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Brexit Implementation Period: Information for Regulated Firms
Brexit Implementation Period: Information for Financial Services Firms
3 February 2020
On Friday at 11pm, 31 January 2020 the UK left the European Union (EU) and entered a period of implementation. This period of implementation is due to last for the remainder of the year until 31 December 2020. During the Implementation Period, EU law will continue to apply and both firms and funds will continue to benefit from passporting between the UK and the European Economic Area (EEA). Both Consumer rights and protections that are derived from EU Law will also continue to remain in place during this period.
As a result, there will be no changes to the reporting obligations for firms, including those for MiFIR transaction reporting, under EMIR and for CRAs, which will continue on in line with existing EU regulatory requirements.
All financial services firms are reminded by the FCA to consider how Brexit will impact upon their business and ensure that, as things develop over the year, that they consider what action they may need to take to be read for 1 January 2021 when the Implementation Period ends to ensure that risks to customers are minimised.
The FCA are aware that one of the areas firms are particularly interested in in relation to Brexit is Passporting.
Passporting is the current system that enables firms authorised in the UK to conduct particular activities in the EEA without requiring local authorisation, and vice versa.
The FCA has announced in a recent video that even if the UK and EU reach an agreement over the coming year, they would still expect the existing passporting system in its current form to end since Passporting was a consequence of the UK being a member of the EU.
Therefore, the FCA has advised firms to “anticipate a range of potential outcomes at the end of the implementation period, including the possibility that the activities that you conduct might not be covered by whatever is agreed between the UK and the EU. “
With regards to the Implementation Period, the Chief Executive of the FCA, Andrew Bailey, said:
“The implementation period gives firms a period of certainty while negotiations are continuing on our future relationship with the EU. The FCA intends to use this time to work with government, the Bank of England, firms and other regulators to ensure the financial services industry is ready for the end of 2020.”
During this time, it is important for Firms to ensure they remain up to date with any developments in relation to Brexit so they can continue to assess what the impact may be on both the Firm and their customers. To assist in these efforts, the regulator has said that it will continue to provide regular updates and more information on material developments on the FCA’s dedicated Brexit webpages that can be found at https://www.fca.org.uk/brexit.
>> Key Diary Date: Brexit Implementation Period Ends 31 December 2020.
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