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The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023

Draft. This instrument was laid in draft and may differ from the one made. Look for the made version under its title.

Draft 2023, ISBN 9780348253238

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

Draft Regulations laid before Parliament under sections 83(3), 84(3) and 84(5) of the Financial Services and Markets Act 2023, for approval by resolution of each House of Parliament.

Financial Services And Markets

Made ***

Coming into force 1st January 2024

The Treasury make these Regulations in exercise of the powers conferred by sections 83(1), 83(2) and 84(2) of the Financial Services and Markets Act 2023f1.

In accordance with sections 83(3), 84(3) and 84(5) of the Financial Services and Markets Act 2023, a draft of these Regulations has been laid before and approved by a resolution of each House of Parliament.

Annotations to the whole text

Footnotes

f1

2023 c. 29.

Contents

  1. Part 1: Introduction
  2. 1Citation, commencement and extent
  3. Part 2: Amendment of Primary Legislation
  4. 2Financial Services and Markets Act 2000
  5. 3Enterprise Act 2002
  6. 4Banking Act 2009
  7. 5Financial Services and Markets Act 2023
  8. Part 3: Amendment of Secondary Legislation
  9. 6Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001
  10. 7Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
  11. 8Financial Services and Markets Act 2000 (Qualifying Provisions) Order 2013
  12. 9Alternative Investment Fund Managers Regulations 2013
  13. 10Payment Card Interchange Fee Regulations 2015
  14. 11Payment Accounts Regulations 2015
  15. 12Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017
  16. 13Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018
  17. 14EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018
  18. 15Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019
  19. Part 4: Amendment of Retained Direct EU Legislation
  20. 16Regulation (EU) No 575/2013
  21. 17Regulation (EU) No 600/2014
  22. 18Commission Delegated Regulation (EU) 2015/35
  23. 19Commission Delegated Regulation (EU) 2017/565
  24. 20Commission Delegated Regulation (EU) 2017/567
  25. Signature
  26. Explanatory note

1Citation, commencement and extent

(1)

These Regulations may be cited as the Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023.

(2)

These Regulations come into force on 1st January 2024.

(3)

These Regulations extend to England and Wales, Scotland and Northern Ireland.

2Financial Services and Markets Act 2000

(1)

The Financial Services and Markets Act 2000f1 is amended as follows.

(2)

In section 55J (variation or cancellation on initiative of regulator)f2—

(a)

in subsection (6A)(e) (variation or cancellation in respect of UK AIFMs), omit sub-paragraph (iv) but not the “or” immediately following that sub-paragraph;

(b)

in subsection (6AA) (definition of AIFMD, ELTIF and MMF requirements for the purposes of subsection (6A)(e)), omit paragraph (b).

(3)

In section 143C (duty to make rules applying to FCA investment firms)f3, omit subsection (4).

(4)

In section 143D (duty to make rules applying to parent undertakings), omit subsections (5) and (6).

(5)

In section 143E (powers to make rules applying to parent undertakings)—

(a)

in subsection (5)—

(i)

for “and (6) apply” substitute “applies”;

(ii)

for “they apply” substitute “it applies”;

(b)

in subsection (6), omit “(5), ”.

(6)

In section 398(1A) (misleading FCA or PRA: residual cases)f4, omit paragraph (f).

3Enterprise Act 2002

In Schedule 13 to the Enterprise Act 2002 (listed enactments)f1, in paragraph 28A—

(a)

for “Parts 2 and 3” substitute “Part 3”;

(b)

for “Schedules 1 to 6” substitute “Schedules 3 to 6”.

4Banking Act 2009

In section 3 of the Banking Act 2009 (interpretation: other expressions)f1, in subsection (1), for the definition of ““relevant internal liabilities” of a bank or banking group company” substitute—

  • ““relevant internal liabilities” of a bank or banking group company means eligible liabilities held by a resolution entity in the same resolution group as the bank or banking group company, either directly or indirectly (through other entities in the same resolution group that bought the liabilities from the bank or banking group company),”.

5Financial Services and Markets Act 2023

In section 50(12) of the Financial Services and Markets Act 2023 (application of the Financial Services and Markets Act 2000 to the Bank of England: annual reports), for “(fa)” substitute “(fb)”.

6Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001

In article 16 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (communications required or authorised by enactments)f1, omit paragraph (4).

7Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

In article 29 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (communications required or authorised by enactments)f1, omit paragraph (5).

8Financial Services and Markets Act 2000 (Qualifying Provisions) Order 2013

(1)

The Financial Services and Markets Act 2000 (Qualifying Provisions) Order 2013f1 is amended as follows.

(2)

In article 1(2) (interpretation), omit the definition of “ELTIF Regulation”.

(3)

In article 2 (qualifying provisions: general), in paragraph (2), omit sub-paragraph (i).

(4)

In article 3 (qualifying provisions: disciplinary measures)—

(a)

in paragraph (2), omit sub-paragraph (j);

(b)

in paragraph (3), omit sub-paragraph (h).

(5)

In article 5 (qualifying provisions: injunctions and restitution)—

(a)

in paragraph (2), omit sub-paragraph (j);

(b)

in paragraph (5), omit sub-paragraph (i).

(6)

In article 6 (qualifying provisions: fees), in paragraph (2), omit sub-paragraph (l).

9Alternative Investment Fund Managers Regulations 2013

(1)

The Alternative Investment Fund Managers Regulations 2013f1 are amended as follows.

(2)

In regulation 2(1) (interpretation)f2, omit the following definitions—

(a)

“EEA ELTIF”;

(b)

“ELTIF Regulation”;

(c)

“UK LTIF”.

(3)

Omit Part 3A (LTIFs)f3.

(4)

In regulation 30 (depositary liability for loss of financial instruments held in custody), omit paragraph (7)f4.

(5)

In regulation 32 (depositary liability and third country custodians), omit paragraph (3)f5.

(6)

In regulation 52 (contravention by unauthorised person), in paragraph (1), omit sub-paragraph (c)f6.

(7)

In regulation 53 (contravention by authorised person), in paragraph (1), omit sub-paragraph (c)f7.

10Payment Card Interchange Fee Regulations 2015

In the Payment Card Interchange Fee Regulations 2015f1, after regulation 4A (directions: payment card schemes)f2, insert—

“Directions: co-operation between regulators

4B.

For the purposes of section 98 of the 2013 Act (duty of regulators to ensure co-ordinated exercise of functions)f3, the reference in section 98(6)(a) to the interchange fee regulationf4 is to be read as including a reference to a direction given under regulation 4A.

Power of FCA to require Regulator to refrain from specified action

4C.

For the purposes of section 101 of the 2013 Act (power of FCA to require the Regulator to refrain from specified action), in section 101(2) —

(a)

the reference to “this Part” is to be read as including a reference to regulation 4A;

(b)

the reference to “a participant in a regulated payment system” is to be read as a person referred to in regulation 4A(1).”.

11Payment Accounts Regulations 2015

(1)

The Payment Accounts Regulations 2015f1 are amended as follows.

(2)

In regulation 2(1) (interpretation), omit the following definitions—

(a)

“fee information document”;

(b)

“linked services list”;

(c)

“statement of fees”.

(3)

In regulation 28(1) (monitoring and enforcement), in sub-paragraph (a), omit “2, ”.

(4)

In regulation 29(1) (reporting requirements), omit “2, ”.

(5)

In regulation 30(1) (power to direct payment service providers), omit “2, ”.

(6)

Omit regulation 40A (technical standards)f2.

12Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017

In regulation 47B of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (statements of policy)f1, in paragraph (1)(a), omit paragraph (i).

13Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018

In Part 1 of the Schedule to the Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 (EU Regulations for which the FCA is the appropriate regulator)f1, omit paragraph 6A.

14EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018

In regulation 24 of the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (Financial Services Compensation Scheme - modifications of Part 15 of the Financial Services and Markets Act 2000)f1, in paragraph (2)(b), in the modification of section 213 of the Financial Services and Markets Act 2000—

(a)

in subsection (9B)(f)—

(i)

after sub-paragraph (i) omit “, or”;

(ii)

omit sub-paragraph (ii);

(b)

in subsection (9C), omit the following definitions—

(i)

“ELTIF”;

(ii)

“ELTIF Regulation”.

15Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019

In regulation 11 of the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 (saving for certain financial services legislation relating to Gibraltar)f1, in paragraph (5), omit sub-paragraph (m).

16Regulation (EU) No 575/2013

(1)

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 648/2012f1 is amended as follows.

(2)

In Article 6 (general principles)f2, in paragraph 1a, omit the words from “material subsidiaries” to the end of the paragraph.

(3)

In Article 11 (general treatment)f3, in paragraph 3a, omit the words from “only UK parent undertakings” to the end of the paragraph.

(4)

In Article 18 (methods of prudential consolidation)f4, in paragraph 1, omit “or 92b”.

(5)

In Article 49 (requirement for deduction where consolidation or supplementary supervision is applied)f5, in paragraph 2, for “Articles 92a and 92b” substitute “Article 92a”.

17Regulation (EU) No 600/2014

(1)

Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012f1 is amended as follows.

(2)

In Article 4 (waivers for equity instruments)—

(a)

in paragraph 1(a), omit the final sentence;

(b)

in paragraph 1(b)(i), omit “, subject to the conditions set out in Article 5”.

(3)

In the following provisions, for “5(3A)”, in each place where it occurs, substitute “14(6D)”f2—

(a)

in Article 9 (waivers for non-equity instruments), paragraph 4A;

(b)

in Article 11 (authorisation of deferred publication), paragraph 2A;

(c)

in Article 21 (post-trade disclosure by investment firms, including systematic internalisers, in respect of bonds, structured finance products, emission allowances and derivatives), paragraph 4A.

18Commission Delegated Regulation (EU) 2015/35

In Article 168 of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)f1, in paragraph 6 (general provisions: equities considered as type 1), omit point (d).

19Commission Delegated Regulation (EU) 2017/565

(1)

Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directivef1 is amended as follows.

(2)

In Article 12 (systematic internalisers for shares, depositary receipts, ETFs, certificates and other similar financial instruments)—

(a)

in paragraph 2, omit “5, ”;

(b)

in paragraph 3, for “5(3A)” substitute “14(6D)”.

(3)

In the following provisions, for “5(3A)”, in each place where it occurs, substitute “14(6D)”—

(a)

in Article 13 (systematic internalisers for bonds), paragraph 2;

(b)

in Article 14 (systematic internalisers for structured finance products), paragraph 2;

(c)

in Article 15 (systematic internalisers for derivatives), paragraph 2;

(d)

in Article 16 (systematic internalisers for emission allowances), paragraph 2;

(e)

in Article 16ZA (transitional period: data for calculations)f2, paragraph 1.

20Commission Delegated Regulation (EU) 2017/567

In Article 5 of Commission Delegated Regulation (EU) 2017/567 of 18 May 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions (assessment of liquidity of equity instruments by the competent authorities (Article 2(1)(17)(b) of Regulation (EU) No 600/2014))f1—

(a)

in paragraph 1A, for “5(3A)” substitute “14(6D)”;

(b)

in paragraph 6, omit “5, ”.

Signature

Name

Name

Two of the Lords Commissioners of His Majesty’s Treasury

Date

Explanatory note

(This note is not part of these Regulations)

Section 1 of the Financial Services and Markets Act 2023 (c. 29) (“the Act”) revokes (or, where appropriate, repeals) retained EU law which is referred to in Schedule 1 to the Act.

These revocations and repeals include—

  • the revocation of Article 92b of 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 revocation of legislation relating to Long-Term Investment Funds (“LTIFs”);

  • Part 2 of, and Schedules 1 and 2 to, the Payment Accounts Regulations 2015 (S.I. 2015/2038); and

  • the repeal of legislation containing certain restrictions on powers of the Financial Conduct Authority to make rules that modify, amend or revoke retained direct EU legislation.

Those particular revocations and repeals take effect on 1st January 2024 by virtue of regulation 5 of the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023 (S.I. 2023/779 (C. 40)).

Regulations 2 to 4, 6 to 9, 11, 13 to 16 and 18 make consequential amendments in connection with those revocations and repeals.

These Regulations also make various other amendments that are consequential on the Act or provision made under it.

Regulation 5 amends section 50(12) of the Act in consequence of section 21(4)(b) of the Act, to provide that the required content of the Bank of England’s annual report on its regulation of financial market infrastructure is consistent with its regulatory obligations.

Regulation 10 amends the Payment Card Interchange Fee Regulations 2015 (S.I. 2015/1911) (“the PCIFRs”) in consequence of the amendments made to the PCIFRs by regulation 3 of the Electronic Money, Payment Card Interchange and Payment Services (Amendment) Regulations 2023 (S.I. 2023/790), which were made under section 3 of the Act.

Regulations 12, 17, 19 and 20 amend the Financial Services and Markets Act 2000 (Markets in Financial Instruments Regulations) 2017 (S.I. 2017/701), Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (“MiFIR”) and two related delegated Regulations. The amendments to these instruments are consequential on the omission of Article 5 of MiFIR by paragraph 5 of Schedule 2 to the Act.

An impact assessment has not been produced for these Regulations as no, or no significant, impact on the private, voluntary or public sector is foreseen.