The FCA and regulated firms have been taking steps to prepare in the event the UK leaves the EU on 31 October 2019 without a deal. Today the FCA has issued an update on steps certain firms need to take.
The FCA is aware that leaving the EU during the working week could pose operational challenges for firms. During this time firms should take reasonable steps to be prepared to comply with post-exit MiFID transaction reporting and EMIR trade reporting requirements. The FCA will take a proportionate and pragmatic approach to supervising reporting around exit day.
Alongside this, if the UK leaves the EU without a deal, passporting will end. Any EEA passporting firm wishing to continue operating in the UK will need to notify the FCA by 30 October that they wish to enter the Temporary Permissions Regime (TPR). Fund managers have until 16 October 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, we will generally expect firms to have a physical presence in the UK to help ensure effective supervision. We will be consulting on our approach and expectations shortly.
Nausicaa Delfas, Executive Director for International at the Financial Conduct Authority said:
‘The FCA has been preparing to ensure UK financial services are well placed if the UK leaves without a deal. Today, we have set out steps certain firms need to take – it is important that firms are as prepared as possible if there is a no-deal exit, and that they are aware of what they need to do.’
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 withdrawal from the EU will need to be able to back-report missing, incomplete or inaccurate transactions. This should be competed as soon as possible after 31 October 2019.
On EMIR reporting, FCA-registered trade repositories (TRs) should 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 4 November 2019.
UK reporting counterparties should 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 4 November 2019.
If you need help visit the FCA Brexit pages or call their dedicated telephone line on 0800 048 4255.