Investment Funds Update - Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - December 2016 - Issue 10: United Kingdom

by Dechert LLP

Dechert LLP

Brexit - House of Commons Library Publishes Briefing Paper on the "Great Repeal Bill"

The House of Commons Library published a briefing paper on 21 November 2016 on Legislating for Brexit, including in particular on the “Great Repeal Bill” to repeal the European Communities Act 1972.

The briefing paper considers issues likely to be raised by the Bill, including:

  • the extent to which directly applicable EU legislation, such as EU Regulations, will be transposed into UK law;
  • the scope and mechanics of any delegated powers enabling ministers to give effect to the outcome of withdrawal negotiations;
  • the extent to which transposing all directly applicable EU law would require consent from the devolved administrations, provided the Sewel Convention (under which the UK Parliament would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament) is respected.

The Bill is to include delegated powers to enable the government to adapt any EU-related legislation as appropriate. The House of Commons Library has estimated that 13% of UK primary and secondary legislation enacted between 1993 and 2004 was EU related, and the review of this may constitute one of the largest legislative projects ever undertaken in the UK.

Read a summary of the briefing.

Separately on 22 November 2016, the Department for Exiting the European Union published a list of answers to frequently asked questions about the UK's departure from the EU.

The list answers questions relating to last June’s referendum on exiting the EU, including a government assurance that a second referendum will not take place, and questions on the process by which Article 50 of the Treaty on European Union will be activated, with reference to the Supreme Court case (heard between 5 and 8 December 2016) which will decide whether a parliamentary vote will be required to trigger Article 50. The Supreme Court decision is expected in the New Year.

Read the Q&As in full.

FCA Confirms it will not Issue Proportionality Guidance for UCITS V Remuneration - Refers Firms to its AIFMD Remuneration Guidance

On 18 November 2016, the FCA updated its webpage on the UCITS Remuneration Code (SYSC 19E) to announce that it does not intend to issue guidance for firms on how to apply the Code.

However, the FCA points out that there are many points of correspondence between the remuneration requirements of the UCITS V Directive (2014/91/EU) and the AIFMD (2011/61/EU), and between the ESMA guidelines applicable to each Directive, which firms may want to review.

The FCA states that UCITS management companies may find it useful to consider the principles in the FCA's existing AIFMD guidance to understand its expectations for their remuneration policies and practices. For information on the AIFMD Remuneration Code see chapter 19B of the FCA's Systems and Controls sourcebook (SYSC), which includes the FCA's guidance on the Code.

FCA Issues Statement on the Delayed PRIIPs Regulation

The FCA updated its webpage on 22 November 2016 on key information documents (KIDs) under the PRIIPS Regulation (the EU Regulation for packaged retail and insurance-based investment products (Regulation 1286/2014)) to confirm that it will publish its policy statement on changes to its disclosure rules in the first half of 2017.

The FCA had consulted on its proposed changes to its disclosure rules to reflect the direct application of the PRIIPs Regulation in July 2016 (CP16/18). The FCA initially stated that it intended to publish its policy statement and final rules in November 2016, to tie in with the Regulation's original application date of 31 December 2016. However, implementation of the Regulation is now likely delayed until 1 January 2018, and the FCA therefore explained that the changes to its rules are expected to apply from that date instead.

Read the FCA PRIIPs disclosure in full.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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