Brexit: City watchdog outlines expectations

The Financial Conduct Authority has today outlined the steps certain firms must take in the event of a no-deal Brexit. It said it was conscious that leaving the EU during the working week "could pose operational challenges for firms". It therefore expects firms to take "reasonable steps" to comply with post-exit MiFID transaction reporting and EMIR trade reporting requirements, adding that it would take a "proportionate and pragmatic" approach to supervising reporting around exit day.

Executive director for international at the FCA, Nausicaa Delfas 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."

In the event of a no-deal exit, passporting will end. The FCA has stated EEA passporting firm wishing to continue operating in the UK will need to notify the FCA by the 30th October of their desire to enter the Temporary Permissions Regime (TPR). Fund managers have until 16th 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," it stated.

Further, firms that are not able to comply fully with MiFID 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 31st October 2019.

On EMIR reporting, FCA-registered trade repositories 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 1st, 2nd and 3rd November 2019, are embedded in their systems. These need to be available for UK authorities by 4th November 2019," it stated.

UK reporting counterparties should ensure details of derivative transactions that are concluded, terminated and/or modified on 30th and 31st 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.

The FCA has set up a dedicated helpline for firms needing help with Brexit preparations. It is 0800 048 4255.

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