On July 16, a draft of the Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 was published. The publication of the draft regulations follows the making of the first delegated legislation under the European Union (Withdrawal) Act 2018 earlier this month (discussed in the Corporate & Financial Weekly Digest edition of July 13, 2018) and provides one of the first indications of the UK approach to “onshoring” EU legislation as part of the United Kingdom’s withdrawal from the European Union (Brexit).
The draft regulations grant certain UK authorities (the Financial Conduct Authority, the Prudential Regulation Authority, the Bank of England and the Payment Systems Regulator) powers to make and amend binding technical standards (BTS) in relation to EU laws which will be retained in UK law after Brexit. At present, the European supervisory authorities (e.g., the European Securities and Markets Authority) are responsible for drafting BTS. However, the European supervisory authorities’ functions will no longer cover the United Kingdom after Brexit, when existing BTS will become part of UK law. The draft regulations also provide the UK financial regulators with the ability to correct deficiencies which may arise.
The schedules to the draft regulations set out specific EU legislation in relation to which each regulator is considered the “appropriate regulator.” In certain circumstances, where under the draft regulations two regulators are deemed the “appropriate regulator,” each regulator must consult with, or obtain consent from, the other such regulator before amending the relevant retained EU regulation.