The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023

The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023 were recently published on legislation.gov.uk, the official journal of the United Kingdom. As noted in the title, the regulations make further consequential amendments to other regulations in an effort to transpose the provisions of the Financial Services and Markets Act 2023 and to repeal or replace EU retained law (REUL) so as to enable UK regulators – operating within a framework set by government and Parliament – to implement own rules and regulations suited to the needs of the UK (financial) market.
The new regulations now commence another set of repeals of retained EU law in financial services including – as quoted:
– Article 92b 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;
– legislation relating to Long-Term Investment Funds;
– Part 2 of, and Schedules 1 and 2 to, the Payment Accounts Regulations 2015 (S.I. 2015/2038);
– legislation containing certain restrictions on powers of the Financial Conduct Authority to make rules that modify, amend or revoke retained direct EU legislation.
The regulations also make consequential amendments to other pieces of financial services legislation to ensure that they reflect or are consistent with the noted revocations and repeals which take effect on 1 January 2024. This is necessary to ensure that the UK’s financial services regulatory framework remains coherent and effective.
In addition, the regulations introduce amendments to certain pieces of retained EU law that will apply during the transitional period before they are revoked. This is to ensure that several benefits from the issuance of own UK legislation in view of reducing requirements of financial market participants are being implemented ahead of time. Specifically, the regulations modify the Retained Regulation (EU) No 600/2014 (UK MiFIR) and Retained Regulation (EU) No 648/2012 (UK EMIR) to remove the volume cap mechanism that applies to the trading of equity instruments.
The regulations also apply sections 98 and 101 of the Financial Services (Banking Reform) Act 2013 to the Payment Systems Regulator’s new direction-making power in regulation 4A of the Payment Card Interchange Fee Regulations 2015. This is being done to ensure that the Payment Systems Regulator (PSR) can exercise its new powers effectively and in a way that is coordinated with other regulators.
Finally, the regulations amend the Financial Services Act 2023 to provide clarity over the Bank of England’s reporting obligations in relation to financial market infrastructures.