FCA updates its handbook for a post-Brexit UK market

October 2, 2020

The Financial Conduct Authority (FCA) has published an updated version of the FCA Handbook to give companies ample time to prepare before the Brexit transition period is over.

The updated handbook also outlines how the regulator will use its Temporary Transitional Power (TTP) during the transition period, warning firms that it expects them to be compliant with the changes by March 31 2022.

The financial industry watchdog said this means firms and other regulated persons do not generally need to prepare now to meet the changes to their UK regulatory obligations brought about by onshoring.

That being said, the FCA expects firms and other regulated persons to be preparing to comply with changed obligations ready for 31 December 2020 in a smattering of key areas.

These include MIFID II transaction reporting, EMIR reporting obligations, SFTR reporting obligations, certain requirements under MAR, issuer rules, contractual recognition of bail-in, Client Assets Sourcebook requirements (CASS), market-making exemption under the Short Selling Regulation, use of credit ratings for regulatory purposes, securitisation, electronic commerce EEA firms, mortgage lending after the transition period against land in the EEA, and payment services obligation such as the strong customer authentication and secure communication rules.

‘We are approaching the end of the transition period, so firms should be completing their final preparations,” said Nausicaa Delfas, executive director of international at the FCA. “To help firms to prepare and provide clarity, we have published a version of our handbook that will apply from the end of this year, which includes the changes made through the onshoring process.

“We have also set out further details on the Temporary Transitional Power. The power will in most cases give firms more time to adapt to their new obligations. There are some areas where it would not be appropriate for us to apply the TTP, including where doing so could run counter to our objectives: in those key areas, we continue to expect firms and other regulated entities to prepare now to comply with the changes to their regulatory obligations by 31 December 2020.”