John Glen
MP for Salisbury · Conservative · United Kingdom
“I welcome the Chief Secretary to her new position, but what words of comfort could she give the residents of Salisbury in Wiltshire, a unitary authority? We are not part of a combined authority and we do not have a metro mayor.”
“Sam Moody is my constituent. He is the chief executive of Rockhopper. During my time in this House, he has been absolutely scrupulous in following the laws of this country and respecting the Falkland Islanders.”
“I listened carefully to what the Minister said about the process, and I respect that. But most people who take a pretty level-headed, pragmatic view of the need for a transition over time still cannot get their heads around the short-term reality: when we have so much turmoil in the middle east, why would we extend the time that we are no…”
“It is 55 days till the Budget. Given the market’s reaction to the Prime Minister’s statement on Tuesday, and given that our gilt rates are higher than those of our peers in the G7, could we have a debate on the implications of higher taxes for growth?”
“Before the hon. Lady makes her statement on Thursday, will she, when reflecting on the arrangement in Wiltshire that would embrace Wessex—although we have been told that that is not the Government’s view—address the prevailing concern that the people of rural Wiltshire will be considerably worse off without having the opportunity to embra…”
“I recognise that the Minister wants to come to what the Government are going to do, but does he not accept that the decisions already made in the last two years—with respect to the price of employment and the national living wage, the cost of employment with regard to legislation, and business rates—have depressed the appetite of many sma…”
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“I beg to move, That the Committee has considered the draft Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2018. May I say what a pleasure it is to serve under your chairmanship this morning, Ms McDonagh? As the Committee will be aware, the Treasury has been undertaking a programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period, there will continue to be a functioning legislative and regulatory regime for financial services in the United Kingdom. To deliver that, the Treasury is laying statutory instruments under the European Union (Withdrawal) Act 2018, several of which have already been debated in both Houses, with plenty more to come—we have another tomorrow afternoon. The draft regulations are part of that programme.”
“The Home Office leads on the resourcing of the FIU and the SARs reform work, so I am not able to give a detailed answer, but shall write to the hon. Member for Oxford East.”
“I am not able to give chapter and verse on specific mechanisms, but it is important to remind the Committee that the UK is known as a world leader in setting the agenda in this area and it is inconceivable that the Government would not wish to continue to take a lead in driving forward these standards. Obviously in a no-deal scenario, work would have to take place to establish how the FCA’s relationship with the EU would work, in the context of a thorough and holistic piece of legislation on financial services. The Treasury, working across Government with the Home Office and the Ministry of Justice, takes its responsibilities in this area very seriously. I gave evidence to the Treasury Committee’s inquiry on economic crime and we look forward to its report, which will guide us and to which we will respond.”
“9MC.] The Department for Business, Energy and Industrial Strategy, which leads on this area, published a report in December that set out a series of elements, including tighter regulation, the need for a firmer connection to the UK, increased transparency of information and giving the registrar the power to strike off dormant partnerships. I accept that there is work to be done, but progress is being made. The hon. Members for Oxford East and for Aberdeen North raised the issue of co-operation with the EU. Paragraph 84 of the political declaration explicitly sets out that the UK and the EU should co-operate on anti-money laundering.”
“Lady also raised the Financial Action Task Force and its recommendations, and I will come on to some of those around the resourcing of the FIU. However, it is important for the Committee to understand that the comprehensive review of the UK regime that took place last year, which is done on a 10-year basis, judged the UK to be in the best state of all 60 countries that have been evaluated. However, I acknowledge that there are pieces of work that need to be undertaken to improve it. There has been an 80% reduction in Scottish limited partnerships. [Official Report, 17 January 2019; Vol. 652, c.”
“It is a pleasure to respond to the hon. Members for Oxford East and for Aberdeen North, who raised a series of thoughtful questions. I have to say at the outset that the draft regulations are about creating the functioning regime that we will need in a no-deal situation. A whole range of points that were raised were discussed during the passage of the Sanctions and Anti-Money Laundering Act 2018, but I will seek to respond to them. The hon. Member for Oxford East raised concerns about the EU’s high-risk third country list. I can confirm that we will use the Sanctions and Anti-Money Laundering Act to update the high-risk register. We will use the affirmative procedure, which will enable Parliament to vote on any changes. International standards will be considered as part of any updates. The hon.”
“Member for Oxford East mentioned the concerns raised by the Thames Valley police and crime commissioner. He has also raised them with me and I will get in touch with him about them. Obviously, we do not rest on our laurels with respect to the FATF evaluation. I have mentioned the concerns that the Government have acknowledged in terms of the FIU, and the improvements to SARs and to the Companies House register, on which we expect a Government report in Q1 or Q2 of this year. The statutory instrument is needed to ensure that the UK’s anti-money laundering and counter-terrorism financing regime operates effectively and that the legislation functions appropriately if the UK leaves without a deal. I hope that I have adequately responded to the points raised.”
“A check would be done on that, but because that sort of transaction is inherently risky, the same degree of checking will need to take place—and does take place in practice in the banking industry—with countries in the EU that are more familiar to us. Broadly, there is harmony on that matter anyway. I mentioned the SARs reform, which the Home Office leads on. We anticipate that new IT will provide a more user-friendly portal for reporters from all sectors and that improved data processing, storage, analytics and distribution will be required. Work is being done across the Treasury, the Home Office and the MOJ to look at how we can refine that. [Official Report, 17 January 2019; Vol. 652, c. 10MC .] At the moment, the basic problem is that there is a high volume of SARs and we could better interrogate that data pool. The hon.”
“To expand further on future co-operation, through the bilateral agreement with the EU, we expect to have an expansive relationship that would have a wide scope of cross-border activity. The changes in the SIs do not preclude deep co-operation between UK and EU regulators in the future. It is desirable to have that co-operation. The hon. Member for Aberdeen North raised the burden on banks’ IT systems. When one makes a transfer between one bank and another, if it is in an unfamiliar, non-mainstream destination in Africa—I will not name an individual country for fear of getting a letter from its ambassador—some checks would be done, because the bank would then obviously receive those funds.”
“This programme of SIs is about getting to the basic starting point that allows us to have confidence in the regulatory regime, but I do not deny that a considerable amount of work would need to take place. On maintenance of standards and equivalence with the EU on anti-money laundering, the hon. Member for Oxford East discussed the use of the word “may” versus “must”. I want to clarify that what we have removed is the obligation to report in a specific way, as per the legislation. It is not our intention to remove ourselves from either the spirit or substance of that obligation; it is just that it would be inappropriate to leave a legal obligation to an entity when we are a third party. That is the only way that I can describe it.”
“I would be happy to respond on that matter as well. A point that often comes up in these discussions is the resourcing of the FCA. I acknowledge the great work that it has done over the last 18 months in helping the Government to prepare these SIs. It is funded by an industry levy and has set out in its business plan the resources involved in working towards exit. The Government are confident that the FCA has made adequate preparations ahead of leaving. If additional resources are needed in the event of no deal, it would be able to raise those funds very quickly, but we would all be in a situation where we would have to do things that we had not anticipated.”
“My colleague the Chief Secretary has set out comprehensive budgets for each Department for the financial year with respect to a no deal, and a process for urgent requests. The FCA would be able to raise its levy autonomously and separately from Government. It will have contingency arrangements for doing that quickly. I obviously cannot address all Government agencies and Departments, because it will be done through different Ministers in different Departments, but I can say that the Treasury has fully communicated the process for making additional requests in a no-deal situation to all Ministers in all Departments.”
“If I take the Department for Education, for example, where a large portion of the budget is for providing food in schools, in a no-deal circumstance where additional costs might be associated with that food, the Minister would need to make a statement to Parliament about that and respond to it. Inherently in the process, there is a mechanism for the Government and different Departments to bring matters to Parliament. They would need to justify where they would spend that additional money and the basis for it. With respect, I think that is beyond the scope of the statutory instrument—at least, that is my judgment.”
“I am sorry for that. I hope the Committee has found the debate informative and will now be able to support the regulations. Question put and agreed to. Resolved, That the Committee has considered the draft Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2018.”
“I have been consistently clear that it is vital that we get the right processes and procedures in place, to ensure that SMEs can obtain fair redress and resolve disputes with their banks.”
“Those concerns have certainly been heard, and I am pleased to announce that Lloyds has agreed with the FCA that Lloyds will commission a post-completion review to quality-assure the methodology and process of the Griggs scheme. [ Interruption. ] Overseen by an independent person, that review will go above and beyond a normal lessons-learned exercise. The independence of the person appointed to lead the review is vital. In particular, I would expect that person not to have been employed by Lloyds in any way, and to be able to demonstrate complete operational independence from Lloyds. I am pleased that Lloyds has committed to publishing the review once it has concluded, and I welcome Lloyds’ commitment to implementing any recommendations it produces.”
“In addition, Lloyds Banking Group has appointed Dame Linda Dobbs, a retired High Court judge, as an independent legal expert to consider whether issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time by Lloyds Banking Group, following its acquisition of HBOS. It will consider issues raised by the Project Lord Turnbull report referred to by my hon. Friend. Dame Linda’s findings will then be shared with the FCA. It is right that Lloyds set up a compensation scheme for businesses affected by the events at HBOS Reading, overseen by Professor Russel Griggs. That scheme has seen offers made to all customers within its scope, with 90% of customers accepting the offer. However, I acknowledge the concerns that Members have raised about the Griggs scheme.”
“However, I recognise that there has been a great deal of justified anger, within Parliament and beyond, regarding the fraud that was perpetrated against small businesses through the actions of individuals at the HBOS Reading branch. It is important to remember that the events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice, as my hon. Friend the Member for Thirsk and Malton pointed out. The FCA continues to conduct an enforcement investigation into the events surrounding the discovery of misconduct at HBOS Reading, resuming an investigation placed on hold at the request of Thames Valley police. I will be keenly following the progress and outcome of the investigation.”
“Before I address the substance of today’s debate, it is important that we pause for a moment to recognise the contribution that banks make to both the UK economy and our society. As the hon. Member for Aberdeen North (Kirsty Blackman) rightly said, it is necessary for banks to lend to SMEs. Lloyds Banking Group has, for example, increased its net lending to SMEs by £3 billion since 2014 and plans to triple that by 2020. Lloyds is the market leader in providing basic bank accounts, which help vulnerable customers, and its “Helping Britain Prosper” plan sets out a number of commitments on behaviour, diversity and charitable support.”
“I am conscious that many of the eight Back-Bench Members who have taken part in this debate will have heard sad and unfortunate stories from their constituents about how the actions of banks have affected them and their businesses. That includes not only the events at HBOS Reading, but the actions of the RBS Global Restructuring Group and the mis-selling of interest rate hedging products. I begin by reminding Members that we expect the highest standards of behaviour across the financial sector. That is why the Government have introduced a number of necessary changes to restore public trust in financial services, such as the senior managers and certification regime.”
“It is a pleasure to serve under your chairmanship, Sir Christopher. I acknowledge the work of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in securing this debate and making an excellent speech, as he has done on several occasions this year in this place, and setting out a case that was well reasoned in many elements. I also pay tribute to the hon. Members for Strangford (Jim Shannon) and for East Lothian (Martin Whitfield), who made fine contributions to the debate. As we have heard today and in previous debates this year, incidents of banking misconduct and fraud have had a severe impact on some small and medium-sized enterprises. It has been and remains a top priority of mine in office to face up to the issues that have been generated by the cases that have been raised.”
“I understand the concerns, but it is a significant step forward that that review will take place, and I will monitor the implementation of both the expanded FOS remit and the industry’s independent voluntary ombudsman schemes. I am confident that we have the right regulatory regime and dispute resolution mechanisms in place for the future. Events similar to those at HBOS Reading should not occur again, and I will do everything in my power in office to ensure that we learn the lessons from those appalling incidents years ago.”
“The all-party group on fair business banking and finance has been a key part of that work, and I sincerely commend its determination in the work that it has undertaken to ensure that SMEs are fairly treated. The events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice. However, more clearly needs to be done to restore SMEs’ trust in the financial services industry. From the numerous meetings that I have had this year with a wide range of stakeholders, it is clear that we are all determined to deliver the best outcomes for SMEs. I will closely follow the review of the Griggs scheme.”
“I believe that a tribunal, on the other hand, would need the regulation of SME lending, potentially restricting SMEs’ access to credit. It would still require SMEs to pay for expensive legal expertise, and it could make decisions only on a strict legal basis. That is why I believe that an expanded FOS remit, alongside the establishment of further independent ombudsman schemes as announced by UK Finance, will ensure the best outcomes for SMEs. I highlight again that the Government, financial regulators and industry have done considerable work to tackle bad practice and to ensure that SMEs have access to appropriate dispute resolution and redress mechanisms.”
“Independence, expertise, transparency and the right to an appeal are all hallmarks of a fair and robust process, and it is right that they underpin any approach to dispute resolution. I welcome the banking industry’s commitment to having those schemes up and running by September 2019. I look forward to seeing progress on establishing the implementation steering group very soon, and I am pleased that representatives from the all-party parliamentary group will have a role in that process. The benefits of an ombudsman-style approach are clear, but I recognise that some hon. Members have advocated again today for the establishment of a tribunal to resolve disputes between banks and SMEs. An ombudsman-style approach can deliver fast, free and fair dispute resolution for SMEs, making decisions based on what is fair and reasonable.”
“Members who have voiced concerns about the capability of the FOS. I have also been clear that banks need to work hard to restore businesses’ trust in their institutions. That is why I welcome the banking industry’s recent commitment to establishing two independent voluntary ombudsman schemes, in response to Simon Walker’s review of dispute resolution for SMEs. One of those schemes will address complaints from SMEs with a turnover of £6.5 million to £10 million. The other will address unresolved historical complaints from SMEs that have not already been through a formal process. I am pleased that the banking industry has set out the key principles for the operation of the scheme to address unresolved historical complaints.”
“Expanding the remit of the FOS will ensure that from 1 April 2019 well over 99% of all UK businesses will have access to fast, free and fair dispute resolution. I am aware that concerns have been raised about the capability of the FOS to adjudicate effectively in such cases, and I discussed those concerns with the Chair of the Treasury Committee just last week. The FOS has announced its plans to create a ring-fenced, specialist unit to take on the additional cases, and for that unit to be supported by a panel of external SME experts. I welcome those plans, and I will visit the FOS early in the new year to check on how they are progressing. The FCA has also committed to reviewing the expansion of the FOS remit within two years of its coming into force, in addition to its usual oversight processes. I trust that that will reassure some hon.”
“I will happily meet my right hon. Friend—a distinguished former Minister who has been fighting on these matters for many years—and my hon. Friend the Member for Thirsk and Malton. Of course I acknowledge the cynicism and concern of those present about the independence of this mechanism, but, as I said, Lloyds has committed to publishing the independent review once it is concluded and implementing any recommendations that it produces. My officials have been working with the FCA to ensure that that comes to pass. I take the concerns about how it progresses very seriously, and will happily meet Members to discuss them. In the recent Budget, the Chancellor stated the Government’s support for the FCA’s plans to expand eligibility to complain to the Financial Ombudsman Service to small businesses as well as micro-enterprises.”
“To be clear, the intention in granting the temporary powers is to enable the FCA to operate the transparency regime in the UK from exit day and beyond.”
“The FCA will also need to consider market movements in the immediate aftermath of the UK’s exit from the EU before it can estimate an equilibrium on which to base certain adjustments to the UK’s transparency regime. Accordingly, the FCA’s powers will include the ability to freeze certain pre-exit-day transparency calibrations, so that they have continued binding effect on exit day and for a period thereafter, until such time as the FCA can collect and produce its own data. The FCA will also have temporary powers to suspend certain transparency provisions during the transitional period. For instance, it will have the power to stop the dark trading of shares, to ensure that such dark trading does not unduly harm price formation in UK markets.”
“The instrument therefore grants the Financial Conduct Authority new flexibilities and a set of temporary powers, which will last for a period of up to a maximum of four years from exit day, to address certain operational difficulties that the FCA may face after exit. The powers will allow the FCA some controlled flexibility over how the MiFID II transparency regime is operated. The FCA’s temporary powers are required because the FCA will not be immediately ready on exit day to operate the transparency regime independently. One challenge facing the FCA is that it does not at present collect all the data that it will require to operate the transparency system on exit day. The FCA will need time to build appropriate IT systems to collect the data required to operate the transparency regime.”
“One feature of MiFID II is that it requires buyers and sellers on financial markets to disclose data, such as price and volume information for their trades, to bring transparency to the process of price formation in financial markets. Exemptions from those requirements are available in several cases, and formulae are used to calculate whether a trade may fall under an exemption. They are generally specified by reference to a proportion of pan-EU trading data. However, in a no-deal scenario, the UK may no longer have access to the pan-EU data that the European Securities and Markets Authority uses to calculate the appropriate thresholds. Calculating those thresholds at a UK-only level may create different thresholds in the UK and the EU. That may create opportunities for regulatory arbitrage and market disruption.”
“The approach taken in the legislation aligns with that of other SIs being laid before Parliament under the European Union (Withdrawal) Act 2018: it provides continuity by maintaining existing legislation at the point of exit, but amending deficiencies where necessary and introducing transitional provisions to ensure that it works effectively in a no-deal context. MiFID II is a significant set of EU legislation that regulates the buying, selling and organised trading of shares, bonds and more complex financial instruments. It governs the practices of investment firms, exchanges and portfolio managers among others, and came into effect across the EU on 3 January 2018.”
“The regulations address legal deficiencies in the EU markets in financial instruments regulation and its accompanying directive; in the UK legislation implementing the directive; in other related domestic financial services legislation; and in EU delegated regulations. I will refer to those collectively as MiFID II. The instrument is extremely important for the financial services sector, as without it, essential components of financial services legislation would become inoperable, should the UK leave the EU without a deal.”
“I beg to move, That the Committee has considered the draft Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018. May I say what a pleasure it is to serve under your chairmanship, Mr Sharma? The Treasury has been undertaking a programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying before Parliament statutory instruments under the European Union (Withdrawal) Act 2018 to deliver that, and several of them have already been debated in this place, and in the House of Lords. The SI being debated today is part of that programme. It was debated in the House of Lords on 28 November.”
“The hon. Lady is absolutely right to draw attention to the significant resources that will be required. The FCA has been in conversation with my officials in the Treasury, and we are reassured that it is in a position to do the work, and that it can do so under the provisions of the levy that it has.”
“This SI onshores the existing MiFID II regime under the terms of the European Union (Withdrawal) Act 2018. Circumstances that the Government do not wish for—no deal—would clearly necessitate additional legislation in the next Session. I am working with officials to develop that legislation, so that we would maintain the most competitive regime possible in a no-deal situation, but that falls without the scope of this statutory instrument.”
“If the Treasury is satisfied that the FCA is ready to undertake its transparency functions, the four-year transitional period may be ended earlier by the Treasury by the issue of a direction that must be laid before both Houses and published. Some longer-term flexibility will also be given to the FCA to reflect the fact that it may not have access to pan-EU trading data after exit, and therefore may need to use reliable trading data from other countries when calculating certain transparency thresholds.”
“In a no-deal situation, there will be a variety of scenarios with respect to the nature of our relationship with the EU; the calibration of our long-term competitive regime for financial services would depend on the calibration of that relationship, and legislation would be brought forward in the light of that. I will make progress. To be clear, the intention in granting these temporary powers is to enable the FCA to operate the transparency regime in the UK from exit day and beyond, and to maintain existing outcomes, as far as that is reasonably possible. The 2018 Act does not empower the Government to make non-deficiency-related policy changes to EU legislation.”
“Another important set of revisions concerns the treatment of third-country regimes. Under MiFID II, certain elements of a third country’s regulatory and supervisory regime may be deemed by the European Commission to be equivalent to the requirements of MiFID. For example, under MiFID II, trading in certain instruments must take place on recognised markets. If a third country is deemed equivalent for that purpose, MiFID II allows trading to take place on those third-country markets. To ensure that the MiFID II equivalence regimes can continue to operate effectively in the UK after exit, the Treasury will take on the European Commission’s function of making equivalence decisions for third country regimes. Existing Commission equivalence decisions are also incorporated into UK law so they will continue to apply to those third countries.”
“That is consistent with the approach set out in the Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018, which were debated in this House on 10 October 2018. This instrument also deletes provisions in retained EU law that would become redundant when the UK leaves the EU, such as requirements regarding automatic recognition of an action by an EU body, and other references to EU bodies and EU member states. In line with the Government’s overall approach, this instrument removes obligations on UK authorities to co-operate and share information with European economic area authorities, although this does not preclude UK authorities from co-operating and sharing information with EEA authorities on a discretionary basis.”
“I turn to the other issues in this instrument. Currently, certain regulatory functions under MiFID II are carried out by EU authorities—principally, the European Commission and the European Securities and Markets Authority. The Commission and ESMA will, naturally, have no mandate to carry out these functions once the UK leaves the EU. Therefore, this instrument transfers the functions of the Commission to the Treasury and ESMA’s functions to the FCA and the Bank of England. It also transfers responsibility for making binding technical standards that specify the detailed regulations that firms must abide by from ESMA to the FCA, the Bank of England or the Prudential Regulation Authority.”
“In a no-deal scenario, it is important that the Treasury is able to manage negotiations with international partners effectively. This objection mechanism is a sensible way of ensuring that. Parliament will, of course, be able to scrutinise and question Treasury Ministers and the FCA further on their approach to the temporary powers—for example, through the Select Committee system—as Parliament does now. The SLSC report also noted that it would have been helpful if the FCA’s policy statement on the use of these powers had been made available to the House before this debate. That has not been possible, given the time the FCA needs to consider the drafting of such a statement. However, the FCA has provided assurance that a statement of policy will be ready at least four weeks before exit if the UK leaves the EU without a deal.”
“It is clearly important that the regulators be adequately resourced to deal with the impact of the UK’s withdrawal from the EU. I reiterate that I have full confidence that the FCA has the expertise required to run an effective transparency regime in the UK, irrespective of the outcome of the negotiations with the EU. The FCA will also publish a statement of policy about how the temporary powers will be used before exit day. That statement of policy and any subsequent changes to it will come into effect only if the Treasury does not raise an objection to it on specified grounds. The Treasury may object to an FCA statement if it would potentially prejudice an international agreement that the UK hoped to reach, or if the Treasury believes that it may lead to a breach in international obligations.”
“We have been working closely with the FCA for several months since the SI was published on 5 October. The FCA has discretion to increase its levy if it needs additional resources. That is not something it has communicated to us up to this point, but we have an active, ongoing weekly dialogue. That is a matter for it to bring forward in due course if necessary. The report of the Secondary Legislation Scrutiny Committee, Sub-Committee B, which was published on 1 November, focused primarily on the transparency regime. It mentioned the adequacy of resourcing for the FCA to carry out its new responsibilities—an issue that has already been raised. The Treasury has been working closely with the FCA to deliver the programme of legislation.”
“To conclude, the Government believe that it is necessary to ensure that MiFID II continues to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope that colleagues will join me in supporting the draft regulations. I commend them to the Committee.”
“In addition, this instrument provides that firms must continue to report on trades in financial instruments admitted to trading, or traded, on trading venues in the UK and in the EU. That will maintain the existing scope for the monitoring of markets by the FCA and will minimise disruption and adjustment costs for firms. The Treasury has been working closely with the FCA, the Bank of England and industry bodies—representing large and small firms—in the drafting of these regulations. The Treasury published the instrument in draft, along with an explanatory policy note, on 5 October 2018 to maximise transparency to Parliament, industry and the public, ahead of laying it before Parliament. Regulators and industry bodies have generally been supportive of the provisions in this SI.”
“This instrument will also put in place transitional arrangements for data reporting service providers, which are entities that report details of transactions to regulators and publish information under the transparency regime. Finally, under the transaction reporting regime in MiFID II, investment firms are required to submit a report to their national regulatory authorities following the execution of a trade. Those transaction reports are used by regulators to detect and prevent market abuse. UK branches of EEA firms do not send reports to the FCA, but rather send them to their home regulator, which can then share them between EU regulators. As we will no longer be part of that system, the draft regulations will require UK branches of EEA firms to report to the FCA, in the same way that UK branches of non-EEA firms are required to do.”
“This instrument makes special provisions for EEA firms that intend to operate in the UK under the temporary permissions regime by ensuring that they will not be deemed in breach of the UK’s MiFID II rules if they can demonstrate that they comply with corresponding provisions in the EU’s MiFID II rules. This is necessary because, in the absence of such provisions, legal conflicts could arise that may impede the activities of firms operating under the temporary permissions regime in the UK in certain areas, and that may require them to comply with duplicative regulations. This provision will apply only to certain provisions of MiFID II during the temporary permissions regime, and only where the EEA MiFID II requirement has equivalent effect to the UK MiFID II requirement.”
“Absolutely. I can confirm that those skills exist. New equivalence decisions issued by the Treasury will be laid before Parliament and will be scrutinisable. To provide as much certainty to business as possible, the Government have introduced a temporary permissions regime, as set out in the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018, which were made on 6 November. That will enable relevant EEA firms operating in the UK through a passport to continue their activities in the UK for a limited period after exit day, and will allow them to apply for UK authorisation, or transfer business to a UK entity, as necessary.”