On 6 September 2019, the FCA published Consultation Paper 19/27: Quarterly Consultation No 25 (CP19/27).
Chapter 7 of CP19/27 sets out further Brexit-related changes to the FCA Handbook and binding technical standards (BTS) following the extension of the Article 50 process to 31 October 2019.
The FCA states that although the proposed changes are minor or consequential in nature it has chosen to consult in the interests of transparency and to inform stakeholders of the proposed amendments ahead of exit day. The FCA is consulting on Brexit-related changes to:
- FCA Handbook provisions not included in the Brexit instruments contained in the FCA’s earlier Policy Statement (PS19/5) (our earlier blog is here). At para 7.12 of CP19/27 the FCA sets out a table providing a summary of the proposed changes and the FCA Handbook areas affected; and
- BTS that start to apply between 12 April 2019 and 31 October 2019; three BTS under the Capital Requirements Regulation, and one BTS under the Credit Ratings Agencies Regulation where it is appropriate to make further changes so that they are effective at exit day. A further discussion of the changes can be found in paras 7.13 to 7.41 of CP19/27.
At paras 7.42 and 7.43 of CP19/27 the FCA provides an update on the use of the temporary transitional power. The FCA reminds firms that on 25 July 2019 it provided an update on its intention to extend the proposed duration of the directions from 30 June 2020 to 31 December 2020. This date is aligned with the end date intended by the BoE and the PRA. The FCA also states that it will publish more information before exit day on how firms should comply with the transitional rules after exit day. The FCA expects to make transitional directions shortly before exit day. These will be updated to take account of exit instruments made between 29 March 2019 and exit day. Firms will not be expected to make individual applications to benefit from the FCA’s transitional directions.
The consultation period for the proposed changes in chapter 7 of CP19/27 is one month.
In CP19/27 the FCA sets out other non-Brexit related minor changes to the FCA Handbook. These are as follows:
- Chapter 2 – minor amendments to chapter 15 of the Supervision manual related to Alternative Investment Fund Managers Directive forms – consultation period is one month;
- Chapter 3 – amendments to the Collective Investment Schemes (COLL) sourcebook to bring it into line with international standards on clearing and settlement of derivative transactions and to better reflect current market practices. The FCA also proposes to amend the rules in COLL relating to property authorised investment funds – consultation period is two months;
- Chapter 4 – minor FCA Handbook amendments to update references to the UK Corporate Governance Code – consultation period is two months;
- Chapter 5 – changes to Disclosure Guidance and Transparency Rules sourcebook to implement the European Single Electronic Format – consultation period is two months;
- Chapter 6 – changes to implement the amendments made by HM Treasury to domestic legislation to reflect the amendments brought by the European Commission’s Regulatory Fitness and Performance Programme to the European Market Infrastructure Regulation and make firms aware of the FCA’s new powers set out in the amended domestic legislation – consultation period is two months;
- Chapter 8 – no changes to the FCA Handbook are proposed. Instead the FCA is seeking views on whether the Lending Standards Board’s Standards of Lending Practice for business customers meets the regulator’s Codes Recognition Criteria – deadline for responses is two months;
- Chapter 9 – proposed modifications to periodic fees rules for Recognised Overseas Investment Exchanges that are also European Economic Area market operators – consultation period is one month;
- Chapter 10 – changes to regulatory reporting requirements – consultation period is one month;
- Chapter 11 – modification to the FCA’s ‘wake-up’ pack and annuity information prompt rules to reflect its policy intention – consultation period is one month; and
- Chapter 12 – changes to the Training and Competence sourcebook list of appropriate qualifications – consultation period is one month.