The Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023

On December 5, 2023, the new Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023 (SI 2023/1313) were published on legislation.gov.uk, the official UK platform for publicizing legal documents. This statutory instrument is related to the implementation of a new special resolution regime for central counterparties (CCPs) outlined in Schedule 11 of the Financial Services and Markets Act 2023 (FSMA 2023) which grants powers to the HM Treasury to use various tools „to mitigate the risk and impact of a CCP failure and the subsequent risks to financial stability and public funds“.
Specifically, the new amendments regulations primarily modify the Companies Act 2006 to make necessary adjustments to enable the Treasury to apply its resolution tools to UK-registered CCPs. This includes, among others,
– the disapplication of the „normal“ takeover rules for instances where the HM Treasury applies its share transfer powers for purposes of CCP resolution and
– the modification of the shareholder rights provisions to modify the notification requirements for shareholder meetings of CCPs under resolution.
They also make necessary adjustment to remove further obstacles to the effectiveness of the new tools and powers of the HM Treasury and make consequential amendments to various other regulations (as outlined above) for example to remove the payment obligation of stamp duty in case of shareholder transfers due to resolution, to disapply certain taxation provisions in cases of resolution, or to grant powers to disclose otherwise prohibited information for purposes of seeking civil suits.
Finally, the regulations apply various provisions of the resolution regime for financial institutions as outlined in the Banking Act 2009 to the resolution regime of CCPs for purposes of regulatory alignment.