Draft Financial Services (Miscellaneous Amendments) Regulations 2022

James Murray Excerpts

Tuesday 8th November 2022 General Committees

[James Murray (Ealing North) (Lab/Co-op)]

Thank you, Mr Robertson, and it is a pleasure to serve under your chairship.

As we have heard, the regulations concern miscellaneous amendments to the financial services regulations, and are made to address deficiencies in retained EU law arising from the United Kingdom’s withdrawal from the EU. The delegated legislation is technical in nature, and seeks to correct a “deficiency” through regulation 2, and to extend post-Brexit temporary recognition arrangements through regulations 3 and 4. The latter regulations relate to the requirement for institutional investors to carry out specific due diligence prior to investing in EU simple, transparent and standardised, or STS, securitisations. They will extend the exemption from the clearing obligation in relation to EU STS securitisations to those notified prior to 11 pm on 31 December 2024. That will ensure consistent treatment for EU STS securitisations notified before that date.

Regulation 2 of the instrument ensures that the Treasury and the FCA will be able to apply their powers through certain regulations to Gibraltarian firms in the UK financial services market. As we know, the Treasury has made a number of amendments to regulations since 2019 in attempting to ensure that the UK-Gibraltar regulatory framework for financial services continues to operate smoothly. Regulatory changes in the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 transferred powers from the EU to the Treasury and the FCA. Although the amendments made in 2019 caused the EU to cease having any regulatory oversight of Gibraltar, the regulations did not fully transfer all of the necessary powers and functions to the Treasury and the FCA that they should have done.

Clearly, the SI before us seeks to remedy the Government’s error. It is important that the financial services regulatory framework concerning UK-Gibraltar market access and oversight runs smoothly, so the Opposition will not oppose the measure.