The top UK financial market authority has issued a reminder of what needs to be done incase the UK crashes out of the EU without a deal.
The Financial Conduct Authority (FCA) has talked a lot about what would happen in the case of a no-deal Brexit on October 31. In September, the FCA warned that seven matters were still unsolved ahead of a potential Halloween Brexit, which could affect the financial services industry. They included concerns about what the Shared Trading Obligation and the rules about the data exchange between the two blocks would look like after the conscious uncoupling.
Now the FCA has issued an update to the steps businesses need to take in case of a no-deal scenario becomes a reality on Thursday October 31.
It began by acknowledging that crashing out of the EU would cause tremendous strain on businesses. Yet, the UK watchdog advised firms to take steps to prepare to comply with the new post-Brexit requirements to MiFID and EMIR. The FCA stated it would take a “proportionate and pragmatic approach to supervising reporting around exit day.”
The FCA stated that in regards to MiFID transaction reporting that businesses that were unable “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.”
The authority also stated that when it comes to 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.”
It added that FCA-registered trade repositories 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.”
The regulator also reminded businesses that passporting rights would cease on Brexit day, meaning British firms would lose the right to trade in any EEA country. Similarly, EEA-based firms would lose the right to trade in the UK after Brexit. For EEA businesses, the FCA reminded them to notify the FCA that they wanted to enter the Temporary Permissions Regime before Wednesday October 30.
Nausicaa Delfas, executive director for international at the FCA, said, “The FCA has been preparing to ensure UK financial services are well placed if the UK leaves without a deal. Today, we have set out steps certain firms need to take – it is important that firms are as prepared as possible if there is a no-deal exit, and that they are aware of what they need to do.”
The FCA is not the only organisation to have expressed concerns about what will happen to the sector after Brexit. For instance, several UK stakeholders have said they’re worried about what will happen to the British FinTech industry’s position as a European leader after Brexit.
Similarly, in September, bankers said they feared they would be unable to access their biggest market come the Halloween Brexit as many of the law updates in the EU would not have been updated in the UK at the time of the breakup.
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