Exiting The European Union PART 1 General Citation and commencement 1 1 These Regulations may be cited as the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019. 2 These Regulations come into force on exit day. Interpretation 2 In these Regulations— “ FSMA 2000 ” means the Financial Services and Markets Act 2000 ; “ the FCA ” means the Financial Conduct Authority. PART 2 Amendments of primary legislation CHAPTER 1 The Financial Services and Markets Act 2000 Introduction 3 FSMA 2000 is amended as follows. Part 6 rules 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applications for listing 5 In section 75 (applications for listing), in subsection (6), for “officially listed in another EEA State” substitute “ listed in a country or territory outside the United Kingdom ” . Matters which may be dealt with by prospectus rules 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prohibition of dealing etc in transferable securities without approved prospectus 7 In section 85 (prohibition of dealing etc in transferable securities without approved prospectus), in subsection (7), for the words from “competent authority” to the end substitute “ FCA ” . Exempt offers to the public 8 1 Section 86 (exempt offers to the public) is amended as follows. 2 In subsection (1)— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b in paragraph (e), for “in the EEA States” substitute “ in the United Kingdom ” . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 In subsection (2), for “point (1) of Section I of Annex II to the markets in financial instruments directive” substitute “ paragraph 3(a) of Schedule 1 to the markets in financial instruments regulation ” . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Election to have prospectus 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Criteria for approval of prospectus by FCA 10 1 Section 87A (criteria for approval of prospectus by FCA) is amended as follows. 2 In subsection (1)— a omit paragraph (a); b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In subsection (2A), omit “EEA”. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Procedure for decision on application for approval 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repeal of sections 87E and 87F 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repeal of section 87FB 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repeal of sections 87H and 87I 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to suspend or prohibit offer to the public 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to suspend or prohibit admission to trading on a regulated market 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public censure of issuer 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repeal of section 87P 18 Omit section 87P (exercise of powers at request of competent authority of another EEA State). Transparency rules 19 1 Section 89A (transparency rules) is amended as follows. 2 For subsection (1) substitute— 1 The FCA may make rules— a imposing requirements in relation to the disclosure of periodic or ongoing information about issuers whose securities are admitted to trading on a regulated market, and b dealing with matters arising out of or relating to such requirements. . 3 In subsection (2), after “any matters” insert “ dealt with in the transparency obligations directive or with any matters that, when the United Kingdom was a member State, would have been matters ” . 4 After subsection (4) insert— 4A The provision that may be made by virtue of subsection (4)(g) includes (but is not limited to) provision, in the case of an issuer whose registered office is situated in a country or territory outside the United Kingdom, allowing exemption from specified provisions of rules under this section if— a the law of that country or territory is considered by the FCA to lay down equivalent requirements, or b the issuer complies with the requirements of the law of a country or territory that the FCA considers as equivalent. . Provision of voteholder information 20 1 Section 89B (provision of voteholder information) is amended as follows. 2 In subsection (4), for the words from “person” to the end substitute “ person in accordance with the following provisions ” . 3 In subsection (5), omit “under subsection (4)(b)”. Provision of information by issuers of transferable securities 21 1 Section 89C (provision of information by issuers of transferable securities) is amended as follows. 2 In subsection (2), for paragraphs (a) and (aa) (except the final “and”) substitute— a an annual financial report which complies with subsection (5) and with such other requirements as may be specified; aa in the case of an issuer which is— i a mining or quarrying undertaking, or ii a logging undertaking, reports complying with specified requirements on payments to governments; . 3 In subsections (3) and (4)(a), for “information required by Article 5 of the transparency obligations directive” substitute “ a half-yearly financial report which covers the first 6 months of the financial year and complies with subsection (6) and with such other requirements as may be specified ” . 4 After subsection (4) insert— 5 An issuer's annual financial report must include— a audited financial statements complying with specified requirements, b a management report complying with specified requirements, and c statements which— i relate to the financial statements and the management report, ii are made by the persons responsible within the issuer, and iii comply with specified requirements. 6 An issuer's half-yearly financial report must include— a a condensed set of financial statements complying with specified requirements, b an interim management report complying with specified requirements, and c statements which— i relate to the condensed set of financial statements and the interim management report, ii are made by the persons responsible within the issuer, and iii comply with specified requirements. 7 In subsection (2)(aa), “ mining or quarrying undertaking ”, “ logging undertaking ”, “ payment ” and “ government ” have the same meanings as in the Reports on Payments to Governments Regulations 2014 . 8 In this section “ specified ” means specified in, or referred to in, transparency rules. . Notification of voting rights held by issuer 22 1 Section 89D (notification of voting rights held by issuer) is amended as follows. 2 In subsection (1), for the words from “the issuer” to the end substitute “ the issuer in accordance with the following provisions ” . 3 In subsection (2), omit “under subsection (1)(b)”. Transparency rules: interpretation etc 23 In section 89F (transparency rules: interpretation etc), after subsection (1) insert— 1A The FCA must establish, publish and periodically update an indicative list of financial instruments that are subject to notification requirements by virtue of subsection (1)(b)(iii), taking into account developments on financial markets. 1B Publication of the indicative list is to be in such manner as the FCA considers appropriate. . Public censure of issuer 24 1 Section 89K (public censure of issuer) is amended as follows. 2 In subsection (5), for the words from “under” to the end substitute “ under qualifying transparency legislation ” . 3 After subsection (5) insert— 5A In this Part “ qualifying transparency legislation ” means— a transparency rules, b any EU regulation, originally made under the transparency obligations directive, that is retained direct EU legislation, c regulations made by the Treasury under regulation 71 of the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 for a purpose specified in paragraphs 10 to 20 of Schedule 2 to those Regulations, or d technical standards made by the FCA under regulation 72 of those Regulations for a purpose specified in paragraphs 31 to 35 of that Schedule. . 4 Omit subsection (6). Power to suspend or prohibit trading of securities 25 1 Section 89L (power to suspend or prohibit trading of securities) is amended as follows. 2 In subsection (3), for the words from “a provision” to “directive” substitute “ an applicable transparency obligation ” . 3 In subsection (5), for the words from “under” to the end substitute “ under qualifying transparency legislation ” . 4 Omit subsection (6). Voting rights suspension orders 26 In section 89NA (voting rights suspension orders) , in subsection (11), in the definition of “relevant transparency provision”— a in paragraph (a), for “implements” substitute “ implemented ” ; b omit the “or” at the end of paragraph (a); c for paragraph (b) substitute— b a provision, originally made under any of those Articles, that is retained direct EU legislation, c a provision of regulations made by the Treasury under regulation 71 of the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 for a purpose specified in paragraphs 13 to 16 of Schedule 2 to those Regulations, or d a provision of technical standards made by the FCA under regulation 72 of those Regulations for a purpose specified in paragraphs 32 to 35 of that Schedule. . Corporate governance rules 27 1 Section 89O (corporate governance rules) is amended as follows. 2 For subsection (1) substitute— 1 The FCA may make rules (“ corporate governance rules ”) relating to the corporate governance of issuers who have requested or approved admission of their securities to trading on a regulated market. . 3 Omit subsections (3) and (4). Storage of regulated information 28 1 Section 89W (storage of regulated information) is amended as follows. 2 In subsection (1), omit the words from “meeting” to the end. 3 After that subsection insert— 1A The mechanism must comply with minimum quality standards of security, certainty as to the information source, time recording and easy access by end users (see provision made under regulation 71 of the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 for the purpose specified in paragraph 19(b) of Schedule 2 to those Regulations). 1B The mechanism must be aligned with the procedure for filing the regulated information with the FCA. . 4 For subsection (2) substitute— 2 In this section “ regulated information ” means information which an issuer, or a person who has applied for the admission of securities to trading on a regulated market without the issuer's consent, is required to disclose under— a listing rules, b qualifying transparency legislation, or c Articles 17 to 19 of the market abuse regulation. . Liability for key investor information 29 In section 90ZA (liability for key investor information) , for “implementing” substitute “ originally made in implementation of ” . Penalties for breach of Part 6 rules 30 1 Section 91 (penalties for breach of Part 6 rules) is amended as follows. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In subsection (1B)(a)(i) , for the words from “transparency rules” to “directive” substitute “ qualifying transparency legislation ” . Appointment by FCA of persons to carry out investigations 31 In section 97 (appointment by FCA of persons to carry out investigations), in subsection (1)— a in paragraph (a), for sub-paragraph (ii) (including the “or” at the end) substitute— ii any other provision of qualifying transparency legislation, or ; b in paragraph (b), for sub-paragraph (ii) (including the “or” at the end) substitute— ii any other provision of qualifying transparency legislation, or ; c in paragraph (ba) , for the words from “by that person of” to the end substitute “ by that person of qualifying transparency legislation; ” . Repeal of section 100A 32 Omit section 100A (exercise of powers where UK is host member state) . Meaning of “securities” etc. 33 1 Section 102A (meaning of “securities” etc.) is amended as follows. 2 In subsection (3), for “directive”, in both places where it occurs, substitute “ regulation ” . 3 For subsection (3A) substitute— 3A “ Debt securities ” means bonds or other forms of transferable securitised debts, with the exception of— a transferable securities which are equivalent to shares, and b transferable securities which, if converted or if the rights conferred by them are exercised, give rise to a right to acquire— i shares, or ii transferable securities equivalent to shares. . 4 In subsection (4), for the words from “has” to the end substitute “ means those instruments specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ” . 5 For subsection (5) substitute— 5 “ Non-equity transferable securities ” means all transferable securities that are not equity securities; and for this purpose the following are “equity securities”— a shares, b other transferable securities which are equivalent to shares, and c transferable securities which— i are within neither of paragraphs (a) and (b), ii give the right to acquire securities within paragraph (a) or (b) if converted or if the rights conferred by them are exercised, and iii are issued by the issuer of the underlying shares or by an entity belonging to the group of that issuer. . Meaning of “offer of transferable securities to the public” etc. 34 1 Section 102B (meaning of “offer of transferable securities to the public” etc.) is amended as follows. 2 In subsection (5)(a), after “a regulated market” insert “ , as defined in Article 2(1)(13) of the markets in financial instruments regulation ” . 3 For subsection (6) substitute— 6 “ Multilateral trading facility ” has the same meaning as in the markets in financial instruments regulation (see Article 2(1)(14) of that Regulation) . . Repeal of section 102C 35 Omit section 102C (meaning of “ home State ” in relation to transferable securities). Interpretation of Part 6 of FSMA 2000 36 In section 103 (interpretation of Part 6), in subsection (1)— a after the definition of “prospectus rules” insert— ... “ qualifying transparency legislation ” has the meaning given in section 89K(5A); ; b for the definition of “regulated market” substitute— “regulated market” (except in section 102B and Schedule 10A) means a UK regulated market, as defined in Article 2(1)(13A) of the markets in financial instruments regulation ; . Liability of issuers in connection with published information 37 1 Schedule 10A (liability of issuers in connection with published information) is amended as follows. 2 In paragraph 1, for sub-paragraph (3) substitute— 3 For the purposes of this Schedule the United Kingdom is the home State of an issuer if— a the transparency rules impose requirements on the issuer in relation to the securities, or b the issuer has its registered office (or, if it does not have a registered office, its head office) in the United Kingdom. . 3 In paragraph 2(4)— a in paragraph (a)— i for “EEA” substitute “ United Kingdom ” ; ii for “Article 21 of the transparency obligations directive” substitute “ transparency rules ” ; b in paragraph (b)— i for “EEA” substitute “ United Kingdom ” ; ii for “that directive” substitute “ transparency rules ” . 4 In paragraph 8— a in sub-paragraph (1)— i for paragraph (a) substitute— a “ securities ” means transferable securities as defined in Article 2(1)(24) of the markets in financial instruments regulation, other than money market instruments as defined in Article 2(1)(25A) of that regulation that have a maturity of less than 12 months (and includes instruments outside the United Kingdom); ; ii in paragraph (b), for sub-paragraphs (i) to (iii) substitute— i a regulated market as defined in Article 2(1)(13) of the markets in financial instruments regulation, or ii a multilateral trading facility as defined in Article 2(1)(14) of that regulation. b omit sub-paragraph (6)(b). Transferable securities excluded from certain provisions of section 85 of FSMA 2000 38 1 Schedule 11A (transferable securities) is amended as follows. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 In paragraph 7, omit sub-paragraph (2)(e). 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 2 The Companies Act 2006 Repeal of section 1273 of the Companies Act 2006 39 Omit section 1273 of the Companies Act 2006 (corporate governance regulations). PART 3 Amendments of EU Regulations and EU Decision CHAPTER 1 Amendments of Commission Regulation (EC) No. 809/2004 ... 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 2 Amendments of other EU Regulations and of EU Decision Commission Regulation (EC) No 1569/2007 67 1 Commission Regulation (EC) No 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council is amended as follows. 2 In Article 1 (subject matter)— a after “considered” insert “ for the specified purposes as ” ; b for the words from “International” to “IFRS)” substitute “ UK-adopted international accounting standards ” ; c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In Article 2 (equivalence)— a after “considered” insert “ for the specified purposes as ” ; b for the words from “IFRS adopted” to “No 1606/2002” substitute “ UK-adopted international accounting standards ” ; c for “in accordance with IFRS” substitute “ in accordance with UK-adopted international accounting standards ” . 4 In Article 3 (equivalence mechanism)— a in the first paragraph— i for “Commission” substitute “ Treasury ” ; ii for “competent authority of a Member State” substitute “ Financial Conduct Authority ” ; b for the second paragraph substitute— Before making a determination of equivalence, the Treasury must consult the Secretary of State. A determination of equivalence is to be made by the Treasury by regulations made by statutory instrument. . 5 After Article 3 insert— Article 3A Treasury regulations under Article 3 1 Regulations made by the Treasury under Article 3 may— a contain incidental, supplemental, consequential and transitional provision, b make different provision for different purposes, and c amend or revoke Commission Decision (EC) No 2008/961 on the use by third countries' issuers of securities of certain third country's national accounting standards and International Financial Reporting Standards to prepare their consolidated financial statements. 2 A statutory instrument containing regulations made by the Treasury under Article 3 is subject to annulment in pursuance of a resolution of either House of Parliament. . 6 Omit Article 4 (conditions for the acceptance of third country accounting standards for a period ending no later than 31 March 2016). 7 Omit Article 5 (entry into force and application). Commission Decision (EC) No 2008/961 68 1 Commission Decision (EC) No 2008/961 of 12 December 2008 on the use by third countries' issuers of securities of certain third country's national accounting standards and International Financial Reporting Standards to prepare their consolidated financial statements is amended as follows. 2 In Article 1— a in the first paragraph— i for the words from the beginning to “No 1606/2002:”, in the second place where it occurs, substitute “ From IP completion day , with regard to annual consolidated financial statements and half-yearly consolidated financial statements, the following standards are to be considered as equivalent to UK-adopted international accounting standards: ” ; ii after point (c) insert— d International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of International Accounting Standards, as it applies in the European Union. ; b in the second paragraph, for the words from the beginning to “No 1606/2002:” substitute “ From IP completion day , with regard to annual consolidated financial statements and half-yearly consolidated financial statements, the following standards are to be considered as equivalent to UK-adopted international accounting standards: ” ; c omit the paragraph beginning “Third country issuers”; d at the end insert— In this Decision “ third country ” means a country outside the United Kingdom. . 3 Omit Article 1a. 4 Omit Articles 2 and 3. European Parliament and Council Regulation (EU) 2017/1129 69 In Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC , omit Article 3(2). PART 4 Transfer of directive functions to the Treasury or the FCA Interpretation of Schedule 2 70 Part 1 of Schedule 2 contains interpretative provisions for the purposes of that Schedule. Transfer of directive functions to the Treasury 71 1 The Treasury may make regulations for the purposes specified in Part 2 of Schedule 2. 2 The power to make regulations conferred on the Treasury by this regulation is exercisable by statutory instrument. 3 The regulations may— a contain incidental, supplemental, consequential and transitional provision, and b make different provision for different purposes. 4 A statutory instrument containing regulations under this regulation is subject to annulment in pursuance of a resolution of either House of Parliament. Transfer of directive functions to the FCA 72 The FCA may make technical standards for the purposes specified in Part 3 of Schedule 2. PART 5 Transitional provision Prospectus approved before 21st July 2019 by competent authority of other EEA state 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rebecca Harris Craig Whittaker Two of the Lords Commissioners of Her Majesty's Treasury