Policy and tools

Open Bank consultations and other requests for your feedback

View consultations and other requests that are open for your inputs and views, with contact details and closing date.

• See all Bank publications relating to FMIs

Onshored legislation and Requirements for UK CSDs, Recognised clearing houses, UK CCPs and Payment Systems

The UK has made various legislative changes to ensure a functioning legal framework for financial regulation following the UK’s withdrawal from the EU and the end of the transition period.

The Bank has implemented some of these legal changes, including in relation to FMI rules and FMI-related binding technical standards. We have made these amendments to FMI rules and technical standards via ‘EU Exit Instruments’.

The Bank has also set out its use of the temporary transitional power (TTP) and it has published its transitional direction (the legal instrument that gives effect to this power) in December 2020. 

In accordance with the EU (Withdrawal Agreement) Act 2020, the Exit Instruments and transitional direction came into effect at the end of the transition period. 

The consultation papers and policy statements published before the end of the transition period relating to changes to FMI rules and binding technical standards, and the TTP, are listed below: 

• Joint Bank/PRA CP25/18 ‘The Bank of England’s approach to amending financial services legislation under the European Union (Withdrawal) Act 2018’
• Consultation Paper on ‘UK withdrawal from the EU: Changes to FMI rules and onshored Binding Technical Standards’
• Joint Bank/PRA PS5/19 ‘The Bank of England’s amendments to financial services legislation under the European Union (Withdrawal) Act 2018’
• Joint Bank/PRA CP18/19 ‘UK withdrawal from the EU: Changes following extension of Article 50’
• Joint Bank/PRA CP13/20 ‘UK withdrawal from the EU: Changes before the end of the transition period’
• Joint Bank/PRA PS27/20 ‘The Bank of England’s amendment under the European Union (Withdrawal) Act 2018: Changes before the end of the transition period’

• The EU Exit Instruments amending FMI rules and on-shored Binding Technical Standards.
• The Bank of England’s Supervisory Statement on non-binding Bank materials relating to FMI supervision. 
• The General Guidance on the Bank’s transitional direction 
• The Guidance on the Bank’s use of the transitional direction as FMI competent authority  

There are six main Regulations made by HM Treasury (HMT) which make amendments to the retained EMIR. They are:

• The Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018
• The Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018
• The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019
• The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019
• The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2020
• The Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020

There are two main Regulations made by HMT which make amendments to the retained CSDR. They are:

• The Central Securities Depositories (Amendment) (EU Exit) Regulations 2018
• The Investment Exchanges, Clearing Houses and Central Securities Depositories (Amendment) (EU Exit) Regulations 2019

There are two main Regulations made by HMT which make amendments to the UK settlement finality regime. They are:

• The Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019
• The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019OPENS IN A NEW WINDOWOPENS IN A NEW WINDOWOPENS IN A NEW WINDOWOPENS IN A NEW WINDOWOPENS IN A NEW WINDOW

Enforcement powers

We also have enforcement powers under the different legal regimes applicable to FMIs.

Requirements powers

We also have the power to issue requirements to recognised UK CSDs, recognised UK CCPs and systemic third-country CCPs. See the Statement of Policy which clarifies the Bank’s policy on these requirements powers with respect to the allocation of decision-making regarding statutory notices, its approach to supervisory statutory notice decision-making, and its approach to publication of supervisory statutory notice decisions.

Crisis information

Financial market infrastructures are critical to a stable financial system. Systems should contact their supervisors in the first instance if they have any issues. 

Insolvency practitioners’ protocol

The purpose of the industry insolvency protocol is to promote a clearer understanding of the regime (set out in Part VII of the Companies Act 1989) and the responsibilities of central counterparties (CCPs) and insolvency practitioners (IPs) in the event of a default in relation to an insolvent clearing member. 

The protocol is non-binding and sets out the mutual understanding of the IPs and CCPs as to procedures that they consider would be desirable to be followed in such a default event.

The protocol includes:

• procedures to facilitate coordination and information exchange between IPs and CCPs
• the legal obligations of IPs and CCPs under Part VII of the Companies Act and EMIR (for CCPs)
• the responsibilities of IPs and CCPs in cases where either the special administration regime (SAR) or general administration (under insolvency law) is applied
• practical arrangements for CCPs and IPs to achieve their respective objectives

The protocol is relevant for participants in central clearing including:

• CCPs, clearing members and their clients
• relevant authorities such as the Bank of England, HMT and the FCA
• IP; and any other party that may consider itself affected by the default of a clearing member

Guidance on recognised clearing houses for insolvency practitioners

Regulatory fees

The Bank has statutory powers to require FMIs to pay fees relating to supervisory work and for certain applications.

The Bank levies fees for its FMI supervisory activity and the policy activity which supports this, as permitted by the Bank’s fee powers. This includes the costs of FMI supervision staff together with relevant policy support, specialist resources and corporate services and other costs associated with the work of the FMID. Other areas of activity undertaken by FMID not within the scope of the powers set out above will continue to be funded out of the Bank’s broader budget.

• The Bank of England’s fees regime for financial market infrastructure supervision 2023/24
• The Bank of England’s fees regime for UK financial market infrastructures

Stablecoin

Stablecoins are a form of digital asset that can be used to make payments. They tend to be less volatile than cryptoassets. That is because their value is tied to other, stable, assets.

The Bank of England has recently published a Discussion Paper setting out its proposed regime for systemic payments systems using stablecoins and related service providers. 

• What are stablecoins and how do they work?
• Cross-authority roadmap on innovation in payments
• Regulatory regime for systemic payment systems using stablecoins and related service providers

Critical Third Parties

FMIs and other regulated firms increasingly rely upon certain third party service providers to deliver their services, some of which are critical to UK financial stability. Failure in or disruption to these third-parties’ services could act as a single-point-of-failure impacting multiple firms and FMIs simultaneously and, in some cases, UK financial stability. In November 2024, the UK regulators (Bank of England, Prudential Regulation Authority and Financial Conduct Authority) published rules and related documents concerning a new Critical Third Party Regime.

The Financial Services and Markets Act 2023 (FSMA 2023) contains statutory measures, including a framework for HMT to designate CTPs and powers for the regulators to make rules for, gather information from, and take enforcement action against designated CTPs in connection with the services they provide to FMIs and regulated firms. 

Other key CTP regime links:

• Critical Third Parties Instrument 2024
• Critical Third Parties Emergency Provisions Instrument 2024
  
• Supervisory statement 6/24 - Critical third parties to the UK financial sector
• Supervisory statement 7/24 - Reports by skilled persons: Critical third parties
• Policy statement 16/24 - Operational resilience: Critical third parties to the UK financial sector
• Approach to the oversight of critical third parties