The Treasury enacted these Regulations using powers under the Financial Services and Markets Act 2023 to amend the Financial Services and Markets Act 2023 (Commencement No. 10 and Saving Provisions) Regulations 2025.
The primary goal is to modify how permissions granted by the Prudential Regulation Authority (PRA) under provisions of the Capital Requirements Regulation are treated after their scheduled revocation takes effect on January 1st, 2026, by ensuring certain permissions continue to have effect under relevant sections of the Financial Services and Markets Act 2000 (FSMA 2000) and preserving the PRA’s power to update related delegated technical standards.
Arguments For
Ensures continuity for certain regulatory permissions granted by the Prudential Regulation Authority (PRA) under previous EU legislation (Capital Requirements Regulation) as the UK transitions its regulations.
Provides a mechanism, via the continuation of Article 33(4) of the Capital Requirements Regulation, for the PRA to maintain the ability to amend or revoke specific delegated technical standards, allowing for necessary post-Brexit regulatory adjustments.
Minimises disruption to financial institutions by preserving the effect of permissions granted before January 1st, 2026, ensuring regulatory stability during the transition period.
Arguments Against
Introduces complexity by maintaining specific carve-outs and saving provisions from previously revoked EU law, potentially complicating the interpretation of the wholly UK-based regime established by FSMA 2023.
The amendment modifies provisions related to Commencement No. 10 Regulations, suggesting that the initial commencement or saving arrangements were incomplete or required post-facto adjustment.
The explanatory note indicates no significant impact assessment was deemed necessary, which could suggest a failure to fully evaluate the downstream effects of altering these transitional provisions on industry compliance burdens.
The Treasury make these Regulations in exercise of the powers conferred by section 86(5) and (6) of the Financial Services and Markets Act 2023 .
The Treasury created these Regulations by exercising powers specifically given to it under subsections (5) and (6) of section 86 of the Financial Services and Markets Act 2023 (FSMA 2023).
- Citation and commencement
(1) These Regulations may be cited as the Financial Services and Markets Act 2023 (Commencement No. 10 and Saving Provisions) (Amendment) Regulations 2025.
(2) These Regulations come into force on the day after the day on which they are made.
This first regulation outlines how the instrument is formally named: The Financial Services and Markets Act 2023 (Commencement No. 10 and Saving Provisions) (Amendment) Regulations 2025.
The rules become legally effective the day immediately following the date they are officially made.
- Amendment of the Financial Services and Markets Act 2023 (Commencement No. 10 and Saving Provisions) Regulations 2025
(1) The Financial Services and Markets Act 2023 (Commencement No. 10 and Saving Provisions) Regulations 2025 are amended as follows.
(2) For regulation 6 substitute—
“Saving provision for permissions granted under the Capital Requirements Regulation
- (1) Despite the revocations brought into force by regulation 4—
(a) any permission granted by the PRA under the following provisions of the Capital Requirements Regulation at any time before 1st January 2026, has effect, on and after 1st January 2026, as if granted under section 138BA (disapplication or modification of rules in individual cases) of FSMA 2000—
(i) Article 26(3);
(ii) Article 31(1);
(iii) Article 41(1);
(iv) Article 73(1);
(v) Article 76(2);
(vi) Article 77(1);
(vii) Article 78(1);
(b) any permission granted by the PRA under Article 26(2) of the Capital Requirements Regulation at any time before 1st January 2026 has effect, on and after 1st January 2026, as if it were a notification for the purpose of paragraph 2 of Article 26 of the Own Funds (CRR) Part of the PRA rulebook.
(2) In paragraph (1)(b), “PRA rulebook” means the rulebook published by the PRA containing rules made by that Authority under FSMA 2000 as it has effect on 1st January 2026.”.
(3) After regulation 6 (as substituted by these Regulations) insert—
“Saving for the PRA’s power to amend and revoke Commission Delegated Regulation (EU) No. 523/2014
- Despite its revocation brought into force by regulation 4, Article 33(4) of the Capital Requirements Regulation continues to have effect, on and after 1st January 2026, so far as is necessary to enable the PRA to amend or revoke Commission Delegated Regulation (EU) No. 523/2014 of 12 March 2014 supplementing Regulation (EU) No. 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for determining what constitutes the close correspondence between the value of an institution’s covered bonds and the value of the institution’s assets.”.
This section amends the previous commencement regulations by replacing regulation 6 entirely.
The new regulation 6 ensures that specific permissions granted by the Prudential Regulation Authority (PRA) under various articles of the Capital Requirements Regulation (CRR) before January 1, 2026, remain effective afterward, treating them as if they were granted under section 138BA of FSMA 2000.
Specifically, it saves permissions under Article 26(3), 31(1), 41(1), 73(1), 76(2), 77(1), and 78(1) of the CRR. It also treats permissions under Article 26(2) as notifications under the PRA rulebook concerning Own Funds (CRR).
Furthermore, a new regulation 7 is inserted.
This preserves Article 33(4) of the CRR after revocation, enabling the PRA to retain the authority to amend or revoke Commission Delegated Regulation (EU) No. 523/2014, which relates to regulatory technical standards for covered bonds, even after January 1, 2026.