The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019
2019 No. 403
Exiting The European Union
Financial Services
The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019
Made 27th February 2019
Coming into force in accordance with regulation 1(2)
The Treasury, in exercise of the powers conferred by section 8(1) of, and paragraph 21(b) of Schedule 7 to, the European Union (Withdrawal) Act 20181, make the following Regulations.
In accordance with paragraph 1(1) of Schedule 7 to that Act, a draft of this instrument was laid before, and approved by a resolution of, each House of Parliament.
PART 1
General
Citation and commencement
1.—(1) These Regulations may be cited as the Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019.
(2) These Regulations come into force on exit day.
PART 2
Amendment of the Packaged Retail and Insurance-based Investment Products Regulations 2017
Amendment of the Packaged Retail and Insurance-based Investment Products Regulations 2017
2.—(1) The Packaged Retail and Insurance-based Investment Products Regulations 20172are amended as follows.
(2) Omit regulation 3 (designation of competent authority).
(3) In regulation 6 (administrative penalties and statements), in paragraph (1)(a), for paragraph (i) substitute—
“(i)
“(i) the PRIIPs regulation,
(ia)
(ia) any EU regulation, originally made under the PRIIPs regulation, which is retained direct EU legislation,
(ib)
(ib) any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the PRIIPs regulation on or after exit day,”.
(4) In Schedule 1 (application and modification of the Financial Services and Markets Act 2000 and secondary legislation), in paragraph 3 (statements of policy), in sub-paragraph (b)(ii), for the inserted paragraph (d) substitute—
“(d)
“(d) the gravity and the duration of the infringement;
(e)
(e) the degree of responsibility of the person responsible for the infringement;
(f)
(f) the impact of the infringement on retail investors’ interests;
(g)
(g) the cooperative behaviour of the person responsible for the infringement;
(h)
(h) any previous infringements by the person responsible for the infringement;
(i)
(i) measures taken after the infringement by the person responsible for the infringement to prevent its repetition.”.
PART 3
Amendment of retained direct EU legislation
CHAPTER 1
Amendment of Regulation (EU) No 1286/2014
3. Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) is amended as follows.
Subject matter and scope
4.—(1) In Article 1—
(a)
(a) omit “uniform”;
(b)
(b) after “PRIIP manufacturers” insert “before PRIIPs are made available to retail investors in the United Kingdom”;
(c)
(c) after “the provision of the key information document to retail investors” insert “in the United Kingdom”;
(d)
(d) for “enable retail investors” substitute “enable them”.
(2) In Article 2—
(a)
(a) for paragraph 1 substitute—
“1. This Regulation applies to—
(a) PRIIP manufacturers in relation to PRIIPs which are, or are to be, made available to retail investors in the United Kingdom; and
(b) persons advising on, or selling, PRIIPs.”;
(b)
(b) in paragraph 2—
(i) in point (c), for “point (43) of Article 4(1) of Directive 2014/65/EU” substitute “point (23) of Article 2(1) of the markets in financial instruments regulation”;
(ii) for point (d) substitute—
“(d)
“(d) non-equity securities (as defined in point (c) of Article 2(1) of Directive 2003/71/EC) issued by—
(i) the United Kingdom, any part of the United Kingdom, or a third country;
(ii) a local authority in the United Kingdom or one of the regional or local authorities of a third country;
(iii) a public international body of which the United Kingdom or a third country is a member; or
(iv) the Bank of England, the European Central Bank or the central bank of a third country;
(da)
(da) shares in the capital of the Bank of England or of a central bank of a third country;
(db)
(db) securities (as defined in point (a) of Article 2(1) of Directive 2003/71/EC) unconditionally and irrevocably guaranteed by—
(i) the United Kingdom, any part of the United Kingdom, or a third country; or
(ii) a local authority in the United Kingdom or one of the regional or local authorities of a third country;
(dc)
(dc) securities (as defined in point (a) of Article 2(1) of Directive 2003/71/EC) issued by associations with legal status or non-profit-making bodies recognised by the United Kingdom, any part of the United Kingdom, or a third country with a view to their obtaining the means necessary to achieve their non-profit-making objectives;
(dd)
(dd) non-equity securities (as defined in point (c) of Article 2(1) of Directive 2003/71/EC) issued in a continuous or repeated manner (as defined in point (l) of Article 2(1) of that Directive) by credit institutions (as defined in point (g) of Article 2(1) of that Directive) provided that these securities—
(i) are not subordinated, convertible or exchangeable;
(ii) do not give a right to subscribe to or acquire other types of securities and are not linked to a derivative instrument;
(iii) materialise reception of repayable deposits;
(iv) are covered by the compensation scheme within the meaning of section 213(2) of FSMA or by a similar scheme in a third country;
(de)
(de) securities as referred to in points (g), (i) and (j) of Article 1(2) of Directive 2003/71/EC;”;
(iii) in point (e), for “national law” substitute “the law of the United Kingdom, any part of the United Kingdom, or a third country”;
(iv) in point (f), at the end insert “or as defined in section 1(1) of the Pension Schemes Act 19933”;
(v) in point (g), for “national law” substitute “the law of the United Kingdom, any part of the United Kingdom, or a third country”.
(3) For Article 3 substitute—
“Article 3.—(1) Where PRIIP manufacturers subject to this Regulation are also subject to the provisions of FSMA and any rules or regulations made under FSMA which were relied on immediately before exit day to implement Directive 2003/71/EC, both this Regulation and those provisions apply.
(2) Where PRIIP manufacturers subject to this Regulation are also subject to the provisions of FSMA and any rules or regulations made under FSMA which were relied on immediately before exit day to implement Directive 2009/138/EC, both this Regulation and those provisions apply.”.
Definitions
5.—(1) Article 4 is amended as follows.
(2) For point (5) substitute—
“5 ‘selling a PRIIP’ means—
(a) offering a PRIIP contract to a retail investor in the United Kingdom; or
(b) concluding a PRIIP contract with a retail investor in the United Kingdom;
5A ‘advising on a PRIIP’ means advising a retail investor in the United Kingdom on a PRIIP;”.
(3) In point (6), in the definition of “retail investor”, for points (a) and (b) substitute—
“(a)
“(a) a client (as defined in point (7) of Article 2(1) of the markets in financial instruments regulation) who is not a professional client;
(b)
(b) a customer, where that customer would not qualify as a professional client;”.
(4) After point (6) insert—
“6A ‘customer’ means a customer within the meaning of the provisions of FSMA and any rules or regulations made under FSMA which were relied on immediately before exit day to implement Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution4;
6B ‘professional client’ means a professional client as defined in point (8) of Article 2(1) of the markets in financial instruments regulation;”.
(5) For point (8) substitute—
“8 ‘FCA’ means the Financial Conduct Authority;
9 ‘third country’ means a country or territory outside the United Kingdom;
10 ‘FSMA’ means the Financial Services and Markets Act 2000;
11 ‘the markets in financial instruments regulation’ means Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012;
12 In this Regulation, a reference to a provision of rules made under FSMA is a reference to that provision as it has effect on exit day.”.
Drawing up the key information document
6. In Article 5—
(a) in paragraph 1, after “investors” insert “in the United Kingdom”;
(b) omit paragraph 2.
Form and content of key information document
7.—(1) In Article 7—
(a)
(a) in paragraph 1, in the first subparagraph, for the words from “shall be written” to the end substitute “must be written in English, or where it has been written in a different language, it must be translated into English”;
(b)
(b) omit paragraph 2.
(2) In Article 8—
(a)
(a) in paragraph 3(a), omit “information about the competent authority of the PRIIP manufacturer”;
(b)
(b) in paragraph 3(d)(v), for “retail investor’s home Member State” substitute “United Kingdom”;
(c)
(c) in paragraph 4, for the words from “Commission” to “specifying” substitute “Treasury may by Regulations specify”;
(d)
(d) in paragraph 5—
(i) in the first subparagraph, for the words from “ESAs” to “standards” substitute “FCA may make technical standards in accordance with Chapter 2A of Part 9A of FSMA5(“technical standards”)”;
(ii) in the second subparagraph, for the words from “developing” to “shall” substitute “making technical standards, the FCA must”;
(iii) omit the third and fourth subparagraphs.
(3) In...
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