Under draft legislation published by the Treasury, the FCA and the PRA are to be given temporary powers to make transitional provisions, in order to ensure that most firms and other regulated entities’ day to day UK regulatory obligations will be as unaffected by Brexit as possible.
However, the FCA has published a statement setting out areas in which they do not believe it is consistent with their statutory objectives to grant transitional relief. Therefore the following types of firms are expected to start to prepare with the changed obligations following Brexit:
- firms subject to the MiFID II transaction reporting regime, and connected persons;
- firms subject to reporting obligations under EMIR;
- EEA Issuers that have securities traded or admitted to trading on UK markets;
- investment firms that are subject to the BRRD and that have liabilities governed by the law of an EEA State;
- firms intending to use credit ratings issued or endorsed by FCA-registered credit ratings agencies after the date of Brexit;
- certain UK originators, sponsors or securitisation special purpose entities;
- EEA firms intending to use the market-making exemption under the Short Selling Regulation.
The FCA will publish more information on post-Brexit compliance in the coming weeks.