While it remains an EU member state, the UK also has to comply with financial regulations that are determined by the EU Parliament, in Brussels. HM Treasury and the BoE are responsible for ensuring that regulated firms in the UK financial sector are compliant with such regulations.
A notable example of such rules is those which are known, collectively, as Solvency II
, promulgated, today, by EIOPA (European Insurance and Occupational Pensions Authority).
Following the UK’s decision to leave the EU, as a result of the Referendum held on 23 June 2016, the regulatory framework described above will change. The UK Government triggered Article 50
of the Treaty on European Union (the” Lisbon Treaty”) on 29 March 2017.
Article 50 allows a member state to notify the EU of its withdrawal and obliges the EU to try to negotiate a “withdrawal agreement” with that state.
The time-frame allowed in Article 50 is two years. This deadline can only be extended by unanimous agreement from all EU countries.
If no agreement is reached in two years, and no extension is agreed, the UK automatically leaves the EU and all existing agreements would cease to apply to the UK. If that happens, Brexit Day
would be Friday, 29 March 2019.
Accordingly, all references to the current regulatory framework in this iNED Information Bank continue to regard the UK as having to comply with financial regulations that are determined by the EU Parliament.
As regulatory changes that affect NEDs are introduced, they will be explained and featured in this Information Bank.
Of recent interest, in April 2017, Sam Woods, CEO of the PRA, wrote to all regulated firms in the financial services sector asking their Boards of Directors to confirm their contingency plans for the UK’s withdrawal from the European Union. This letter can be accessed via this attachment