12.Central Securities Depositories (CSDs) are financial market infrastructures which keep a record of who owns individual securities, such as shares or bonds. In the Explanatory Memorandum to this instrument, HM Treasury (HMT) says that the Central Securities Depositories Regulation (CSDR) of 2014 created a common authorisation, supervision and regulatory framework for CSDs across the EU, harmonising the timing and conduct of securities settlement in the EU and the rules governing the authorisation and operation of CSDs. HMT explains that the instrument makes amendments to ensure that the CSDR operates effectively after the UK withdraws from the EU. The amendments include: transferring the equivalence and recognition functions to relevant UK authorities; technical changes to the CSDR to ensure that the UK retains an operative regulatory framework for CSDs; and a transitional regime so that third country CSDs can continue to provide services relating to the UK after exit.
13.Among the transfer of various functions currently held by the European Securities and Markets Authority to the appropriate UK authorities are powers to recognise third country CSDs, which are being transferred to the Bank of England (“the Bank”). Third country CSDs will now be required to notify the Bank before exit day of their intention to provide services in the UK following exit, under the transitional arrangements. We obtained additional information from HMT about the likely numbers of such notifications, and the capacity of the Bank to deal with them, which we are publishing at Appendix 2.
14.These draft Regulations propose corrections to retained EU law to ensure that the UK can continue to be a member of a European Research Infrastructure Consortium (ERIC) if it wishes to after leaving the EU. The Department for Business, Energy and Industrial Strategy (BEIS) explains that ERICs are set up to deliver major international science and research collaborations in the EU which are beyond the resources and expertise of a single country. While ERICS are governed by EU law, they are funded by ERIC members themselves and not the EU budget, enabling non-EU countries to be members on equal terms to EU Member States. The Minister for Universities, Science, Research and Innovation has written to provide further information on the draft Regulations, including that the UK currently hosts two ERICS and is a member of a further nine ERICs, covering areas such as marine science, astrophysics, human health, welfare and societal change. The Minister also explains that should the UK chose to continue to participate in ERICs after leaving the EU, there will be a continued but limited role for the Court of Justice of the European Union (CJEU) in the UK, mainly in giving an opinion on whether the UK is complying with ERIC rules. The Minister says that the CJEU will not be able to directly impose EU law on the UK or impose any penalty on the UK for being in breach of EU law on ERICs. We are publishing the letter at Appendix 3.
15.In the case of a “no deal Brexit” the provisions of the Tobacco Products and Tobacco Advertising Directives will fall. These Regulations make alternative arrangements. In particular, they require tobacco packaging to use the health warning images currently used in Australia in place of the EU set, and manufacturers will have a transitional period of 12 months to use up their existing stocks. A letter from Japan Tobacco International is published on our website setting out a number of logistical difficulties with the timetable set out in these Regulations. The Department of Health and Social Care is, however, constrained by the Brexit deadline (although has said that, if an implementation period were agreed, the current provisions might be subject to review). The Regulations also set up a new UK-based system for the notification of new tobacco products (which checks the ingredients and emissions). Following EU Exit there will no longer be an obligation on EEA member states to prohibit their tobacco companies from advertising in the UK (although UK domestic legislation will prevent this). This instrument also removes the reciprocal prohibition that prevents UK tobacco companies from advertising in the EEA. Because regulations made under the EU (Withdrawal) Act 2018 can only deal with the deficiencies in the statue book caused by withdrawing from the EU, this instrument does not alter the regulatory regime for e-cigarettes.
16.In the Explanatory Memorandum to these Regulations, the Ministry of Defence (MOD) says that where a complaint or allegation about the conduct of an MOD Police (MDP) officer comes to light after that officer has left the MDP, no action can currently be taken; and where an officer retires or resigns during an investigation or after proceedings have been started, nothing further can be done under current disciplinary procedures. It adds that a perception that officers who have committed serious wrongdoing can avoid accountability through resignation or retirement has caused damage to public confidence. These Regulations will enable disciplinary proceedings to be taken against former MDP members, allowing allegations to be investigated and former officers to be referred to disciplinary hearings.
17.MOD says that the changes being made in relation to former MDP officers follow those already made by the Home Office (HO) for former police officers in England and Wales: its policy is to have equivalent disciplinary procedures for MDP officers to those introduced by the HO. The HO gave effect to those changes through the Police (Conduct, Complaints and Misconduct and Appeal Tribunal) (Amendment) Regulations 2017, about which the SLSC published information in the 12th Report of this Session.
2 Regulation (EU) No. 909/2014 on improving securities settlement in the European Union and on central securities depositories.
3 Directive 2014/40/EU (the ‘Tobacco Products Directive’) and Directive 2003/33/EC (the ‘Tobacco Advertising Directive’).
4 The Police (Conduct, Complaints and Misconduct and Appeal Tribunal) (Amendment) Regulations 2017 ().
5 , Session 2017–19 (HL Paper 45).