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FCA updates on its latest expectations for firms on Brexit

The UK Financial Conduct Authority (FCA) has earlier today outlined its expectations regarding firms’ preparedness for Brexit. The regulator has issued an update on steps certain firms need to take in case the UK leaves the European Union on October 31, 2019 without a deal.

In case of no-deal Brexit, passporting will end. Any EEA passporting firm willing to continue operating in the UK must to notify the FCA by October 30, 2019, that they wish to enter the Temporary Permissions Regime (TPR). Fund managers have until October 16, 2019 to inform the FCA if they want to make changes to their existing notification.

After exit, firms who notified the FCA of their intention to use the TPR will be contacted and provided with a landing slot when they will need to submit their application for full UK authorisation. Upon authorisation, the FCA will generally expect firms to have a physical presence in the UK to help ensure effective supervision.

As previously guided, TPR would allow EEA-based firms 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. This regime will also allow EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK.

Today, the FCA explained that, on MiFID transaction reporting, which is a crucial part of the FCA’s approach to market oversight, firms that are not able to comply fully with the regime at the time of the UK’s exit from the EU will need to be able to back-report missing, incomplete or inaccurate transactions. This has to be competed as soon as possible after October 31, 2019.

Regarding EMIR reporting, FCA-registered trade repositories (TRs) are expected to be ready to receive reports from UK reporting counterparties and be in a position to share these with UK authorities. FCA-registered trade repositories must ensure the migration of outstanding trades and historic EMIR data, and that the details of any trades newly concluded, terminated or modified by UK reporting counterparties on 1, 2, and 3 November 2019, are embedded in their systems. These need to be available for UK authorities by November 4, 2019.

UK reporting counterparties are advised to ensure details of derivative transactions that are concluded, terminated and/or modified on 30 and 31 October 2019 which cannot be reported before the point of exit, are reported to an FCA-registered TR by no later than November 4, 2019.

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