The Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018

PART 3 Amendment of the EMIR Regulation

Introduction to amendment of the EMIR Regulation

6.  The EMIR Regulation is amended in accordance with this Part.

Definitions

7.  In Article 2, after point (29) insert—

“(30) ‘third country’ means a country other than the United Kingdom;

(31) ‘working day’ means any day other than—

(a) Saturday or Sunday,

(b) Christmas Day or Good Friday, or

(c) a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom;

(32) ‘FCA’ means the Financial Conduct Authority;

(33) ‘PRA’ means the Prudential Regulation Authority.”.

Recognition of a third country CCP

8.—(1) Article 25 is amended as follows.

(2) In paragraph 1—

(a) for “Union” substitute “United Kingdom”; and

(b) for “ESMA” substitute “the Bank of England”.

(3) In paragraph 2—

(a) before point (a), for the words from the beginning to “paragraph 3,” substitute “The Bank of England”;

(b) in point (a), for “the Commission has adopted an implementing act” substitute “the Treasury has made regulations”; and

(c) in point (d), for the words from “considered” to the end, substitute “a high-risk third country within the meaning of regulation 33 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017(1)”.

(4) Omit paragraph 3.

(5) In paragraph 4—

(a) in the first sub-paragraph, for “ESMA” substitute “the Bank of England”;

(b) in the second sub-paragraph, for “ESMA”, in each place it occurs, substitute “the Bank of England”; and

(c) after the third sub-paragraph insert the following sub-paragraphs—

“Recognition under this Article must be granted only for services or activities linked to clearing and the decision granting recognition must specify the services or activities which the CCP is recognised to provide or perform, including the classes of financial instruments covered by the recognition.

The applicant CCP must, without undue delay, notify the Bank of England of any material changes affecting the condition for recognition in point (b) of paragraph 2.”;

(d) omit the fourth sub-paragraph;

(e) in the fifth sub-paragraph—

(i) for the words from the beginning to “ESMA” substitute “Before the end of the relevant period, the Bank of England”; and

(ii) at the end insert—

“The relevant period is:

(a) where the applicant CCP has submitted an application before the end of the period of 6 months beginning with exit day, the period of one year beginning with the first day on which:

(i) the applicant CCP has submitted a complete application; and

(ii) the conditions in paragraph 2(a) and (c) are met; or

(b) in any other case, the period of 180 working days beginning with the first day on which:

(i) the applicant CCP has submitted a complete application; and

(ii) the conditions in paragraph 2(a) and (c) are met.”; and

(f) in the sixth sub-paragraph, for “ESMA” substitute “The Bank of England”.

(6) After paragraph 4 insert—

“4A.   A CCP must, without undue delay, notify the Bank of England of any material changes affecting the condition for recognition in point (b) of paragraph 2.”.

(7) In paragraph 5—

(a) omit the first and second sentences;

(b) in the third sentence—

(i) for “ESMA” substitute “The Bank of England”; and

(ii) for “that CCP” substitute “a CCP established in a third country”; and

(c) at the end, insert a new sub-paragraph as follows—

“The Bank of England may:

(a) limit the withdrawal to a particular service, activity or class of financial instruments; and

(b) direct that the withdrawal is to have effect subject to such transitional arrangements as the Bank of England considers necessary or expedient.”.

(8) In paragraph 6—

(a) for the words from the beginning to “determining” substitute “The Treasury may by regulations specify”; and

(b) for “third-country legal regimes” substitute “legal regimes of other countries”.

(9) After paragraph 6 insert—

“6A.   The Bank of England may provide advice to the Treasury in connection with any regulations made or to be made by the Treasury under paragraph 6.”.

(10) In paragraph 7—

(a) for “ESMA”, in each place it occurs, substitute “the Bank of England”;

(b) before point (a), for “shall establish” substitute “must take such steps as it considers appropriate to establish”; and

(c) in point (c), for “Union” substitute “United Kingdom”.

(11) In paragraph 8—

(a) in the first sub-paragraph—

(i) for the words “ESMA shall develop draft regulatory technical standards” substitute “the Bank of England may make technical standards”;

(ii) for “ESMA”, in the second place it occurs, substitute “the Bank of England”;

(b) omit the second and third sub-paragraphs.

(12) After paragraph 8 insert—

“9.   This Article is subject to Part 6 of the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018, which contains transitional provisions having effect for the purposes of this Article.

10.   In this Article, “competent authority” means a regulatory authority which is responsible for the authorisation and supervision of central counterparties in its territory.”.

(1)

S.I. 2017/692.