (see regulation 22).

Regulation 21 makes consequential amendments relating to new Schedule 19D to FSMA 2000 by amending the Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014 (S.I. 2014/2080).

Regulation 23 amends the definition of “securitisation” in the Securitisation Regulations 2024 (S.I. 2024/102).

No impact assessment has been published in respect of these Regulations because no impact, or no significant impact, on the private, voluntary or public sector is foreseen.