The week in outline:
This week saw the publication of another mass of financial services (FS) related material as part of the UK’s preparations in case the UK exits the EU without the Withdrawal Agreement (WA) and the proposed Transitional Period (TP) (‘no-deal’).(i.e. The no-deal regime, which would take effect at 11.00 pm UK time on Friday 29th March next year, is based on the onshored version of retained EU law/regulation, as modified under section 8 of the European Union (Withdrawal) Act 2018 (EUWA), a process sometimes referred to as Nationalising the Acquis (NtA).
In the past few weeks, HMT and UK regulators have published over 2000 pages of material about the NtA regime. This week HM Treasury (HMT) published another 6 NtA statutory instruments (SIs) (see Documents 3 to 8 below) and, following on from 900 pages of NtA material from the FCA two weeks ago (see our update for the week ending 12 October 2018), the Bank of England and the PRA published a raft of NtA material comprising 7 separate Dear CEO letters/consultation papers (see Documents 2.1 to 2.7 below).
Our RegZone database of NtA instruments now lists 25 SIs being promulgated by HMT and tracks their current status (draft awaited, draft published, laid before Parliament and enacted). The database also includes the draft NtA instruments (relating to rulebook changes and the modification of the onshored version of EU binding technical standards) which have been published by the UK regulators.
HMT SIs are being made pursuant to section 8 EUWA, under either the negative resolution or affirmative resolution procedure (see our update for the week ending 19th October 2018 here). The NtA SIs include temporary measures for transitional arrangements (which are being used, for example, to introduce the TPR and TRR), as well as permanent ‘onshoring changes’. The UK regulators are planning to use a variety of powers. Most of their NtA modifications are being made under the Financial Regulators' Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 which delegates responsibility for technical standards to UK regulators and grants section 8 EUWA powers to make NtA modifications. Exit instruments making NtA modifications must be approved by HMT. HMT is also proposing another SI that would give the regulators temporary powers to make transitional arrangements i.e. the power to waive or modify ‘firms' regulatory obligations where those obligations have changed as a result of onshoring financial services legislation. The power will enable transitional provisions to be made in response to changes to the regulators’ own rules, onshored EU regulations, and EU-derived domestic primary and secondary legislation.’
As we explained in our April 2017 report, exiting the EU and the single market legal order removes the legal basis for a mass of FS regulatory provisions that depend on those DRC arrangements between the UK and the EU-27/EEA-3; these extend far beyond the basic mechanics of passporting. In each case, the NtA process would remove the DRC references and related provisions (with EU/EEA states/firms being treated instead as third countries/third country firms) and remove the single market/pan-EEA dimension of regulation (and replace it with UK only based provisions).
In each case, and speaking very broadly, the UK then has what are essentially three options –
- To allow/provide for the DRC measure to be switched off entirely at 11.00 pm on 29/3/19 as if the DRC had never existed (immediate switch to third country basis);
- To make a permanent and unilateral adjustment to maintain the DRC provision under UK law/regulation (permanent retention); or
- To allow/provide for the DRC measure to be switched off but act unilaterally to introduce temporary measures/transitional arrangements, on a UK only basis, to help smooth the transition/change (under either HMT section 8 SIs or under the proposed powers for the regulators to make transitional arrangements referred to above) (transitional arrangements).
The UK cannot, of course, change the law and regulation, which UK firms face in the EU/EEA; it can only change UK law and regulation as it applies to UK firms and EU/EEA (and non-EEA) firms. The UK’s strategy is to publicly and fully debate the NtA issues at an early stage and promulgate the necessary transitional arrangements as part of the NtA process. It is doing so on the assumption that the transitional arrangements will be made on a unilateral basis without any bilateral agreement and, therefore, without seeking to making these measures (which mostly benefit EU-27/EEA firms) conditional on reciprocal treatment for by the EU for UK firms. The UK has found it very difficult to engage the EU on the question of transitional arrangements for a no-deal scenario (i.e. how, when the legal framework for DRC falls away, the switch to third country status would operate in practice). It seems that the negotiating politics on the EU side are to take a hard line and keep their powder dry for as long as possible and they have only recognised publicly the need for very limited measures. In a recent speech (see our update for the week ending 5 October) Steve Maijoor, representing ESMA, has hinted that the EU might bedeciding to introduce a temporary recognition regime for UK-CCPs.Of course, the EU might, at a later stage, relent and, even without any bilateral agreement/treaty, it could, on - a voluntary basis - reciprocate and coordinate EU/EEA measures with those made by the UK.
Against this background HMT and the UK regulators have been reviewing the impact of NtA changes to UK regulation and considering (in broad terms the three options above). HMT has already announced its approach and now the UK regulators are consulting on NtA changes to technical standards and their rulebooks. In the CP’s published last week (Documents 2.4 to 2.7 below), the Bank of England and PRA are consulting on these issues by identifying the changes and indicating whether there will be an element of permanent retention and, if not, whether the changes will take effect immediately on exit (immediate switch to third country basis) or whether the change will be subject to transitional arrangements. They are planning to use their transitional powers broadly to delay the application of onshoring changes ,with certain limited exceptions, so that firms providing services within the Bank’s and PRA’s regulatory remits do not generally have to prepare now to implement onshoring changes by exit day.
Here are some examples of each of these approaches -
Immediate switch to third country basis: -
- EU-27/EEA market operators (of regulated markets, multilateral trading facilities and organised trading facilities) will lose their MiFID II passporting rights for UK activities. HMG will not be introducing a temporary recognition regime for market operators. See our previous commentary here.
- HMG will not be retaining the EU’s Cross-Border Payments Regulation (CBPR) because it cannot find a way to retain/modify the regulation without placing UK payment service providers at a disadvantage on the pricing of Euro transactions. See our previous commentary here.
- ‘The PRA’s proposed changes to the Depositor Protection and Policyholder Protection Parts of the PRA Rulebook and the proposed changes described in Chapter 8 of CP26/18 would take effect on exit day and the PRA is not proposing to grant transitional relief.
- Requirement for a contractual recognition term (recognising bail-in rules) in contracts governed by third country law (which will include those under the law of EU-27/EEA states). The PRA [see Document 2.5 below] ‘does not propose to grant transitional relief in respect of liabilities that are intended to count towards a firm’s MREL. Therefore, EEA law governed liabilities, other than phase two liabilities, that are issued or materially amended after exit day and that are subject to the PRA’s Contractual Recognition of Bail-In rules, would not be subject to the temporary transitional power and would be required to include a contractual recognition term’.
- The PRA [see Documents 2.4 and 2.5 below] does not propose to use the temporary transitional power in respect of the Stay in Resolution rules ‘ in respect of new or materially amended non-UK EEA law governed financial arrangements in scope of the Stay in Resolution Part of the PRA Rulebook’.
Permanent retention: -
- HMT proposes that UK firms will be able to treat UCITS in the EEA as automatically non-complex instruments and they will continue to be able to take advantage of the PRIIPs exemption for EEA UCITS. See our previous commentary here.
- Existing UCITS rules on cash and investment will be maintained so that UK UCITS will still be able to hold cash at EEA credit institutions. See our previous commentary here.
- In payment services, many UK institutions hold safeguarding accounts in the rest of the EU, the UK government is proposing to allow institutions to hold safeguarding accounts anywhere in the world, providing the institutions meet specific criteria. See our previous commentary here.
- Document 2.4 below makes clear that ‘the proposed broad use of the transitional powers would mean, for example, that after exit day and for the duration of the transitional relief:
- PRA is proposing to exercise its transitionary powers to delay, for the duration of the transitionary relief, NtA changes concerning the assets of UK branches of third country insurers. The proposed changes to be delayed are explained as follows ‘Current third country branch undertakings, except Swiss general insurers, are required to keep assets up to the branch Solvency Capital Requirement (SCR) within the EEA, of which assets up to the branch Minimum Capital Requirement (MCR) must be kept in the UK. The PRA proposes that assets up to the branch SCR are required to be kept in the UK.’
- PRA is also proposing to delay the changes to the requirements, for firms which qualify as non-directive firms, on the location of admissible assets. The proposed change in this case is as follows – ‘Currently non-Directive firms are permitted to hold admissible assets in the EEA to meet their sterling denominated technical provisions. Admissible assets meeting technical provisions denominated in currency other than sterling, must be held in the EEA or in the country of that currency. There are no localisation requirements for business carried on by a UK firm outside the EEA.’
- HMT has introduced the TPR and TRR for financial services sectors. You can access our commentary on the ones relating to financial services firms and central counterparties (CCPs) here. The single market passporting rights of EEA FS firms will be turned off by NtA modifications; as a result they may need UK authorisation, but the TPR will provide a temporary permission for these firms under Part 4A of the Financial Services and Markets Act 2000 (FSMA) to allow them to continue to operate in the UK either on a services or branch basis as they operated under the single market passport prior to exit. This temporary permission will provide time for them to obtain UK authorisation. The TRR will provide temporary recognition for non-UK CCPs in a similar way.
- There will also be a temporary permission regime for alternative investment funds (AIFs) which will work in a broadly similar manner to the one mentioned above. See our previous commentary on the issue here.
- HMT also proposed a temporary permission regime for payment services. The regime works in a broadly similar manner to the ones mentioned above. See our previous commentary here.
- Requirement for a contractual recognition term (recognising bail-in rules) in contracts governed by third country law – as noted above, the PRA proposes to grant transitionary relief in respect of phase two liabilities.
1. FCA: Speech by Andrew Bailey: Brexit and financial services: where have we got to?
Text of Andrew Bailey's speech given on 25 October 2018 follows, in which he discusses aspects of Brexit planning at FCA. The full speech can be accessed here.
“But, as I have said before, we urgently need the engagement of our EU counterparts so that we can put in place Memorandums of Understanding (MoUs) and other important practical arrangements. This is not just a self-serving UK point; it applies to both sides. MoUs will support cross border supervision of firms and data sharing will support our ability to jointly oversee markets. The FCA is a significant sharer of cross border data. We pass on around 70% of the transaction reports we receive to our counterparts across the EU, and we are committed to continue this if it is possible. We will also need close coordination on MiFID transparency thresholds if the EU version of MiFID is no longer based on UK data.
This technical, regulator-to-regulator coordination is essential to minimise disruption in a no-deal situation. Of course, there is a broader solution to removing cliff edges which is for both the UK and EU to commit to taking reciprocal equivalence decisions on each other’s regimes, as early as possible. Our work to onshore the EU rulebook, as outlined in our consultation, demonstrates that on day one, the UK will have the most equivalent framework to the EU of any country in the world.
But, as the FCA consumer objective goes beyond consumers in the UK, it is relevant to consumers elsewhere served by UK firms whatever their nationality. We cannot of course make rules that override those in the EU or require legislation elsewhere that achieves a particular end. But there are things we can do, and we are doing. Let me give two examples. First, we have given our public support to the statement by Lloyd’s of London that in the event of the UK leaving the EU with no transition or implementation period, Lloyd’s underwriters will continue to honour their contractual commitments including the payment of valid claims. This goes to the heart of treating customers fairly. To say the alternative, that valid claims will not be met, would not be consistent with our objectives as the UK conduct regulator and it would violate the tradition of the City of London. To be clear, this is not to deny there are cliff-edge risks to a sudden and hard Brexit transition. There are. But the time to analyse them is over. We have to deal with them and solve the problems we face.
Whatever happens, as the UK becomes a third country it will operate under a system of equivalence, in the same way as other third countries […] One broad outcome is to seek to stay closely aligned to the EU. There are good reasons for doing this: our markets are closely integrated and we have developed much of the EU financial services acquis together. So we need to find a way to create the effective voice and practical involvement for the UK authorities when it comes to the shape and form of that future alignment. We can build on our close and effective working relations with authorities in the EU, but obviously we would need a framework in which to do that. That’s the 'no rule taker' point.
Whatever approach we take, there are a couple of tests that I think the arrangement should need to pass. The first is that we can appropriately tailor our regulatory system to particular features of our markets. And second, we can change and adapt the system as markets change, and amend our rules when – as happens from time to time – they don’t quite work as we intended when applied in practice.
The system is much more robust to shocks, but we have some other challenges on our hands.
If I had to name an area where I would criticise the EU approach, it is the ability to amend and adjust and recognise the need to do so more rapidly. And, as evidence, I will introduce the Packaged Retail and Insurance-based Investment Products Regulation, PRIIPS to its fans. The aim of transparency and comparability of investment products is important, and we share it, but PRIIPS doesn’t work as well as it needs to. That’s just a fact of life. It’s why we have launched a Call for Input on PRIIPS to get a more extensive picture of the issues. But we have also included in the Call for Evidence some quite stern language that we do not support any attempt to undermine the overall objectives, and we will not act on the basis of weak evidence. And I do not envisage that state of affairs changing with Brexit.”
2. Bank of England/PRA: Approach to finanical services legislation under the EUropean Union (Withdrawal) Act
BoE/PRA have published a number of communications setting out changes to rules and binding technical standards arising out of Brexit as well as further guidance on the process for authorisation and recognition for incoming EEA firms and non-UK FMIs, including the temporary permissions and recognition regimes. "Dear CEO" letters have been sent to all firms authorised and regulated by PRA, as well as EEA firms undertaking cross-border activities into the UK from the rest of the EU via passporting; and to non-UK CCPs and non-UK CSDs updating them on the approach to their preparations for Brexit. There are separate consultation papers on the following: the general approach to making rules and binding technical standards; key changes to PRA rules and relevant binding technical standards; key changes to FMI-related binding technical standards and rules and key changes to binding technical standards in relation to resolution. Responses to each of the consultations are required by 2 January 2019. BoE also highlights a new single webpage that brings together previous communications to firms on EU withdrawal. The news publication linking to all other publications can be accessed here.
2.1 Dear CEO Letter: Update to firms on the Bank's regulatory approach, and firm preparations, for EU withdrawal
The dear CEO letter can be accessed here.
2.2 Dear CEO Letter: Update to central counterparties (CCPs)
The dear CEO letter can be accessed here.
2.3 Dear CEO Letter: Letter to central securities depositories (CSDs)
The dear CEO letter can be accessed here.
“There is currently no UK domestic regime for the recognition of non-UK CSDs as recognition is the responsibility of EU authorities. Under the current EU framework, Article 25 of the CSDR sets out the application process and criteria for third-country CSDs wishing to be recognised in the EU. Article 69 of the CSDR sets out the transitional regime for third-country CSDs while the recognition application process is ongoing.
Under the European Union (Withdrawal) Act 2018, existing EU law will be converted into UK domestic law at the point of the UK’s withdrawal from the EU. The UK Government has proposed that, immediately following the UK’s withdrawal from the EU, UK domestic law requirements for recognition of non-UK CSDs will in essence be the same as the current requirements for recognition of third-country CSDs in the EU under Article 25 of the CSDR.
The CSDR provides that the recognition process for third-country CSDs must commence once an equivalence assessment of the jurisdiction in which that CSD is established has been completed. Once a positive equivalence decision has been made, non-UK CSDs in the relevant jurisdiction will have six months to make an application for recognition. The Bank must also establish cooperation arrangements with the CSD’s responsible third-country authorities. The Bank anticipates charging a fee for recognition and will consult on this in due course.
In line with this, any non-UK CSDs that wish to continue to provide CSD services in the UK after the UK’s withdrawal from the EU are encouraged to indicate their intent to use the transitional regime now, prior to the legislation coming into force. If they reply to this letter saying they wish to use the transitional regime, then the Bank will, upon the legislation coming into force and subject to its terms, treat this as the notification and confirm that it has done so. The non-UK CSD can rescind this notification at any point by notifying the Bank.”
2.4 Bank of England Consultation Paper/PRA Consultation Paper CP25/18: The Bank of England’s approach to amending financial services legislation under the European Union (Withdrawal) Act 2018
The consultation paper can be accessed here.
2.5 PRA Consultation Paper CP26/18: UK withdrawal from the EU: Changes to PRA Rulebook and onshored Binding Technical Standards
The consultation paper can be accessed here.
2.6 Bank of England Consultation Paper: UK withdrawal from the EU: Changes to FMI rules and onshored Binding Technical Standards
The consultation paper can be accessed here.
2.7 Bank of England Consultation Paper: UK withdrawal from the EU: The Bank of England’s approach to resolution statements of policy and onshored Binding Technical Standards
The consultation paper can be accessed here.
3. Draft Occupational and Personal Pension Schemes (Amendment etc.) (EU Exit) Regulations 2018
The draft SI for the UK and the Northern Ireland specific SI has been laid before Parliament. The UK version can be accessed here and the Northern Irish version here.
This SI removes references to EEA institutions and states. The explanatory information notes “no, or no significant, impact on the private or voluntary sector is foreseen.”
4. Draft Financial Conglomerates and Other Financial Groups (Amendment) (EU Exit) Regulations 2018
Explanatory information has been published in relation to this SI, which will make amendments to retained EU law related to the prudential treatment of financial conglomerates. It is noted that the draft SI will be published in due course. The explanatory information can be accessed here
“The SI will identify and amend deficiencies within the EU text to ensure that the FICOR regulations will remain operative in a UK-only context post-exit. Specific changes that the SI will make include:”
- Definition of a financial conglomerate
- Definition of a competent authority
- Transfer of functions
- Removal of supervisory cooperation
- Competent authority discretions
- Binding Technical Standards
5. Draft Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018
This draft SI has been laid before Parliament. It can be accessed here.
“Deficiencies are contained in the legislation upon which the United Kingdom relies before its exit from the European Union to comply with its obligations relating to Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms.
The concept of bank resolution was a response to the financial crisis and was enacted in UK in the Banking Act 2009 (c.1). Powers were conferred on the Bank of England, other financial regulators and the Treasury to prevent insolvency of institutions, having regard to objectives such as maintaining financial stability and minimising reliance on extraordinary public financial support.
These Regulations refer to the Rulebook made by the Prudential Regulation Authority under the Financial Services and Markets Act 2000 (c.8).
no significant impact on the costs of business or the voluntary sector is foreseen.”
6. Draft Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018
A draft SI and explanatory information have been published with regard to retained EU law relating to rules on OTC derivatives, central counterparties and trade repositories, to be laid under the EU (Withdrawal) Act. The publication can be accessed here.
“Consistent with the government’s objective of providing continuity to businesses and consumers as far as possible, the policy approach set out in the EMIR legislation will not change after the UK has left the EU. However, to ensure that the EMIR regime continues to operate effectively once the UK is outside of the EU, certain deficiency fixes to the legislation will be necessary. These are explained below.”
- General transfer of functions
- The UK will take over all EU Commission equivalence decisions and transfer the power to make such decisions in the future to HMT.
- Continuation of EMIR requirements in regards to clearing, reporting and margin obligations
7. Draft Central Securities Depositories (Amendment) (EU Exit) Regulations 2018
A draft SI and explanatory information have been published with regard to the onshoring of central securities depositories legislation, to be laid under the EU (Withdrawal) Act. The publication can be accessed here.
“The SI makes amendments to ensure that the CSDR continues to operate effectively in the UK post-EU exit. For example, the definition of “CSD” now covers UK CSDs only, rather than all EU CSDs, and non-UK CSDs are defined as “third-country CSDs”.
The SI transfers various functions and powers currently held by the European Securities and Markets Authority (ESMA) to the appropriate UK authorities – the Bank of England, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
Powers are being transferred to the Bank of England for the purpose of recognising third country CSDs. The Commission’s powers to make equivalence decisions are being transferred to HM Treasury (Article 25). Under Article 25 once an equivalence decision is made by HM Treasury in relation to a third country, a CSD in that third country will be able to apply for recognition from the Bank of England.
The SI makes amendments to the transitional arrangements under Article 69 of the CSDR and related provisions in the 2017 Regulations. These amendments are intended to allow third country CSDs who wish to continue to provide services relating to the UK after exit to continue to benefit from transitional arrangements.
A requirement is introduced for third country CSDs to notify the Bank of England before exit day of their intention to provide services in the UK following exit. This requirement will also apply to any third country CSD benefiting at the point of exit from the transitional under the EU CSDR or the 2017 Regulations. Third country CSDs within the transition will be subject to existing UK law rather than the CSDR until their application for recognition has been determined or the time limit for such application has expired (six months from their jurisdiction being determined equivalent by HM Treasury). Any third-country CSD which is offering CSD services in the UK and fails to notify the Bank of England may be subject to public censure, as set out in the Financial Services and Markets Act 2000 (FSMA).
Further, existing UK CSDs that have made an application to the Bank of England for authorisation prior to exit will be subject to existing UK law rather than the CSDR while that application is being considered.”
8. Draft Ring-fenced Bodies (Amendment) (EU Exit) Regulations 2018
Explanatory information has been published in relation to this SI, which sets out the proposed amendments to UK legislation related to the UK’s ring-fencing regime, to be laid under the EU (Withdrawal) Act. It is noted that the draft SI will be published in due course. The explanatory information can be accessed here.
“The ring-fencing regime is a UK initiative implemented through domestic legislation and is not itself an implementation of EU requirements. As such, the policy approach and scope of the ring-fencing framework will remain workable after the UK has left the EU. However, some of the definitions of permitted and prohibited activities in relation to ring-fencing were drafted to reflect the UK’s place as part of the EU single market for financial services. Once the UK has left the EU, some of these definitions will be deficient. In order to ensure that ring-fencing requirements continue to operate as they do now, amendments to some definitions in ring-fencing legislation will be needed. Specifically, this SI will make amendments to the EAPO and other relevant domestic legislation to ensure that the UK’s ring-fencing regime continues to operate as it currently does in a no-deal scenario.”
Other publications from the RegZone Brexit news feed
PRA: Speech by Sam Woods: Good cop/bad cop
Text of this speech, given on 25 October 2018 follows, in which Sam Woods suggests that “good cop/bad cop” is a good analogy for two different aspects of PRA's role as regulator – the former representing areas where the regulator and firms are collectively facing a shared challenge, and the latter where there is a degree of tension between PRA’s interests and those of firms. Specific topics include: Brexit, operational resilience, ringfencing and equity-release mortgages. The speech can be accessed here.
FMLC: "Onshoring" SI comment Series: Bank Recovery and Resolution
FMLC's 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 full paper can be accessed here.
PRA: CP24/18: Occasional Consultation Paper
This CP sets out various proposed changes to PRA Rulebook Parts, supervisory statements, statements of policy and forms. Specific areas covered include: Branch return reporting (including incoming/third country firms); ringfencing; enforcement; depositor protection; policy protection and written reports by external auditors to PRA. Responses are required by 22 November 2018 (Branch return reporting) and 22 January 2019. The consultation paper can be accessed here.
TSC: SME finance
TSC's report raises concerns over FCA's handling of recent misconduct in relation to SME banking, suggesting "it is clear that extending the regulatory perimeter is now necessary. Waiting for another high-profile misconduct scandal before pursuing it would be irresponsible". TSC advocates the creation of a financial services tribunal to help SMEs resolve disputes with lenders and argues that expanding FOS's remit to handle SME cases should not be rushed through. Amongst other matters, the report recommends that commercial lending should be regulated to protect SMEs and suggests that Brexit is the opportunity for the capital requirement regime to better support competition. The report can be accessed here.
EC: Relocation of EBA
The EC has welcomed the European Parliament's vote in relation to the relocation of EBA to Paris. The news publication can be accessed here.
EC: Commission Work Programme 2019
Section IV of the programme discusses Brexit and preparedness. An annex provides further information, as on the initiatives included in the Work Programme. The work programme can be accessed here.
EC: Report by Donald Tusk to the European Parliament on October European Council meetings
The statement given on 24 October 2018 follows. Topics include: Brexit. The full statement can be accessed here.
HoL Secondary Legislation Scrutiny Committee (Sub-Committee A): Proposed negative statutory instruments under the European Union (Withdrawal) Act 2018
Statutory instruments in this report include the draft Consumer Protection (Enforcement) (Amendment etc.) (EU Exit) Regulations 2018 and the draft Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018. The full report can be accessed here.
Department for Exiting the EU: Joint Ministerial Committee (EU Negotiations) communiqué
A note of the meeting held on 22 October 2018 has been published. The note can be accessed here.
HoL EU Committee: Brexit evidence
The Committee has written to Dominic Raab, urging him to engage with Parliamentary committees in order to facilitate scrutiny of the Withdrawal Agreement and political statement on the future UK-EU relationship. Dominic Raab had previously undertaken to give evidence on a regular basis, but the Committee was recently informed that he will be unable to attend or give evidence until after a deal has been finalised. The full statement can be accessed here.
PMO: Speech by Theresa May
Text of Theresa May's speech to HoC on 22 October 2018 follows. It can be accessed here.
HoC European Scrutiny Committee: 40th Report of Session 2017-19
Section 10 of the report looks at the UK and the EU preparedness for a “no deal" Brexit. This matter has been cleared from scrutiny by the Committee. The full report can be accessed here.
EBA: 2019 Work Programme
EBA has published its work programme for the coming year. Specific areas covered include: Basel III implementation and financial innovation. The report also highlights key strategic areas of work for the period 2019-2021. The full programme can be accessed here.
 Acquis communautaire
 Temporary Permission Regime – see further below under the subheading ‘Transitional relief’.
 Temporary Recognition Regime – see further below under the subheading ‘Transitional relief’.
 Some Binding Technical Standards have been assigned to both PRA and FCA. In these cases, one regulator will take the lead in proposing amendments. The regulators then have the possibility to retain the BTS as joint or divide them, so that there is a version for PRA regulated firms and a version for FCA regulated ones. Most of the ‘joint’ technical standards covered in PRA’s CP26/18 (see Document 2.6 below) are to be divided.
 Dual recognition coordination (DRC) is explained in Chapter 1 of our April 2017 Report. DRC is a broad term to cover a variety of techniques such as “mutual recognition”, “home state recognition/supervision”, “deference”, “substituted compliance” and “passporting”.