My Lords, there is much that I would support in the intervention by the noble Lord, Lord Sharkey. I particularly like the way he sneaked in the fact that he got to page 41 of the IA.
The first instrument is on an area that I knew little about before I read it. With that limitation, it seems generally to make sense. It is clear about the transfer of functions, who will be responsible for equivalence decisions and information exchange—data comes over with a discretionary relationship. It is clear that the object of the exercise—at least this is how I read the Explanatory Memorandum—is to retain the discipline of EMIR. In view of its importance, I was surprised that a UK name for EMIR was not created, as was
done in a previous SI, so that we would all know what we were talking about, given that the E in EMIR stands for Europe.
Going a little way into the detail, as the noble Lord pointed out, paragraph 7.16 allows a reporting obligation to be suspended for one year. From what I understand of the overall regime that this is part of, its very essence is open reporting of transactions. That is what the G20 came up with to create this regime. Will the Minister give us some feel for what risks are being taken by Part 2 of the instrument, which creates an opportunity for reporting to be suspended for up to one year? It also has what seems a fairly reasonable exemption for intragroup activity. It is a classic three years, plus however often the Treasury wants to extend it. It also has an exemption for energy derivative contracts up to 3 January 2021, but I could not see where that date came from; perhaps it is something to do with an international agreement.
5.45 pm
In paragraph 7.22, the instrument introduces or changes some criminal offences. I looked back at the document that enables this, the European Union (Withdrawal) Act 2018. I assume this is being done under Section 8, under which most of this is being done. Section 8(7) states,
“regulations under subsection (1) may not … create a relevant criminal offence”.
I would therefore like some assurance from the Minister that the changes outlined in paragraph 7.22 are legally correct.
The essence of the financial markets and insolvency regulations is to prevent clawback in insolvency situations, which is presently automatic for non-UK EEA members. This will fall away on exit day, but this SI gives the Bank of England power to designate, and there is a temporary designation regime with the traditional format of three years and 12 months. However, does this create an asymmetric situation? Do UK firms participating in EEA countries receive the same protection?