This week (8 January), the Financial Conduct Authority published two further consultations in preparation for the UK’s exit from the EU.
The consultations cover:
- Proposals to introduce the financial services contracts regime (FSCR), and
- Proposed fees for regulating securitisation repositories.
The FCA’s preparations for Brexit
The Authority says that it continues ‘to plan for a range of outcomes to the Brexit negotiations. One of these outcomes is the UK leaving the EU on 29 March 2019 without an implementation period’.
We’ve looked before at the regulator’s preparation for the 29 March deadline.
Two consultation papers were published by the Authority in October. In November, it launched a further consultation, focused principally on a number of amendments to its Handbook and Binding Technical Standards (BTS).
This regime has been put in place to enable firms to operate for a limited period while they seek full FCA authorisation, if the UK leaves the EU without an implementation period in place.
What do the new proposals cover?
The 8 January proposals are designed to ‘help ensure we have a functioning regulatory framework in place’.
Financial services contracts regime
The FCA has 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 29 March 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. These firms and fund managers will need to enter the temporary permissions regime.
The FCA states that the consultation applies to:
- EEA firms that are passporting into the UK under the Financial Services and Markets Act 2000 (FSMA) and Treaty firms
- EEA electronic money and payment institutions and registered account information service providers passporting into the UK
And might also be of interest to:
- Current and prospective customers of firms that currently passport into the UK
- Advisers of firms that passport into the UK
You can respond, until 29 January 2019, by completing the online form, by emailing HandbookProduction@fca.org.uk or by writing to: Handbook Review Team, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.
The second consultation addresses the regulation of securitisation repositories after the UK leaves the EU on 29 March 2019.
The regulator is consulting on proposals for recovering the costs of regulating securitisation repositories.
The proposals set out the fees structure it intends to establish for securitisation repositories (SRs) when responsibility for their regulation passes to the FCA from ESMA (European Securities and Markets Authority) after the UK leaves the EU.
You can read the full consultation on this here.
The securitisation consultation is open until 11 February 2019 and is relevant to ‘any firms which are considering setting up securitisation repositories. It may also be of interest to trade repositories and credit rating agencies’.
You can respond by completing the online form, you can email your response to firstname.lastname@example.org or you can write to: David Cheesman, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.
Ensure a compliant culture, no matter what changes take place
The wider regulatory landscape for financial services in the UK may be undergoing unprecedented change. But if you build your business around strong ethics, a customer-first approach and good governance, you will be better-placed to withstand any uncertainty.
Our whitepaper, How to embed a compliance culture within your business, has tips on how to achieve this governance-focused ethos. You can download a copy here.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.