UK Government
UK Free Trade Agreement with Iceland, Norway and Liechtenstein - UK Government publishes full text and supporting documents - 16 July 2021
The Department for International Trade has published the full text of the free trade agreement (FTA) between the UK and Iceland, Norway and Liechtenstein (EEA EFTA states), as well as supporting documents. The publication follows the announcement of the signing of the agreement on 8 July 2021, as previously reported in this Bulletin. Among other things, the FTA includes three joint declarations adopted by the parties, one of which is on financial services and affirms the intention of the parties to “support financial services market access through deference arrangements at each Party’s discretion”, including, but not limited to, equivalence decisions.
Free Trade Agreement between the UK, Norway, Iceland and Liechtenstein: Volume 1 (main text)
Free Trade Agreement between the UK, Norway, Iceland and Liechtenstein: Volume 2 (annexes and appendices)
Explanatory memorandum
Joint declaration: UK-Norway, Iceland and Liechtenstein FTA: Financial services
Parliamentary report
Parliamentary report summary
Parliamentary report webpage
HM Treasury
Draft statutory instrument - The Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021 - 19 July 2021
HM Treasury has published the draft Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021, together with an explanatory memorandum and impact assessment.
The Regulations: (i) address deficiencies in the retained EU law version of the Markets in Financial Instruments Regulation ((EU) 600/2014) in relation to the non-discriminatory access regime for exchange-traded derivatives, which requires trading venues and central counterparties to grant each other non-discriminatory access; (ii) amend the low carbon benchmarks regime that sets out requirements and voluntary standards for benchmark administrators under the retained EU law version of the Benchmarks Regulation ((EU) 2016/1011); and (iii) make technical amendments to certain exemptions in the FSMA (Financial Promotion) Order 2005 (SI 2005/1529) to ensure that the definition of ‘relevant markets’ includes ‘UK markets’ following the UK’s departure from the EU.
The Regulations will come into force on 13 October 2021.
The draft Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021
Explanatory memorandum
Impact assessment
Webpage
Financial Conduct Authority
UK PRIIPs - FCA publishes consultation paper on post-Brexit divergence - 20 July 2021
The FCA has published a consultation paper (CP21/23) containing proposals on changes to the disclosure documents provided to retail investors under the retained EU law version of the Packaged Retail and Insurance-based Investment Products Regulation (1286/2014) (UK PRIIPs). The aim of the changes is to provide more clarity to investors on the nature of PRIIPs, the risks and further information on likely future performance.
The FCA’s proposals include:
- the introduction of rules to clarify the scope of the PRIIPs Regulation in relation to corporate bonds, making it clearer that certain common features of these instruments do not make them into PRIIPs;
- the introduction of interpretative guidance to clarify what it means for a PRIIP to be ‘made available’ to investors; and
- amendments to the PRIIPs regulatory technical standards (RTS) to: (i) replace the requirement of performance scenarios in the key information document (KID) with a requirement for narrative information on performance; (ii) address the potential for some PRIIPs to be assigned an inappropriately low summary risk indicator in the KID; and (iii) address concerns pertaining certain applications of the slippage methodology when calculating transaction costs.
The proposed changes will be included in the FCA Handbook in a new ‘Product Disclosure’ sourcebook, and revisions to the PRIIPs RTS.
The consultation closes on 30 September 2021. The FCA plans to make final rules and amend the PRIIPs RTS by the end of 2021, which will take effect on 1 January 2022.
Consultation paper: PRIIPs – Proposed scope rules and amendments to Regulatory Technical Standards (CP21/23)
Response form
Webpage
Press release
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Non-enforcement of financial promotion breaches - FCA publishes statement - 21 July 2021
The FCA has published a statement with information for firms that use certain exemptions to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (FPO) concerning communications relating to relevant UK markets.
As a result of changes to the FPO made during the Brexit onshoring process, the definition of ‘relevant market’ used in the FPO inadvertently no longer includes relevant UK markets. As a result, the exemptions under article 37, 41, 67, 68 and 69 of the FPO do not cover financial promotions relating to relevant UK markets or investments traded on such markets.
See item above for the draft version of the SI that will correct this error, the Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021, published on 20 July 2021. HM Treasury intends for the SI to come into force on 13 October 2021.
The FCA confirms that, until the date the SI comes into force, it does not propose to take enforcement action against persons for breach of the financial promotion restriction if the breach only arises because the relevant exemption no longer applies because of this error. The FCA reserves the right to pursue enforcement action where there is misconduct by an affected person that goes beyond a failure to meet the criteria for exemption.
Statement: Information for firms who use certain exemptions to the Financial Promotions Order
