European Union: Bank Of England And UK Prudential Regulator Consult On Approach To Onshoring EU Financial Services Legislation For Brexit

On October 25, 2018, the BoE and the U.K. PRA launched a joint consultation paper entitled "The Bank of England's approach to amending financial services legislation under the European Union (Withdrawal) Act 2018." The consultation forms part of a package of consultations, "Dear CEO" letters and other communications published by the BoE and the PRA on October 25, 2018. The consultation covers:

  1. How the BoE and the PRA propose to use their delegated power, under the Financial Regulators' Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018, to address deficiencies in the PRA Rulebook and to make any necessary amendments to the Binding Technical Standards which comprise "level 2" of the EU financial services legislation that will be onshored.
  2. How the BoE and PRA propose to use the new "temporary transitional power" to grant temporary transitional relief where requirements have been introduced or have changed as a result of onshoring. HM Treasury proposes to legislate to grant the regulators this power, for use in the event of a "no deal" scenario, and set out further details of its approach on October 8, 2018.
  3. How the BoE and PRA propose to treat the existing body "level 3" Guidelines and Recommendations on Brexit.

This consultation on the BoE's and PRA's general approach provides background for, and should be read in conjunction with, the other consultation papers that form part of the package of consultations and communications on Brexit preparations. The proposals in the consultation paper are relevant to:

  • all firms authorized and regulated by the PRA;
  • EEA firms undertaking cross-border activities into the U.K. from the rest of the EU;
  • U.K. FMIs regulated by the BoE; and
  • non-U.K. CCPs and non-U.K. Central Securities Depositories providing cross-border services into the U.K.

Some notable elements of the consultation are highlighted below.

Temporary transitional power

The temporary transitional power to be introduced by HM Treasury will be available to be used by regulators in respect of any onshoring changes that affect firms' and FMIs' obligations. Relief will be able to be granted for up to two years after exit day. In the consultation paper, the BoE and PRA confirm that they propose to use the power broadly and provide the following five examples demonstrating how they intend to use the power to delay the application of onshoring changes that would otherwise require firms and FMIs to take action before exit day to comply with the changes:

  1. Firms and FMIs that are subject to U.K. laws would be able to continue to treat EU27 exposures and assets preferentially for the purposes of capital requirements, liquidity and large exposures regimes.
  2. Reporting and disclosure of regulatory data would be on the same basis as before exit day.
  3. U.K. groups that are part of EEA-headquartered banking groups would not need to comply with consolidated liquidity requirements at U.K. level.
  4. Where Brexit results in new U.K. sub-groups, if HM Treasury relieves the PRA of its obligation to exercise group supervision at the level of the U.K. sub-group, then EEA-headquartered insurance groups would not need to calculate or report consolidated capital requirements at the U.K. sub-group level.
  5. Credit unions would be able to continue to place deposits with EEA credit institutions.

The PRA has so far identified three areas where it would not propose to exercise the temporary transitional power, on the basis that to do so may undermine its statutory objectives. The areas are: (i) contractual recognition of bail-in rules; (ii) contractual agreement to resolution stays on termination provisions; and (iii) Financial Services Compensation Scheme protection.

Treatment of Level 3 materials

The BoE and the PRA have prepared a draft Statement of Policy on future compliance with the body of "Level 3" Guidelines and Recommendations that have been prepared by the European Supervisory Authorities. The draft Statement of Policy includes a non-exhaustive list of Guidelines that are currently complied with in the U.K. The BoE and PRA do not propose to reproduce or amend the content of existing Guidelines and Recommendations before exit day. The BoE and PRA expect firms and FMIs to continue to comply after exit day with Guidelines that are currently complied with and should interpret them in light of Brexit, onshoring changes and any transitional relief.

If new Guidelines and Recommendations are made by EU authorities, or changes are made to existing material, these will not automatically apply on Brexit. The BoE and PRA will consider their approach and may issue further statements in such cases.

Comments on the consultation are invited by January 2, 2019. The proposed changes will only take effect on exit day in a "no-deal" scenario, in which the U.K. exits the EU on March 29, 2019 without a transitional period agreed between the U.K. and the EU as part of a Withdrawal Agreement. If there is a transitional period, it is expected that the changes would take effect at the end of that period.

The joint BoE/PRA consultation paper is available at:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions