PART 2Amendment of EU Regulations
CHAPTER 1Amendment of Regulation (EU) 2016/1011
DefinitionsI15
1
Article 3 (definitions) is amended as follows.
2
Paragraph 1 is amended as follows.
3
In point (10) (definition of ‘supervised contributor’), for “Union” substitute “
United Kingdom
”
.
4
In point (16) (definition of ‘financial instrument’)—
a
for “listed in Section C of Annex I to Directive 2014/65/EU” substitute “
specified in Part 1 of Schedule 2 to the Regulated Activities Order
”
;
b
for the words from “trading venue”, where first occurring, to the end substitute “
UK trading venue has been made, or which is traded on a UK trading venue or via a systematic internaliser as defined in Article 2(1)(12) of the Markets in Financial Instruments Regulation;
”
.
5
In point (17) (definition of ‘supervised entity’)—
a
for points (a) and (b) substitute—
a
a CRR firm as defined in Article 4(1)(2A) 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, which is a credit institution referred to in point (a)(i) of that definition;
b
a UK investment firm, which means an investment firm as defined in Article 2(1A) of the Markets in Financial Instruments Regulation which has its head office in the United Kingdom;
b
in point (c), for the words from “point (1)” to the end substitute “
section 417(1) of FSMA
”
M1
;
c
in point (d), for the words from “point (4)” to the end substitute “
section 417(1) of FSMA
”
M2
;
d
in point (e)—
i
for “UCITS as defined in Article 1(2) of Directive 2009/65/EC” substitute “
UK UCITS as defined in section 237(3) of FSMA
”
M3
;
ii
for the words from “UCITS management company” to the end substitute “
management company as defined in section 237(2) of FSMA
”
M4
;
e
in point (f), for the words from “point (b)” to the end substitute “
regulation 4 of the Alternative Investment Fund Managers Regulations 2013
”
M5
;
f
after point (g) insert—
ga
an occupational pension scheme as defined in section 1(1) of the Pension Schemes Act 1993;
g
in point (h), for the words from “purposes of” to the end substitute—
purposes of:
i
a credit agreement which, immediately before F1IP completion day, satisfied the definition of a credit agreement in Article 3(17)(h) of the EU Benchmarks Regulation; or
ii
a credit agreement as defined in point (c) of Article 3 of Directive 2008/48/EC read in accordance with the modifications made to that Directive by points (18A) and (18B);
h
for point (i) substitute—
i
a non-credit institution, which means a mortgage creditor (as defined in s.423A of FSMA) that is not a credit institution (as defined in Article 4(1)(1) of Regulation (EU) No 575/2013), for the purposes of a mortgage agreement (as defined in section 423A of FSMA;
i
in point (j), for “point (18) of Article 4(1) of Directive 2014/65/EU” substitute “
Article 2(1)(10) of the Markets in Financial Instruments Regulation
”
.
6
For point (18) (definition of ‘financial contract’) substitute—
18
‘financial contract’ means:
a
a credit agreement which, immediately before F2IP completion day, satisfied the definition of a credit agreement in Article 3(17)(h) of the EU Benchmarks Regulation;
aa
a credit agreement as defined in point (c) of Article 3 of Directive 2008/48/EC read in accordance with the modifications made to that Directive by points (18A) and (18B);
b
a mortgage agreement as defined in section 423A of FSMA;
7
After point (18) insert—
18A
For the purposes of points (17)(h)(ii) and (18)(aa), Article 2 of Directive 2008/48/EC is to be read as if:
a
in paragraph 1—
i
for “Directive” there were substituted
“ Article ”;ii
after “credit agreements” there were inserted
“ where the act of entering into the credit agreement or exercising the lender's rights and duties under the credit agreement is carried on in the United Kingdom ”.b
in paragraph 2:
i
in the opening words, for “Directive” there were substituted
“ Article ”;ii
for points (a) and (b) there were substituted—
a
an agreement to which section 423A(2) of the Financial Services and Markets Act 2000 applies;
iii
in point (h)—
aa
for the words from “investment firms” to “financial instruments” there were substituted
“ a UK investment firm (as defined in Article 3(1)(17)(b) of Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014) ”;bb
for “as defined in Article 4 of Directive 2006/48/EC” there were substituted
“ (as defined in Article 4(1)(1) 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) ”;cc
for “listed in Section C of Annex 1 to Directive 2014/65/EU” there were substituted
“ specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ”;c
in paragraph 2a, for “Directive” there were substituted
“ Article ”;d
paragraphs 3 to 6 were omitted.
18B
For the purposes of points (17)(h)(ii) and (18)(aa), Article 3(a) of Directive 2008/48/EC is to be read as if for “transactions covered by this Directive” there were substituted
“ respect of a credit agreement to which Article 2 applies ”.
8
For point (19) (definition of ‘investment fund’) substitute—
19
‘investment fund’ means:
a
an AIF as defined in regulation 3 of the Alternative Investment Fund Managers Regulations 2013 M8;
b
a UK UCITS as defined in section 237(3) of FSMA;
9
In point (23) (definition of ‘commodity benchmark’), for the words from “is a commodity” to the end substitute—
is:
a
a commodity, which means any goods of a fungible nature that are capable of being delivered, including metals and their ores and alloys, agricultural products, and energy such as electricity;
b
not an emission allowance referred to in paragraph 11 of Part 1 of Schedule 2 to the Regulated Activities Order;
F59A
In point (23a), for “EU”, in both places, substitute “
UK
”
.
9B
In point (23b), for “EU”, in both places, substitute “
UK
”
.
10
In point (24), in point (a) of the definition of “regulated-data benchmark”—
a
for point (i) substitute—
i
a UK trading venue, but only with reference to transaction data concerning financial instruments;
ia
a trading venue (as defined in Article 2(1)(16) of the Markets in Financial Instruments Regulation) in a third country if:
aa
the Treasury have made regulations determining that the legal and supervisory framework of the third country is equivalent in accordance with paragraph 4 of Article 28 of the Markets in Financial Instruments Regulation, or
bb
a decision has been adopted by the European Commission before F3IP completion day determining that the legal and supervisory framework of the third country is equivalent in accordance with paragraph 4 of Article 28 of 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 M9 as it had effect in the European Union immediately before F3IP completion day,
but only with reference to transaction data concerning financial instruments;
ib
a regulated market (as defined in Article 2(1)(13) of the Markets in Financial Instruments Regulation) that is considered to be equivalent in accordance with:
aa
regulations made by the Treasury under Article 2a of Regulation (EU) No 648/2012, or
bb
but only with reference to transaction data concerning financial instruments;
b
in point (ii)—
i
for “point (52) of Article 4(1) of Directive 2014/65/EU” substitute “
Article 2(1)(34) of the Markets in Financial Instruments Regulation
”
;
ii
for “point (53) of Article 4(1) of Directive 2014/65/EU” substitute “
Article 2(1)(35) of the Markets in Financial Instruments Regulation
”
;
iii
before “trading venue” insert “
UK
”
;
c
in point (iii)—
i
for “point (54) of Article 4(1) of Directive 2014/65/EU” substitute “
Article 2(1)(36) of the Markets in Financial Instruments Regulation
”
;
ii
before “trading venue” insert “
UK
”
;
d
in point (iv), for the words from “as referred to” to the end substitute “
operating in an electricity market in the United Kingdom;
”
;
e
in point (v), for the words from “as referred to” to the end substitute “
operating in a gas market in the United Kingdom;
”
;
F6f
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
in point (vii), for “(vi)” substitute “
(v)
”
.
11
For point (25) (definition of ‘critical benchmark’) substitute—
25
‘critical benchmark’ means a benchmark listed in:
a
Commission Implementing Regulation (EU) 2016/1368 of 11 August 2016 establishing a list of critical benchmarks used in financial markets pursuant to Regulation (EU) 2016/1011 of the European Parliament and of the Council; or
b
regulations made by the Treasury under paragraph 5 or 6 of Article A20 or paragraph 5 of Article 20;
12
In point (27) (non-significant benchmark), for the words from “does not” to the end substitute “
is not a critical benchmark or a significant benchmark
”
.
13
At the end insert—
30
‘EU Benchmarks Regulation’ means Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 M11 as it had effect in the European Union before F4IP completion day;
31
‘FCA register’ means the register of administrators and benchmarks established and maintained by the FCA in accordance with Article 36(1);
32
‘FSMA’ means the Financial Services and Markets Act 2000;
33
‘Markets in Financial Instruments Regulation’ means 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;
34
‘Regulated Activities Order’ means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
35
‘third country’ means a country outside the United Kingdom;
36
‘UK trading venue’ has the meaning given in Article 2(1)(16A) of the Markets in Financial Instruments Regulation.
14
In paragraph 2—
i
in the first subparagraph, for the words from “Commission” to “in order to” substitute “
Treasury may by regulations
”
;
ii
in the second subparagraph, for “Commission” substitute “
Treasury
”
.
15
In paragraph 3—
a
in the first subparagraph—
i
for the words from “Commission” to “review” substitute “
Treasury may by regulations specify
”
;
ii
for “Union” substitute “
United Kingdom
”
;
iii
omit the second sentence;
b
in the second subparagraph, for “Commission” substitute “
Treasury
”
.