United Kingdom (and EU regulation)

FCA sets out latest expectations for firms on Brexit

By Simon Lovegrove (UK) on October 14, 2019 Posted in Brexit, United Kingdom

On 11 October 2019, the FCA issued a press release concerning its latest expectations for firms on Brexit.

The FCA reports that it 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 (see further below). The FCA will take a proportionate and pragmatic approach to supervising reporting around exit day in a no-deal scenario.

In terms of a no-deal Brexit scenario, the FCA also makes the following points:

any EEA passporting firm wishing to continue operating in the UK will need to notify the FCA by 30 October 2019 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 that have 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, the FCA will generally expect firms to have a physical presence in the UK to help ensure effective supervision. The FCA will be consulting on its approach shortly;
on MiFID transaction reporting, 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 TRs 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; and
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.