New regulatory powers Financial Market Infrastructure: general rules and requirements Regulation of FMI by the Bank of England The existing statutory framework for the Bank’s regulation of CCPs and CSDs
The Bank was incorporated by Royal Charter in 1694. As a chartered corporation, it is an entirely statutory entity, with its powers determined by reference to the 1694 Charter, subsequent Charters and various pieces of primary and secondary legislation. In particular, the Bank of England Act 1946 brought the Bank of England’s capital stock into public ownership and made provision concerning the relationship between the Bank, HM Treasury and other banks, and the Bank of England Act 1998 (as amended over time, in particular by the Banking Act 2009, Financial Services Act 2012 and the Bank of England and Financial Services Act 2016) makes more detailed provision about the constitution, regulation, financial arrangements and functions of the Bank. Section 2A of the Bank of England Act 1998 contains the Bank’s Financial Stability Objective, which applies to the Bank in its regulation of CCPs and CSDs, as in its other responsibilities. This objective requires the Bank to protect and enhance the stability of the financial system of the United Kingdom.
	Part 18 of FSMA 2000 establishes a recognition regime for certain types of financial market infrastructure, including CCPs and CSDs that are established in the UK. The recognition regime for CCPs and CSDs is operated by the Bank, and recognised firms are subject to supervision by the Bank. Firms that are recognised are exempt from the general prohibition in FSMA 2000 in respect of the regulated activities they carry out, and hence are exempt from the requirement to obtain permission to carry on regulated activities under Part 4A of that Act.
	The requirements of the recognition regime are set out in Part 18 of FSMA 2000 and supplemented by Schedule 17A to that Act which applies various provisions to the FCA and the PRA to the Bank when performing functions under Part 18. In particular, Part 18 and Schedule 17A give the Bank limited powers to make rules which apply to CCPs and CSDs, at section 166(9) (applied by paragraph 12 Sch 17A), section 286(4F) and section 293. Paragraph 10 of Schedule 17A applies a number of provisions in Part 9A of FSMA 2000 to rules made by the Bank, including the requirement to notify rules to HM Treasury and to publish them, and to consult before making rules.
	Paragraph 33 of Schedule 17A requires the Bank to make a report to HM Treasury at least once a year, based on the requirements for the PRA’s report under Schedule 1ZB to FSMA 2000.