Explanatory note

Regulation 3 of these Regulations amends regulation 3(8) (appropriate regulator) of the DSS regulations to make further provision about who the appropriate regulator is in relation to certain ancillary FMI activities (as defined in regulation 3(6) of the DSS Regulations).

Regulation 4 amends Part 1 of the Schedule to the DSS Regulations by adding a reference to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692).

Regulation 5 amends Part 2 of the Schedule by making minor changes to the existing modifications to the UK Central Securities Depository Regulation (Regulation (EU) No909/2014). The modifications require a digital securities depository to create and operate a “whistle-blowing” scheme to allow employees to report actual or potential infringements in connection with the digital securities sandbox.

Regulation 6 amends Part 3 of the Schedule. It disapplies section 20 of FSMA 2000 when an authorised person is carrying on FMI activities as a digital securities depository or ancillary FMI activities for what would otherwise be a contravention under that section. It also makes a minor change to the existing modifications made to paragraph 21 of Schedule 17A to FSMA 2000.

Regulation 7 inserts a new Part 6 of the Schedule to the DSS Regulations and makes modifications to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692).

A full impact assessment has not been produced for this instrument, as no, or no significant, impact on the private, voluntary or public sector is foreseen. A de minimis impact assessment of the effect of this instrument is available from HM Treasury, 1 Horseguards Road, London, SW1A 2HQ and is published alongside this instrument on www.legislation.gov.uk.