(This note is not part of these Regulations)

These Regulations make provision for transformer vehicles, within the meaning given by section 284A of the Financial Services and Markets Act 2001 (c. 8; section 284A was inserted by section 31 of the Bank of England and Financial Services Act 2016 (c. 14)). They are to be read with the Risk Transformation (Tax) Regulations 2017. Collectively, these Regulations facilitate and regulate the issue of insurance linked securities in the United Kingdom.

Prior to making these Regulations, the Treasury consulted on 1st March 2016 and 23rd November 2016. These consultations explain the background to these regulations, in particular how the issue of insurance linked securities operates. They can be found at:

https://www.gov.uk/government/consultations/insurance-linked-securities-consultation

https://www.gov.uk/government/consultations/regulations-implementing-a-new-regulatory-and-tax-framework-for-insurance-linked-securities

Part 2 of the Regulations makes provision for the authorisation and supervision of transformer vehicles which assume certain risks from insurance or reinsurance companies. A new regulated activity is introduced into the Financial Services and Markets Act 2000 (Regulated Activities) Order 2011 (S.I. 2001/544), which has the effect of bringing transformer vehicles carrying on that activity within the scope of regulation under the Financial Services and Markets Act 2000. An amendment to the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (S.I. 2013/556) means that this activity is a PRA regulated activity for the purposes of the Financial Services and Markets Act 2000.