Banking Reform Act secondary legislation—the Excluded Activities and Prohibitions Order
Banking Reform Act secondary legislation—the Excluded Activities and Prohibitions Order

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Banking Reform Act secondary legislation—the Excluded Activities and Prohibitions Order
  • What are the ‘excluded activities’?
  • Dealing in investments as principal
  • Commodities trading
  • What are the exemptions from the excluded activities?
  • The derivatives exemption—products, market risk and gross cap
  • Product types
  • Limits on derivative risk-the market risk cap
  • Limits on derivative portfolio size—the gross cap
  • The exemption allowing securitisation of own assets
  • More...

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

Secondary legislation relating to the Financial Services Banking Reform Act 2013 (FS(BR)A 2013) is the principal means through which ring-fencing has been imposed on the UK banking system. This Practice Note considers the provisions of the Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014, SI 2014/2080 (EAP Order 2014). Once it is established that a bank must implement a ring-fence, FS(BR)A 2013 stipulates that ring-fenced banks may not carry on excluded activities. FS(BR)A 2013 creates one excluded activity (the regulated activity of dealing in investments as principal) and the EAP Order 2014 sets out the detail of additional excluded activities (commodities trading). The EAP Order 2014 creates a number of exemptions to the excluded activities and prohibitions. This Practice Note focuses on the excluded activities and exemptions.

The FS(BR)A 2013, which received Royal Assent on 18 December 2013, has eight parts and ten schedules. FS(BR)A 2013, Pt 1 refers to the

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