Regulations update legislation to account for Art 50 extension, providing contractual continuity
The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 SI 2019/1212 have been made with the aim of ensuring a coherent and functioning financial services regulatory regime is in place once the UK leaves the EU.
The Regulations have been made under section 2(2) of the European Communities Act 1972 and section 8(1) of the European Union (Withdrawal) Act 2018 to address failures of retained EU law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU (in particular, the deficiencies under section 8(2)).
Regulations 2(2), 3, and 9 to 12 are made using the power in section 2(2) of the European Communities Act 1972, and all other provisions (except regulation 1) are made under the powers in section 8(1) of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 2018. Regulation 1 (citation and commencement) is made under a combination of the powers in both Acts.
The UK government says that it is committed to ensuring all necessary measures have been taken to prepare the UK’s regulatory regime for exit on 31 October and has therefore used the additional time provided by the Article 50 process extension from March 29 to review EU exit legislation. The Regulations update legislation to account for the Article 50 extension. The review has also identified a limited number of existing exit provisions which will need amending. In particular, key provisions relating to the contractual continuity schemes for payment services and electronic-money firms, and the transitional provisions for third country benchmarks, need to be clarified and supplemented to ensure they appropriately address the risk of post-exit disruption to firms and consumers. While the Regulations do not change the policy approach of earlier EU exit instruments, they do strengthen a number of important provisions. In addition, the Regulations correct minor issues identified in earlier EU exit legislation.
An explanatory memorandum has also been published.