Prudential Regulation Authority Rulebook

1.1

This joint Bank of England (Bank) and Prudential Regulation Authority (PRA) Statement of Policy (SoP) sets out the Bank’s and PRA’s approach to EU Guidelines and Recommendations in light of the UK’s withdrawal from the European Union (EU) and the end of the transition period.

1.2

This SoP is relevant to all PRA-regulated firms, investment firms in scope of the UK resolution regime and all Bank-regulated financial market infrastructure firms (FMIs) operating, or intending to operate, in the UK. Firms and FMIs that become authorised or recognised to provide services in the UK on or after the end of the transition period (including firms and FMIs in the temporary permission or recognition regimes that previously provided services in the UK via EU rights, such as passporting) will be subject to these expectations.

1.3

The UK’s membership of the EU came to an end on Friday 31 January 2020. The UK entered into a transition period lasting until 11pm on Thursday 31 December 2020 (which is defined in UK law as ‘IP completion day’), during which EU law continued to apply to the UK.

1.4

HM Treasury has used its powers under the European Union (Withdrawal) Act 2018 (the ‘Act’) to ensure that the UK would continue to have a functioning financial services regulatory regime after the end of the transition period. To do this, it has ensured that EU-derived laws and rules that were in place in the UK before IP completion day continue to apply in the UK to the extent that they remain operable. Changes have only been made to those laws or rules that would otherwise not operate appropriately. This provides continuity and certainty for firms and FMIs after the end of the transition period.

1.5

The European Supervisory Authorities (ESAs) have powers to issue Guidelines and Recommendations. European regulators, PRA-regulated firms, and FMIs are currently under an obligation to ‘make every effort to comply’ with them. National authorities have the option of not complying, but must inform the relevant ESA of this, stating their reasons. There is currently no exhaustive list of Guidelines and Recommendations maintained by the ESAs but they are generally available on the relevant authority’s website.

1.6

In addition, the ESAs produce other non-legislative material. This includes publishing Q&As to facilitate common understanding of EU regulatory provisions. ESA Q&As have no binding force. The Bank and PRA considers that ESA Q&As may continue to be relevant, and that the Bank and PRA may have regard to these as appropriate.

1.7

The Bank and/or PRA may issue further statements in relation to this topic, including in relation to any EU materials issued after the end of the transition period.