FCA published a policy statement (PS19/15) that outlines the near final rules applying FCA’s existing supervisory and enforcement processes to securitization repositories when UK leaves EU. It also sets out the final rules in respect of additional enforcement powers under the Securitization Regulations 2018. PS19/15 follows the consultation paper CP19/11, in addition to an earlier consultation paper (CP18/30) and policy statement (PS18/25) on securitization. CP19/11 had proposed changes to the Decision Procedure and Penalties Manual (DEPP) and the Enforcement Guide (EG) that reflect new responsibilities of FCA over securitization repositories.
ESMA regulates the securitization repositories in EU. However, post Brexit, the Treasury intends to transfer responsibility for regulating securitization repositories to FCA. To this end, the Treasury has laid, before Parliament, the Securitization (Amendment) (EU Exit) Regulations 2019 (Exit Statutory Instrument or Exit SI). FCA has published these near final rules to implement the Exit SI. These rules will be made final when the Exit SI comes into force once UK leaves EU. FCA has also published final rules in respect of minor amendments to DEPP and EG resulting from new enforcement powers granted to FCA under the Securitization Regulations 2018 (2018 Regulations). This follows CP18/30 and PS18/25, wherein FCA consulted on and laid out rules in respect of the draft Statutory Instrument. The final rules resulting from new enforcement powers granted under the 2018 Regulations will come into force immediately.
FCA received one formal response to CP19/11 and the respondent supported the overall approach. As a result, the final and near-final rules are the same as those consulted on in consultation papers, except for some minor amendments to clarify decision-making procedures and update references to the legal instruments. The legal instrument and draft legal instrument accompanying PS19/15 contain the final and near-final rules, including:
- Changes arising from the Exit SI—FCA is making changes to DEPP and EG to enable it to apply existing enforcement processes in its new role as regulator of securitization repositories. FCA will apply its existing enforcement processes in the exercise of disciplinary and investigatory powers. FCA will apply a decision-making procedure for registering or withdrawing the registration of securitization repositories.
- Changes arising from the 2018 Regulations—FCA is creating decision-making procedures for imposing a suspension, condition or limitation on an individual for a breach of a requirement imposed by or under the 2018 Regulations. FCA is also creating decision-making procedures for imposing a suspension, limitation or other restrictions on an authorized person for a breach of a requirement imposed by or under the 2018 Regulations.
Keywords: Europe, EU, UK, Banking, Securities, Securitization Regulation, Securitization Repositories, CP19/11, Brexit, PS19/15, FCA, ESMA
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