FCA updates no deal Brexit guidance

Brexit

EEA firms passporting into the UK must apply to the temporary permissions regime by 30 October.

The Financial Conduct Authority (FCA) has issued an update regarding the responsibilities of regulated firms under a no deal Brexit.

The regulator reminded firms that passporting will end if the UK leaves the EU without a deal on 31 October.

Any EEA passporting firm that wants to continue operating in the UK must notify the FCA by 30 October that they wish to enter the temporary permissions regime (TPR).

After the UK’s exit, firms using the TPR will be given a ‘landing slot’ by the FCA, during which they must apply for full UK authorisation.

The FCA expects firms granted full UK authorisation to maintain a physical presence in the UK.

A consultation on the FCA’s approach to authorisation will be launched shortly.

Interruption
Due to the Brexit deadline falling on a weekday, the regulator anticipates “operational challenges” for some firms.

The update issued today (11 October) states that firms should take “reasonable steps” to comply with post-exit MiFID transaction reporting and EMIR trade reporting requirements.

Firms unable to comply with MiFID transaction reporting at the time of exit must be able to back-report missing, incomplete or inaccurate transactions as quickly as possible.

The FCA said it would take a “proportionate and pragmatic approach” to supervising firms around exit day.

Transition
Last month, the regulator updated draft directions it had issued under its temporary transitional power (TTP).

The main updates were to:

  • Extend the proposed time-span of directions issued under its TTP from 30 June 2020 to 31 December 2020.
  • Refresh the provisions relating to prudential requirements to reflect new legislation and FCA exit instruments.
  • Cancel certain directions involving payment services provided by EEA credit institutions in the financial service contracts regime.

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