Prudential Regulation Authority Rulebook

3.1

Where Guidelines and Recommendations, applicable as the end of the transition period, remain relevant, firms and FMIs should interpret them in light of the UK’s withdrawal from the EU and the end of the transition period, and onshoring changes that are being made to ensure that the UK regulatory framework operates appropriately. Firms and FMIs should also interpret the Guidelines and Recommendations in light of the use of any relevant transitional relief.

3.2

Below is a non-exhaustive list of onshoring changes that have been made by Government under the Act, which are relevant to firms’ and FMIs’ interpretation of non-binding EU materials. However, transitional relief granted by the Bank or PRA may affect the time that some of these changes take effect.

• EEA firms, FMIs and funds that were able to provide services into the UK through the use of passporting will need to seek authorisation or recognition to continue to be able to do so after the end of the transition period. Therefore, any reference to passporting or processes associated with passporting is redundant. However, HM Treasury has legislated to allow EEA firms, FMIs, and funds to continue their activities in the UK for a limited period after the end of the transition period. References to third country firms and FMIs should be interpreted to include firms and FMIs that have temporary permission or recognition, as appropriate.
• Roles and responsibilities carried out by EU authorities are being reallocated to the most appropriate UK authority, to the extent that they remain relevant when the UK has left the EU. For example, HM Treasury has transferred the responsibility for central counterparty (CCP) recognition to the Bank of England, and has transferred the European Insurance and Occupational Pensions Authority (EIOPA) function of declaring an ‘exceptional adverse situation’ to the PRA. Some EU roles that exist to support the EU single market will be deleted. Firms and FMIs should interpret references to EU functions with reference to the new UK authority taking on that function. References to functions that are being deleted in Government onshoring legislation can be ignored.
• The specific legal obligations for UK regulators to share information and co-operate with EU regulators that existed before the end of the transition period will fall away. UK regulators will, however, be able to rely on general statutory provisions that support supervisory co-operation with third country authorities. Firms and FMIs should therefore interpret references to such legal obligations in this light, but note that the Bank and PRA will continue to co-operate with international authorities and regulators, including EU authorities, in pursuit of their statutory objectives.
• The treatment of EEA firms and assets for the purposes of capital and liquidity requirements will, in most cases, be aligned with the treatment of third country firms and assets. Therefore, firms should interpret any Guidelines or Recommendations providing for preferential treatment of EEA assets in light of that approach. Transitional relief and some specific equivalence decisions may be relevant.
• Where capital or liquidity consolidation was only required at the EEA level previously, this will be required at the UK level after the end of the transition period. For insurance groups, firm-specific consolidation waivers remain available. Therefore, firms should interpret any reference to the EEA consolidated group as if it was to the UK consolidated group. Transitional relief and some specific equivalence decisions may be relevant. 

3.3

The Bank and PRA expect firms and FMIs to read and interpret existing EU Guidelines and Recommendations 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’.^[3]