Guidance

SS1/19 – Non-binding PRA materials: The PRA’s approach after the UK’s withdrawal from the EU

Chapter

Relevant legislative changes

Printed on: 01/11/2024

Rulebook at: 31/12/2020

3

Relevant legislative changes

3.1

There are various key changes being made to legislation that firms should consider when interpreting existing PRA non-binding materials. A non-exhaustive list of these changes is set out below.

  • Passporting under EU financial services legislation is no longer available in the UK after the end of the transition period.[4] Therefore, any reference to EEA passporting, or processes associated with EEA passporting, are redundant.
  • Functions carried on by EU authorities that exist solely to support the EU single market are redundant and have therefore been deleted. Other roles and responsibilities that were previously carried out by EU authorities have been reallocated to the most appropriate UK authority after the end of the transition period, to the extent that they remain relevant. For example, HM Treasury has transferred to the PRA the European Insurance and Occupational Pensions Authority (EIOPA) function of declaring an ‘Exceptional Adverse Situation’. Firms should interpret references to EU functions with reference to the new UK authority taking on that function.
  • The treatment of EU firms and assets for the purposes of capital and liquidity requirements has, in most cases, been aligned with the treatment of third countries’ firms and assets. Therefore, references to preferential treatment of EU assets are no longer relevant and firms should have reference to the third country treatment of those assets.
  • Where capital or liquidity consolidation was only required at the EEA level previously, after the end of the transition period this is required at the UK level. (For insurance groups, firm-specific consolidation waivers remain available.) Therefore, firms should interpret any reference to the EEA consolidated group, to the UK consolidated group. 
  • 4. Passporting rights will continue for firms operating between the UK and Gibraltar. The Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 established transitional arrangements for Gibraltar that will preserve the status quo of deemed-passporting for Gibraltarian firms after the end of the transition period. These transitional arrangements have been extended until Friday 31 December 2021 by The Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2020. The arrangements can be further extended until such time as the permanent arrangements of the Gibraltar Authorisation Regime are in place.
  • 31/12/2020

3.2

The PRA expects firms to read and interpret existing PRA non-binding materials in light of any relevant onshoring changes to the legislation to which they relate. More information on the Bank’s and PRA’s general approach to amending financial services legislation is available in CP25/18 ‘The Bank of England’s approach to amending financial services legislation under the European Union (Withdrawal) Act 2018’.[5]

  • 31/12/2020