Treasury has published a draft statutory instrument setting out the Financial Services Contracts Regime (FSCR) which will provide run-off mechanisms to the various temporary regimes the government and regulators are preparing to put in place for Brexit. The regime will cover firms that currently passport into the UK under FSMA, the PSRs or the EMRs, and services provided by non-UK CCPs and TRs.
The draft will be laid before Parliament before exit, and will not be required as at 29 March 2019 if an implementation period is agreed. It addresses the position of relevant firms that do not, on a hard Brexit, hold the relevant temporary permissions under the various regimes the UK is making available to non-UK firms. Under the instrument, there will be a run-off mechanism that will allow existing contracts to be serviced after exit and thereby mitigate the risk of a residual cliff-edge.
FCA has provided its commentary on a separate page on its website.