2020 No. 117
Financial Services

The Financial Services and Markets Act 2000 (Central Counterparties, Investment Exchanges, Prospectus and Benchmarks) (Amendment) Regulations 2020

Made
Laid before Parliament
Coming into force in accordance with regulation 1(2)
The Treasury make these Regulations in exercise of the powers conferred by section 2(2) of the European Communities Act 19721.
The Treasury are a government department designated2 for the purposes of section 2(2) of the European Communities Act 1972 in relation to financial services.

PART 1General provision

Citation and commencement1.

(1)

These Regulations may be cited as the Financial Services and Markets Act 2000 (Central Counterparties, Investment Exchanges, Prospectus and Benchmarks) (Amendment) Regulations 2020.

(2)

Subject to paragraph (3), these Regulations come into force at the end of the period of twenty-five days beginning with the day on which these Regulations are made.

(3)

Regulation 4 comes into force on 26th March 2020.

PART 2Amendment of primary legislation

The Financial Services and Markets Act 20002.

In section 313(1) (interpretation of Part 18) of the Financial Services and Markets Act 20003, in the definition of “the EMIR regulation”4, after “trade repositories” insert “as last amended by Regulation (EU) 2019/2099 of the European Parliament and of the Council of 23 October 2019”.

PART 3Amendment of secondary legislation

The Financial Services and Markets Act 2000 (Regulated Activities) Order 20013.

In article 35A (trade repositories) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 20015, in paragraph (2), for “the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No.2) Regulations 2019” substitute “the Financial Services and Markets Act 2000 (Central Counterparties, Investment Exchanges, Prospectus and Benchmarks) (Amendment) Regulations 2020”.

The Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 20014.

(1)

Paragraph 3G (tick size regimes) of Schedule 1 to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 20016 is amended as follows.

(2)

In sub-paragraph (1), for “The exchange” substitute “Subject to sub-paragraph (1A), the exchange”.

(3)

After sub-paragraph (1), insert—

“(1A)

The application of tick sizes shall not prevent the exchange from matching orders that are large in scale (as determined in accordance with Article 4 of the markets in financial instruments regulation) at the mid-point within the current bid and offer prices.”.

The Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 20135.

In article 1 (citation, commencement and interpretation) of the Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 20137, for paragraph (3A) substitute—

“(3A)

In this Order references to the EU Benchmarks Regulation 2016, the EU Prospectus Regulation and the European market infrastructure regulation are to be treated as a reference to the respective EU regulation as it has effect at the beginning of the day on which Financial Services and Markets Act 2000 (Central Counterparties, Investment Exchanges, Prospectus and Benchmarks) (Amendment) Regulations 2020 are made (but see regulation 2 of the European Union (Withdrawal) Act 2018 (Consequential Modifications and Repeals and Revocations) (EU Exit) Regulations 2019, which may further update the reference).”.

The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 20136.

In regulation 2 (interpretation) of the Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 20138, for “as amended by Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019”, substitute “as last amended by Regulation (EU) 2019/2099 of the European Parliament and of the Council of 23 October 2019”.

The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 20177.

In paragraph 1 of Schedule 1 (interpretation of Schedule 1) to the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 20179, in the definition of “the EMIR Regulation”, after “trade repositories” insert “as last amended by Regulation (EU) 2019/2099 of the European Parliament and of the Council of 23 October 2019”.

The Financial Services and Markets Act 2000 (Prospectus) Regulations 20198.

In Part 1 of the Financial Services and Markets Act 2000 (Prospectus) Regulations 201910, after regulation 2 (designation of competent authority), insert—

“Designation of supervisory authority for the purposes of Article 1(6a)(b) of the EU Prospectus Regulation2A.

(1)

The FCA is designated as the “supervisory authority”, under Article 1(6a)(b) of the EU Prospectus Regulation, for the purpose of issuing prior approval of the documents referred to in Article 1(4)(f) and (5)(e) of that Regulation.

(2)

The FCA may issue, under Article 1(6a)(b) of that Regulation, prior approval of the documents referred to in Article 1(4)(f) and (5)(e) of that Regulation.”.

Mike Freer
Rebecca Harris
Two of the Lords Commissioners of Her Majesty’s Treasury
EXPLANATORY NOTE
(This note is not part of the Regulations)

These Regulations are made in exercise of the powers in section 2(2) of the European Communities Act 1972 (c. 68) to implement EU obligations.

Regulations 2, 3 and 5 to 7 make amendments to UK financial services law to update references to Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, such that these include changes made by Regulation (EU) 2019/2099.

Regulation 4 makes an amendment to Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 (S.I. 2001/995) to take into an account an update to the tick-size regime in Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments made by Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms.

Regulation 5 also makes a change to UK financial services law to update a reference to 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, to include amendments made by Regulation (EU) 2019/2089.

Regulation 8 makes an amendment to the Financial Services and Markets Act 2000 (Prospectus) Regulations 2019 (S.I. 2019/1043), providing that the Financial Conduct Authority is the supervisory authority for issuing prior approval of documents for the purposes of exemptions under Article 1(4)(f) and (5)(e) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, as amended by Regulation (EU) 2019/2115.

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.