FCA welcomes EU agreement on Brexit
The UK’s Financial Conduct Authority (FCA) has donned a pair of très chic sunglasses, grabbed a glass of chilled wine, and suavely welcomed the agreement for the implementation period following the UK’s withdrawal from the European Union.
This period is intended to operate from 29 March 2019 until the end of December 2020, during which time EU law would remain applicable in the UK, in accordance with the agreement.
According to the FCA, firms and funds would continue to benefit from passporting between the UK and the European Economic Area (EEA) during the period. Consumer rights and protections derived from EU law would also continue to apply.
For all of us who watch (or suffer) the news about Brexit negotiations, the FCA reminds people that all this is subject to further UK-EU agreements before it is finalised.
In light of the agreement, a Temporary Permission Regime has been unveiled as a backstop. Firms and funds using an EU passport need not apply for authorisation at this stage.
As some background, in December 2017, the UK government announced its plan to legislate for a Temporary Permission Regime if necessary.
This would enable relevant passporting firms and funds to undertake new business that falls within the scope of their existing permissions, enable them to continue performing their contractual rights and obligations, manage existing business and mitigate risks associated with a sudden loss of permission.
The FCA’s expectation is that firms and funds will be solo-regulated and they will need to notify it of their desire to benefit from the regime. The FCA will set out further details on these proposals later in the year.
As you all probably know, the EU (Withdrawal) Bill will repeal the European Communities Act 1972, and convert existing EU law at the point of exit into UK law.