The UK's preparedness for Brexit in financial services: the state of play

The UK's Financial Conduct Authority (FCA)

Speaker: Andrew Bailey, Chief Executive
Event: Bloomberg, London
Delivered: 16 September 2019

Highlights

'There is no doubt that financial sector preparations for no deal Brexit have advanced over the course of this year. However we are not complacent.
There are number of issues that in one form or another require further action, either in the UK or the EU.
We will take a pragmatic approach to issues as they arise. We will use forbearance generously but appropriately, to maintain market integrity and protect consumers and market uses.'

Read the full Speech here.

Meanwhile the UK's Financial Conduct Authority (FCA) is stepping up its efforts to ensure firms are aware of what they need to do to prepare for the potential of a no-deal Brexit. Firms who have not prepared appropriately may risk an impact on their business. 

To help firms prepare, the UK regulator will be running a series of digital adverts signposting to the FCA Brexit webpages, and has set up a dedicated telephone line.  This is the most recent phase of the regulator’s preparations for a no-deal. The FCA is urging all firms to consider the implications of a no-deal exit and finalise their preparations.

This is particularly relevant for firms that:

• are a UK business which does any business in the EEA
• passport into the UK and have not notified the FCA for entry into the Temporary Permissions Regime
• have consumers in the EEA
• transfer personal data from the EEA

Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority, said: 'The FCA has undertaken significant work to prepare for the UK’s departure from the EU. We have published extensive information on our Brexit pages and held events, reaching firms and trade organisations around the country. We expect firms to ensure they are ready if there is a no-deal. If firms haven’t finalised their preparations, there is a risk they could be impacted. Firms should consult the information on our website.'

The FCA, working with the government, has put in place a number of measures to minimise the potential for disruption, for example Temporary Transitional Powers and the Temporary Permissions Regime. 

Brexit will also result in the loss of passporting for UK firms doing business in the EEA. Whether firms need regulatory permissions to continue to do business in an EEA country will depend on the activity they are carrying on, the local law and the approach of the local authorities in that jurisdiction. Firms should make themselves aware of any transitional regimes, with deadlines or registration requirements attached to them, that have been put in place by relevant EU Member States. A list is available on the FCA website, but the FCA would draw particular attention to the Luxembourg transitional regime for existing contracts where firms must register by 15 September 2019.

Firms should also consider any regulatory changes that could apply in the event of no deal. For example, MiFID II transaction reporting will change and firms should be ready to implement this.

In the event of no-deal there will be a number of changes to the FCA Handbook, the Temporary Permissions Regime will come into force, and the FCA will become responsible for Credit Ratings Agencies and Trade Repositories. Firms should take note of these changes in advance. 

See the details of regimes put in place by other EU Member States.
Find out how one can prepare for Brexit.

FSCA press release