Having declined to speak about Brexit to the press, the Financial Conduct Authority (FCA) has published “near-final” rules and guidance that will apply in the event the UK leaves the EU without an implementation period. As most of the changes proposed will be made under powers given to the FCA under the EU (Withdrawal) Act, they are subject to approval by the Treasury.
The documents published today confirm the FCA’s proposals in the event of a no-deal Brexit and bring together feedback from a number of consultation papers.
The papers also provide further details on the treatment of Gibraltar-based firms after Brexit and the temporary transition power. This power would give the FCA the ability to waive or modify changes to regulatory requirements which have been amended under the EU (Withdrawal) Act. The authority intends to use it so firms and other regulated entities do not generally need to prepare now to meet new UK regulatory obligations. In most cases, the FCA plans to allow firms a period of 15 months to adapt to these changes. and have set out the areas where firms need to prepare to comply now on our website.
Nausicaa Delfas, Executive Director of International at the FCA said:
“The FCA has been preparing for a range of scenarios, including the possibility that the UK leaves the EU in March 2019 without an implementation period. The documents published today are a significant milestone in this work: they ensure that there is a functioning regulatory regime from day one, and that firms are clear as to the requirements they need to meet by end March 2019 and beyond, so they can continue to meet the needs of their customers.”
Earlier this week, the FCA published information for regulated firms in different sectors to consider if or how they will be affected by Brexit and what action they may need to take. This includes information specific to the banking sector, UK‑based pensions and retirement income firms, general insurance firms, retail firms, wholesale banks, markets and asset managers operating in the UK.
Whilst the FCA’s regulatory agility can be seen as nothing short of gymnastic, it can also be argued that a lack of concrete guidance in the lead up to Brexit has left UK businesses confused and uncertain, As Peter Smith of FinTechReguLab told us last month,
“The mood music is saying that most businesses lacked the information and clarity they need to navigate their forward course heading in to what could be the biggest change for them in a generation.
There is a very real risk that a lack of clear, actionable information from government will leave firms, their people and their communities in an impossible position.”
One wonders how well-suited these “near-final” guidelines will be for steadying a ship already listing in stormy waters…