The draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2026

The draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2026 have been laid before Parliament, accompanied by a draft explanatory memorandum. The draft Regulations seek to expand the scope of the Financial Market Infrastructure (FMI) Sandbox powers under the Financial Services and Markets Act 2023 by adding a number of further enactments in addition to those already listed under section 17(3). This includes the National Debt Act 1870, the Finance Act 1916, the Insolvency Act 1986, the Companies Act 1989, the Financial Services (Banking Reform) Act 2013 and the Payment Services Regulations 2017.

The changes are intended to support the operation of the Digital Securities Sandbox (DSS), which enables firms to test digital securities infrastructure and distributed ledger technology solutions in a live market environment under a temporarily modified legal and regulatory regime. Participating entities in the DSS are subject to a set of modified legislative requirements, where existing requirements outside of the DSS may act as a barrier or an obstacle to using new technology in the provision of in-scope FMI activities.

The regulations would allow HM Treasury to apply, disapply or modify the effect of the additional enactments through subsequent statutory instruments where required to facilitate the DSS. Any substantive modifications to the relevant legislation will be set out in future statutory instruments.

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