As heralded at the end of last year, the FCA has now published two consultation papers that make provision for operations in the event of a ‘hard’ Brexit next March.
The first consultation sets out changes to the FCA’s Handbook and to those EU Binding Technical Standards, which, it is proposed, would be incorporated directly into UK law under the European Union (Withdrawal) Act 2018.
This consultation proposes amendments that are required to reference the draft SIs published to date as part of the Brexit preparations, and thereby correct ‘deficiencies’ arising from Brexit, rather than making substantive changes. Aside from the specific proposed changes, the consultation will be of interest as it indicates the approach the FCA will take to amending BTS going forward, and how the FCA intends to treat EU non-legislative material, such as Guidelines and Q&A documents.
The second consultation will make provision for the temporary permissions regime (TPR) for incoming EEA firms and funds, intended to facilitate the continuation of business after March 2019. This consultation paper includes proposals relating to the nature and scope of the TPR, how it will operate for firms, and what will be expected from firms, and information for electronic money institutions, payment institutions and registered account information service providers.
Both these consultations come in the wake of Guidance published by HM Treasury, outlining its proposal for a temporary transitional power to be exercised by UK regulators. In particular, HMT notes that it does not expect firms providing UK regulated services to start preparing now, to implement changes that will only be effective from March 2019 if an appropriate transitional agreement is not agreed. It comments that it is therefore proposing to extend and adapt the existing statutory power of the FCA and PRA to waive and modify firms’ regulatory obligations, to enable them to permit relevant firms to adjust to onshoring changes in an orderly way.