FCA advises UK firms to make their contingency plans in light of Brexit
Firms should continue to make their contingency plans and think about how their consumers might be affected by the UK leaving the EU, the FCA says.
The latest regulation round-up published earlier today by the Financial Conduct Authority (FCA) includes a notice on Brexit, which should have been expected given the latest developments.
This week, the Government lost a vote on the EU Withdrawal Agreement in Parliament. While the position remains uncertain, the FCA notes that it continues to prepare for all eventualities in relation to Brexit. This includes a no deal scenario, which would see the UK leave without an implementation period.
The regulator adds that the onshoring of its handbook and temporary permissions regime continues to progress. This is set to help to minimise cliff-edge risks that are within the FCA power to address.
The regulator advises firms to continue to make their contingency plans and think about how their consumers might be affected by the UK leaving the EU.
In the meantime, the notification window for the temporary permissions regime opened on 7 January 7, 2019. It is set to close on March 28, 2019. The regime will allow EEA-based firms currently passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation, if the UK leaves the EU on exit day without an implementation period in place. It will also allow EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK.
The FCA has also set out proposals to implement the financial services contracts regime (FSCR) so that EEA firms can fulfil their existing contractual obligations in the UK.
The FSCR allows for the continuity of existing contracts after exit day for EEA firms which either:
- do not enter the temporary permissions regime, or
- exit the regime without full UK authorisation.
The FSCR does not allow EEA firms to take on new business after March 29, 2019. Similarly, EEA-based managers, depositaries and trustees of UK authorised funds cannot continue to manage or provide services to these funds after exit day under FSCR.