The Financial Conduct Authority (FCA) has warned that businesses must be ready for the end of the Brexit transition period in one month’s time.
When this period ends at 11pm on 31 December, financial firms will need to be prepared for several changes to the regulatory environment in which they operate.
Crucially, European Union laws will no longer apply and passporting rights into European countries will end.
To help firms prepare, the FCA has published information on its website setting out the key issues firms need to focus on. It stressed that firms should be aware that:
the FCA is making use of the Temporary Transitional Power to provide them with more time to comply with a large number of the changes;
however, there are also key requirements that firms need to comply with by 1 January 2021; and
firms that intend to carry on providing services currently covered by a passport will need to ensure they will be able to do so after the end of the transition period.
The FCA has set out in detail the considerations to help firms understand if or how they will be affected and what action they may need to take. Its Handbook has also been updated with changes to regulatory requirements that will apply to firms.
The Temporary Permissions Regime will enable relevant firms and funds which passport into the UK to continue operating in the UK, providing that they notify the FCA no later than 30 December.
If a firm currently relies on a passport to provide services to or from the UK, and proposes to cease those services at the end of the transition period, the FCA expects them to ensure the right outcomes for their customers, and provide timely communications to enable them to make appropriate decisions.
Nausicaa Delfas, executive director of international issues at the FCA, said: “With just a month to go until the end of the transition period, firms need to make sure they are prepared for the end of passporting, and for the new financial services landscape after the end of the transition period.
“To help minimise disruption, we have on-shored EU legislation and established temporary regimes to allow non-UK firms and funds to operate in the UK after 31 December.”
