Instruments of interest
Draft Short Selling (Amendment) (EU Exit) Regulations 2018
12.In the Explanatory Memorandum (EM) to these Regulations, HM Treasury (HMT) says that the instrument addresses deficiencies in retained EU law in relation to short selling–the selling of securities that are either borrowed or not owned by the seller–arising from the withdrawal of the UK from the EU, ensuring that the legislation continues to operate effectively at the point at which the UK leaves the EU. The retained EU law is the Regulation on short selling and certain aspects of credit default swaps (Council Regulation (EU) 236/2012 (“the SSR”), and Commission Delegated Regulation 918/2012/EU). The Regulations also amend Part 8A of the Financial Services and Markets Act 2000, in relation to provisions setting out the powers of the Financial Conduct Authority (FCA) for the purpose of exercising its functions under the SSR. In our view, the EM as originally laid gave insufficient detail of the changes being made, and did not present a full enough picture of their effect. We wrote to the Economic Secretary to the Treasury about this, and have received a reply in which the Minister undertakes that the EM will be revised and relaid in the light of our concerns. We are publishing the correspondence at Appendix 2.
Return of Cultural Objects (Revocation) (EU Exit) Regulations 2018 (SI 2018/1086)
13.Current domestic law (which implements an EU Directive) provides for the return of cultural objects that have been unlawfully removed from the territory of an EU Member State, making exemptions for historic cases. These Regulations remove the UK’s obligations to cooperate with Member States on the return of unlawfully removed cultural objects. The Department for Digital, Culture, Media and Sport (DCMS) has explained in the Explanatory Memorandum that this “avoids a one-sided obligation upon the UK to return cultural objects, whilst unable to enjoy reciprocal rights” because after exit day, Member States will no longer need to return objects unlawfully exported from the UK. DCMS has further explained that their “preferred solution is to reach a new agreement with the EU to preserve the current restitution arrangements” so these Regulations are “a fall-back option in the event of a ‘no deal’”.