Economic Secretary to the Treasury (): In preparation for
leaving the European Union, HM Treasury made over 50 EU Exit
Statutory Instruments under the European Union (Withdrawal) Act
2018 to ensure the UK’s financial services regulatory regime
stood ready for all scenarios at exit day. This included
introducing a range of temporary permissions and transitional
regimes to minimise any disruption to firms and consumers as we
leave the EU.
The UK has now left the EU and entered a Transition Period, which
will last until 31 December 2020. The European Union (Withdrawal
Agreement) Act 2020 (“EUWAA 2020”) delayed those parts of the EU
Exit Statutory Instruments that would have come into force
immediately before, on, or after exit day so they instead come
into force at the end of the Transition Period. As a result of
further secondary legislation made under the EUWAA 2020, the
temporary permissions and transitional regimes will also now
apply at the end of the Transition Period.
While, in general, the same laws and rules will apply at the end
of the Transition Period, HM Treasury recognises it will be
important, irrespective of the agreement that is reached between
the EU and UK, for the regulators to have the flexibility to
smooth any adjustments to the UK’s regulatory regime for
financial services at the end of the Transition Period.
The department will therefore retain the regulators’ “Temporary
Transitional Power” (TTP), which was introduced via the Financial
Services and Markets Act 2000 (Amendment) (EU Exit) Regulations
2019, and shift its application such that it is available for use
by the UK regulators for a period of two years from the end of
the Transition Period.
The TTP will allow the Bank of England, the Prudential Regulation
Authority and the Financial Conduct Authority to phase-in changes
to UK regulatory requirements so that firms can adjust to the
UK’s post-Transition Period regime in an orderly way, in line
with the objectives already set by Parliament.
