Under the European Union (Withdrawal) Act 2018—which aims, inter alia, to incorporate into U.K. law all applicable E.U. legislation and to give powers to Ministers to make such amendments to retained law as are necessary to deal with any deficiencies arising from withdrawal—HM Treasury has begun to publish drafts of statutory instruments (“SIs”) which will “onshore” E.U. legislation related to the financial markets. This paper considers legal uncertainties arising from the changes proposed by the draft Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (the “draft BRR SI”) which amends the Banking Act 2009 as well as other pieces of U.K. legislation to create an amended legislative framework for bank recovery and resolution after Brexit.
The FMLC has highlighted legal uncertainties including those related to: (1) cooperation arrangements; (2) the recognition of English law instruments; (3) references to other legislation; and (4) the loss of protections owed in relation to the functioning of CCPs. In view of the substantial work which has evidently gone into drafting the SI, the FMLC is certain that HM Treasury has already taken into account both the drafting and policy issues highlighted above. The FMLC would, nevertheless, encourage HM Treasury and HM Government to publish, wherever possible, guidance which might enable impacted firms and institutions to begin planning for the future.
The paper was sent to HM Treasury with a covering letter in which the FMLC drew attention to another issue of legal uncertainty which will arise in relation to bank recovery and resolution in a "no deal" Brexit but which does not arise directly from the draft BRR SI. The letter too is available for download below.
Paper—available as: PDF
Letter—available as: PDF