HM Treasury has published a draft version of the Financial Conglomerates and other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019. The supplementing explanatory note was published in October 2018. The purpose of the SI is to ensure that the Financial Conglomerates and Other Financial Groups Regulations 2004 (FICOR) will remain operative in a UK-only context post-exit. The SI:
- amends the geographical restriction in the definition of a "financial conglomerate" so that one entity must be located within the UK, rather than the EEA, while other(s) may be located anywhere in the world. The Treasury expects that this change will not affect financial conglomerates already operating in the UK;
- amends the definition of a "competent authority" to refer to UK regulators only;
- transfers the functions of the European Banking Authority (EBA) and ESMA to the relevant UK authorities with regards to publishing and maintaining information, for example, a list of financial conglomerates;
- removes the unilateral obligation on UK supervisors to share information or cooperate with EU authorities; and
- gives the PRA and the FCA the responsibility for correcting deficiencies in the Financial Conglomerates Directive BTA and for ensuring these BTS remain fit for purpose after exit.
HM Treasury intends to lay this instrument before Parliament prior to exit day. The FCA and the PRA will update their rulebooks and relevant BTS to reflect the changes introduced through this SI. See our Updates of 5 December 2018 and 24 October 2018 for Brexit changes to the FCA Handbook and BTS.